Over the past year, the most significant transformation that took place in our country was demonetisation. It impacted the industry as a whole which has further tempered the economic growth. Moving forward with the current state of the economy and cash crunch, we are aiming at adopting a holistic cashless model. This move has definitely whetted the interest of the citizens of the country as to what the upcoming budget has in store for them this financial year.
The textile industry has definitely been impacted in the last quarter by the decision of the government. This industry, second only after agriculture, in providing employment to more than 100 million people directly and indirectly out of which mostly are uneducated and work on a daily wage basis. Contributing to more than 11% of the total exports in the country, the textile industry is estimated to reach US$ 223 billion in the year 2021. The textile industry also contributes to 5% of India’s GDP and is expected to contribute even more in the near future.
The 2016 budget did address a few gaps of the textile industry through revision of taxation, infrastructure improvement and relaxation of relevant policies directly affecting the industry. The budget also saw the import duty elastane printed fabrics, cotton & metallic yarn dyed blended fabrics, cotton & spandex, metallic blended fabrics, cotton & silk lining fabric reduced to zero provided these articles are imported to manufacture garments for exports
With the aim to attract investments of $11 billion and generate $30 billion in exports, a Rs 6,006-crore special package for textiles and apparel sector was rolled out in June, which was expected to create one crore new jobs in three years. Recently, the government approved reforms in the apparel made-ups sector, aimed at creating large scale direct and indirect employment of up to 11 lakh persons over the next three years and boosting exports.
To sustain the growth trajectory of the booming textile industry, the budget should focus upon better infrastructure, education and skill-set training; along with a further relaxation of laws to give a boost to the textile industry.The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption and demands from export. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. This industry will continue to explode, and a favorable budget will give the industry an extra push!
This article has been contributed by Lubeina Shahpurwala, Partner, Mustang Socks