A trade group said on Wednesday that the Indian government is expected to propose fiscal incentives for the struggling textile and garment sector before the end of this year, in part to mitigate the effects of a decline in international orders.
The incentives may fall under the production linked incentive (PLI) programme, which offers billions of dollars to increase manufacture of everything from pharmaceuticals to technological goods.
“The government could make an announcement by December,” averred T. Rajkumar, chairman of the Confederation of Indian Textile Industry (CITI).
Earlier this month, government representatives examined the PLI programme, which was introduced in 2020 and under which the government promised to provide 14 industries with monetary incentives totaling around $24 billion.
Over 45 million people are employed in the $150 billion textile and garment business, which is experiencing diminishing exports as European and American customers cut down on spending due to the inflationary pinch.
India’s exports of textiles and clothing decreased by about 14% to $11.25 billion in April through July of the current fiscal year, which runs through March 31, 2024.
The industry requested tax breaks for smaller producers under the PLI programme and sought the government to remove the 11% import charge on particular cotton kinds imported from Egypt and the United States in order to fill specific contracts. said Rajkumar.
In order to increase exports, the sector need government backing and the signing of prospective free trade agreements with the EU and Britain, according to Rakesh Mehra, president of the Indian Spinners Association.
According to Mehra, about one-third of spinning machines have reduced production, raising concerns about job losses.
“In the election year, the government will surely support the sector that offers jobs to millions to workers,” he added.
