The textile industry, which is among the hardest-hit sectors due to coronavirus, has urged the government to implement a uniform GST for apparel and to abolish anti-dumping duties on viscose staple fibre (VSF) in the upcoming budget.
A joint committee of textile industry bodies has asked for government's intervention in removing anti-dumping duty on VSF to address its spun yarn availability and price issues. Viscose staple fibre is a key input in the manmade fibre sector.
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The National Committee on Textiles & Clothing (NCTC) comprising of different players in the VSF value chain said the textile industry has been facing stagnation for many years mainly due to the lack of availability of the basic raw materials of man-made fibre and filament yarn at internationally competitive prices. The committee said if the issue of VSF is not addressed urgently then it may lead to job losses.
The textile ministry has also hoped that the finance minister will address the problem of higher duties on inputs. Additionally, the textile ministry has proposed to develop seven Mega Integrated Textile Region and Apparel (MITRA) parks to double the industry size to $300 billion by 2025-26.
Finance Minister Nirmala Sitharaman will present the Budget for 2021-22 on February 1.
It is expected that Sitharaman will unveil a mega scheme to set up textile parks in order to strengthen domestic manufacturing and the 'Atma Nirbhar Bharat' drive.
Further, the textile industry demanded a uniform GST structure as taxes on inputs are higher than that on output, and blocking working capital. At present, man-made fibre is taxed at 18 per cent, spun yarn and filament yarn at 12 per cent and final output, including garments, at 5 per cent.
India is the second-largest manufacturer and exporter in the world, after China. The share of textile and clothing in India's total exports stands at 12 per cent (2018-19). India has a share of 5 per cent of the global trade in textiles and apparel, according to government data.
The textile industry contributes to seven per cent of industrial output in value terms, two per cent of India's GDP and to 12 per cent of the country's export earnings. The textile industry is one of the largest sources of employment generation in the country with over 4.5 crore people employed directly, and another six-crore people in allied sectors, including a large number of women and a rural population.