Apparel Sector To Gain From Union Budget 2021

The highlights include setting up of textile parks, PLI schemes, focus on vocal for local,5 percent customs duty on nylon and withdrawal of exemption of certain leather.
Apparel Sector To Gain From Union Budget 2021

To help apparel sector fight pandemic blues, the Union Budget 2021 has announced various schemes. 

The highlights include setting up of textile parks, PLI schemes, focus on vocal for local, 5 percent customs duty on nylon and withdrawal of exemption of certain leather.

Textile Parks

The government on Monday unveiled a scheme for setting up mega textile parks in the country, as part of the Centre's efforts to position India as a fully integrated, globally competitive manufacturing and exporting hub for the sector. Finance Minister Nirmala Sitharaman made the announcement while presenting the Budget 2021-22 in Parliament.

She informed that 7 mega textile parks will be launched in three years as part of the scheme.

The mega textile parks will have integrated facilities and quick turnaround time for minimizing transportation losses, eyeing big-ticket investments in the sector.

The textile ministry had recently said a scheme and a Mega Integrated Textile Region and Apparel (MITRA) Park, in over 1,000 acres of land with state-of-the-art infrastructure, common utilities and Research and Development (R&D) lab, are under consideration.

So far, 59 textile parks have been sanctioned under the scheme for integrated textile parks, out of which 22 have been completed.

The Indian textile sector is the sixth-largest exporter of textiles and apparels in the world.

"The 2021 budget is encouraging and growth oriented. It supports the achievement of the Aatmanirbhar Bharat vision, and fuels post pandemic recovery. We foresee revival of consumer confidence with the budget impetus on inclusive human capital development, infrastructure development and universal healthcare. Announcement for setting up of 7 textile parks in next 3 years, in addition to the recent PLI scheme for technical textiles and manmade fibers, promises to strengthen the global leadership of Indian Textiles. The budget proves to be a Strong Enabler of Women Empowerment in the country, with the measures announced by Finance Minister that promotes women working in night shifts across all sectors, with adequate safety," states Dipali Goenka, Jt.MD & CEO, Welspun India Limited.

PLI Scheme

The production-linked incentive (PLI) scheme, announced earlier for 10 key sectors including textile and automobiles, would help India become self-reliant, boost manufacturing and enhance exports.

The government had approved the PLI scheme for 10 sectors, taking the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period.

Industry Stalwarts Welcome the Budget

Anuj Mundra, Chairman & MD, Nandani Creation: "With focus on Aatmanirbhar Bharat, announcement of establishment of 7 textile parks by Modi government in Budget 2021 should be welcomed with open arms. It's a big boost for the local textile industry and, this will help India become a world leader in textile sector.

Hon'ble Union Finance Minister Nirmala Sitharaman in her Union Budget 2021 has clearly conveyed a message that this government believes in giving a big shot in the arm of textiles and local manufacturing with special focus on Vocal for Local."

Ishaan Sachdeva, Director, Alberto Torresi: "The Union Budget 2021 has been announced today. The Financial minister made many key changes to improve business standards & also make India self-reliant. As to the textile industry, the industry took a hit due to the pandemic, but tax exemption on the import of leather has been withdrawn, leaving a scope for huge opportunities in the near future. Exporters will now derive incentives out of their products. Special leather will act as a great substitute for the leather for which the companies would have to pay a larger amount. Customs duty hike to make leather expensive. The government has also taken a huge step towards boosting employment, by promising an amount of Rs 1.97 lakh crores to the manufacturing sector in the country. We look forward to the schemes announced by the government being implemented soon."

Dipali Goenka, Jt.MD & CEO, Welspun India Limited: "The 2021 budget is encouraging and growth oriented. It supports the achievement of the Aatmanirbhar Bharat vision, and fuels post pandemic recovery. We foresee revival of consumer confidence with the budget impetus on inclusive human capital development, infrastructure development and universal healthcare. Announcement for setting up of 7 textile parks in next 3 years, in addition to the recent PLI scheme for technical textiles and man made fibers, promises to strengthen the global leadership of Indian textiles. The budget proves to be a strong enabler of women empowerment in the country, with the measures announced by Finance Minister that promotes women working in night shifts across all sectors, with adequate safety."

Harkirat Singh, Managing Director, Aero Club (The Maker of Woodland and Woods): "This year's budget is a strategic move by the Govt to get the economy back on track and thus, have a lot of Atmanirbhar Bharat (Domestic production) as well as consumer-centric initiatives. The government’s move to apply minimum wage to all the categories of workers will benefit and encourage employment across the industry while bridging gender gaps. Another important announcement to boost employment is the commitment of Rs 1.97 lakh crores to the manufacturing sector in India. The government is making conscious efforts to promote domestic production in India. The 10 percent customs duty hike on the leather is in line with its intention to promote local sourcing and might lead to an increase in costs till we manage to find alternate sourcing hubs without compromising our quality standards though we do welcome the intention of being self-reliant. We are eagerly awaiting the detailing of the new customs duty structure aiming to promote domestic manufacturing facility which will throw more light on the plan of action/ implementation."
 

Saurav Gupta, CEO, Bella Casa: "We are very happy with the announcements made in the Budget today, and especially for our sector. It allocates more funds to MSMEs, helps in bolstering of the textile supply chain and further is ensuring more money in hands of the consumers. Big-spending by the government is a big plus for us as such spending leads to a trickle-down effect in the form of enhanced incomes for citizens and thus better spending. This is a perfect mix for enhancing consumption and supporting it with a robust supply chain."
 

Neeraj Bansal, COO- India Global and Leader – Supply Chain Re-alignment, KPMG: "The development of seven mega textile parks over the next three years should help the Indian textile and apparel sector become globally competitive, lead to more investments and thereby create employment opportunities. This announcement in addition to the Rs 10,683 crore earmarked under Production Linked Incentive scheme is expected to reduce the higher transaction costs and transportation losses associated with textile exports, which have been eroding its competitiveness over time. 
 

The reduction of basic custom duty (BCD) on steel and copper is expected to address the concerns of the automobile industry by bringing down the overall manufacturing costs, thus spurring consumer demand. While on the other hand an increase in custom duty on import of select components is likely to provide impetus to the government’s PLI schemes, promote domestic manufacturing and make India an integral part of global supply chain. Overall, today’s announcements on custom duty rationalization are expected to support the vision of ‘Atmanirbhar Bharat’."

 

Publish Date
Not Sponsored
Live: People Reading Now
RECOMMENDED FOR YOU
TRENDING ARTICLE