The opening up of the world economy including markets, malls, travel has helped the textile industry recover from the COVID lockdown and restrictions.
Anti-China sentiment has helped Indian textile manufacturers and exporters to gain a major share in the global textile business.
The textile industry feels that this is an opportune time for the Center to provide appropriate support to the industry to boost its next phase of growth.
Hence the budget 2022 and the expectations of the textile industry from the government are as follows:-
Roll back GST:-
The government increased the GST on textiles from 5% to 12%, despite concerns expressed by the industry.
The new GST rates will be applicable from January 1, 2022. This will have a negative impact on the growth of the textile industry which contributes a great deal to employment generation and export earnings. It is requested to keep the GST rates at 5% only.
Stabilize Cotton Prices:-
Cotton is the major raw material (60%) and cotton prices have been skyrocketing since last 11 seasons.
We request the government to stabilize cotton prices. Government may set up a Cotton Price Stabilization Fund scheme which includes 5% interest subvention or loan at NABARD interest rate, reducing margin money from 25% to 10% and increasing working capital limit of cotton from 3 months to 9 months.
Simplify CAROTAR 2020:-
Exporters are facing difficulty in clearance of import goods from FTA countries in view of Customs Administration’s implementation of Rules of Origin under Trade Agreements (CAROTAR), 2020. The government should simplify the clearance of imported goods from FTA countries. ,
Incentivise Renewable Energy:-
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The textile industry is a major consumer of electricity. To encourage the use of renewable energy, the government should encourage investment in green energy and eco-friendly technologies by giving tax benefits to manufacturers.