The textile industry has pitched for incentives such as halving excise duty on man-made fibre and filament and changes in labour laws in the budget for next financial year. It has demanded better access to major markets like the US and EU via trade pacts to help realise its untapped potential.
The sector, which is the country’s second largest employer after agriculture, contributes nearly 14 per cent to industrial production and 4 per cent to the GDP. “The textile sector can provide jobs to unskilled labourers and women as well, even in rural areas, if we get government’s support in the form of higher market access, changes in labour laws and opportunities to scale up,” Confederation of Indian Textile Industry (CITI) secretary general, Binoy Job said.
Lowering the excise duty from 12 per cent to 6 per cent would certainly reduce the tax burden on MMF reducing its cost to the weaver, CITI said in its pre-budget memorandum. In India cotton consumption dominates with 65 per cent and Man-made Fibre and Filament (MMF) at 35 per cent.
“The main reasons for lower consumption of MMF in India is higher cost which could be as a result of manufacturing cost, excise duty and oligopolistic market situation. “The need for reduction in excise duty is established and therefore it should be given serious consideration,” CITI said. The union budget for 2016-17 will be presented on February 29.
“We don’t have much access to major markets like the US and European Union. To address this issue, government should conclude free trade agreement with EU at the earliest and put in place a similar arrangement with US.”
“Government should bring substantial changes in labour laws and make them more flexible. It will give us an opportunity to scale up,” Job added.
