Union Budget 2021: Textile industry welcomes Union Budget; urges withdrawal of 10% cotton import duty

The associations appealed to the Prime Minister to immediately withdraw the levy of 10% import duty on cotton and cotton waste to sustain the global competition, prevent job losses and fall in the exports and also curb cheaper imports of value-added products.

textile industry reaction to Union Budget 2021
This year’s Budget allocates Rs 700 crore for Amended Technology Upgradation Scheme (ATUFs) against Rs 545 crore in the last one.

The textiles and clothing industry has urged the government to withdraw 10% import duty on cotton and cotton waste as that will help Indian textiles and apparel industry sustain the global competition.

The industry welcomed setting up of seven mega textiles parks under MITRA, and duty reduction on nylon raw materials. However, the levy of 10% import duty on cotton saw mixed reactions. The grant to the textiles and clothing sector in Union Budget 2021-22 is Rs 3,614.64 crore, about 10% higher than the revised Budget amount of Rs 3,300 crore in 2020-21. The Budget also puts emphasis on infrastructure development and research & capacity building as the grant for these sectors has been increased by about 43.7% and 77.5%, respectively, compared to last year.

This year’s Budget allocates Rs 700 crore for Amended Technology Upgradation Scheme (ATUFs) against Rs 545 crore in the last one, which will help clear the pending capital subsidy. It earmarks Rs 30 crore for Export Promotion Studies against Rs 5 crore in the last Budget, and Rs 100 crore for Integrated Scheme for Skill Development. “With the active support and cooperation of the government, the textile industry will become globally competitive, attract large investments and boost employment generation and exports in the years ahead,” the Northern India Textile Mills’ Association (NITMA) president Sanjay Garg said. “Basic customs duty (BCD) rates on caprolactam, nylon chips and nylon fibre and yarn will be uniformly reduced to 5% to spur textile industry, MSMEs, and exports,” he said.

“The Production Linked Incentive (PLI) scheme for man-made fibres and technical textiles with a total outlay of Rs10,683 crore will help the textile industry become globally competitive, attract large investments and boost employment generation. Moreover, to achieve the target of $350 billion from the current size of $167 billion, our manufacturing sector has to grow in double digits on a sustained basis. Our manufacturing companies need to become an integral part of global supply chains, possess core competence and cutting-edge technology,” CITI chairman Rajkumar said. He added that the reduction in customs duty on caprolactam, nylon chips and nylon fibre and yarn to 5 % is a step in the right direction, as it will bring nylon chain on a par with polyester and other man-made fibres.

The associations appealed to the Prime Minister to immediately withdraw the levy of 10% import duty on cotton and cotton waste to sustain the global competition, prevent job losses and fall in the exports and also curb cheaper imports of value-added products from the SAFTA countries like Bangladesh, Sri Lanka, etc.

On the MITRA scheme, Chandran said Tamil Nadu, being the largest textile manufacturing state, is planning to develop three mega parks under the scheme, as Andhra Pradesh and Telangana are already having one such park each. “This would facilitate attracting large scale investments, including FDI and JVs,” he said.

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