The apparel sector is pleased with the overall budget proposals which have seen positive response from the industrial sector. Finance minister Arun Jaitley has allocated 3,350 crores for the textile industry. Apparel sector’s long requisition was also addressed in this year’s budget, with a reduction on basic customs duty made from a total of 5 per cent to 2.5 per cent.

Ashok G Rajani, Chairman, Apparel Export Promotion Council (AEPC) said, “Total additional exports of Rs 7,500 crore in 2016-17 are envisaged by the incentives announced in this budget. In the year 2016-17, fabrics worth around Rs 1,000 crore would be eligible for imports and custom duty of Rs 110 crore would be saved by garment exporters. This will give avenues for new product development. It would provide additional exports of Rs 2,500 crore in a complete year. Besides, the continuation of duty free import of trimmings and embellishments to the extent of 5 per cent of FOB would give additional garment export of Rs 5,000 crore in 2016-17,” he said.

Focus on skill development and training, will greatly benefit the apparel industry. “Skill requirement in one sector itself is so diverse as in the case of ‘Textile-Apparel Value Chain’. Textile-Apparel is the largest employment provider after agriculture. In this sector, there is need for several multi-skilling centres.

However, the increase in service tax from 14.5 to 15 per cent will adversely affect the growth of apparel sector. Moreover, two per cent excise duty on branded readymade garments and textiles with sale price of more than Rs. 1,000 is a cause of worry for the apparel industry. The Budget has also proposed that 60 per cent of retail sale price or the tariff value be made eligible for excise or countervailing duty (CVD) on readymade garments and made-up textile articles. Previously, the tariff value for calculating excise or CVD was fixed at 30 per cent of retail sale price.