A Continuous Growth in Textile Business Exports: An Estimation by DGCI&S

Textile business in India is currently one of the largest employers in the country employing about 10 crore people, either directly or indirectly. Being a major contributor to India’s economy, textile exports stood at USD 39.2 billion in FY 2017-18, with the sector contributing to 15 percent of India’s exports earning in 2017-18. Exports Buoyant As per figures released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), there has been a 14% year-on-year growth in exports of textile and apparels which touched Rs. 18,965 crore in November 2018. The Chairman of the Confederation of Indian Textile Industries (CITI) believes that clothing and textile industry is on the verge of a turnaround and it has put it worst times behind. Experts believe that favourable Government policies have played a key role in turning the fortunes of the industry. Some of the vital policies that have bolstered textile business are: 1- Introduction of Scheme for Capacity Building in Textile Sector (SCBTS) covering the entire value chain of the sector to reduce skill gaps and provide value-added employment opportunities with an outlay of Rs. 1300 crore 2- Raising in customs duty on imported textile items It must be noted that in August 2018, import duty on as many as 328 textile items, including jackets, suits and carpets, were raised to 20% to boost domestic manufacturing. Textile exports also benefited from the US-China trade war which diverted orders from China to India. Also, the depreciation of rupee against the US dollar boosted exports. Challenges to Address To sustain this growth momentum, there are some challenges which the industry needs to address. As textile manufacturing is one of the best manufacturing business in India, industry players feel that Indian textile manufacturers need to offer product varieties and step up manufacturing capabilities to cater to the rising demand for quality textile and products. Textile manufacturers must look forward to value addition capabilities into operations to keep competitors like Bangladesh bay and catch up on products once considered exclusive to India. At the same time, absence of input tax credit on domestic sales of synthetic fibres needs to be worked out as the same is blocking working capital for the industry. Experts have also complained about the inverted tax structure of synthetic textiles, which is boosting imports. As of now, synthetic textile attracts a tax of 18% and yarn 12% while the final output is taxed at just 5%. It is believed that the inverted duty structure has made imports of synthetic textile cheaper by 15-20%. The Way Forward Industry insiders believe that it is time to focus on volume orders as they will be able to garner greater profits through them in the long run. Also, there should be renewed focus on product diversification and customer addition to support volume sales. To scale up operations and manufacturing capabilities, textile manufacturers can avail tailor-made Business Loans of up to Rs. 30 lakh. The collateral-free loan comes with a Flexi Loan Facility that allows one to withdraw funds as and when required from the approved limit with interest being charged only on the amount borrowed.