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Shujaul Rehman, CEO, Garware Technical Fibres Limited told Fibre2Fashion, “Upcoming Budget is going to be of great significance, especially after visible global economic headwinds pointing towards some Western countries facing recession-like situation and China witnessing a slowdown due to re-surge in COVID-19 cases.” He said that the finance minister should provide more incentives for manufacturing sector, which will help India to grow its exports base. “Such incentives would also positively impact the technical textiles sector, thereby furthering the original objectives of the ‘Make in India’ scheme. We also hope that some recommendations in this Budget will encourage companies to take more initiatives on innovation, research and development (R&D).”
The fabric segment of India’s textile sector is seeking incentives and support from Budget 2023-24, to be presented by finance minister Nirmala Sitharaman on February 1. The segment is expecting that the minister will announce supportive schemes for technical innovation. It wants incentives for R&D in traceability and sustainability of fabrics.
Vinay Thadani, CEO, Vishal Fabrics Limited commented, “If the Incentivisation Scheme for Producers and Exporters is efficiently introduced and implemented, it will tremendously boost confidence among our biggest buyers – UK, US and EU, to choose us. These markets focus on traceability and sustainability of fabrics. It calls for more investments in the R&D for technological innovations. Upgradation of technology would also lead to much-needed development in infrastructure.”
Thadani said that the biggest pain point for the textile industry was costlier cotton. Indian cotton is costlier than the global market. If the industry imports the raw material from international market, it becomes dearer due to 11 per cent import duty. So, the government needs to relook on the present price dynamics of raw material. It can also consider implementation of Cotton Price Stabilisation Fund Scheme for stabilising domestic cotton prices. Such a step will not only boost exports but also result into around three per cent additional industry growth. Lastly, we need region specific textile hubs, especially of mid and small size, to optimise craftsmanship, skillset, resources and marketing efforts. This will not only promote traditional techniques but will also serve as a benefactor to some of the less developed districts of India. During and post COVID-19 pandemic, the textiles and apparel industry had shown tremendous resilience by spinning a turnaround with innovation despite supply chain disruptions. However, the sector is facing headwind in current macro-economic scenario.
Giving his view on Budget expectations, Aditya Goyal, Managing Director of Anubha Industries said, “Fabric segment needs not only incentives for R&D but also soft loan for capex which is needed for technical upgradation. The industry should get easy loan with at least two years gestation period.” He said that costly raw material and other overheads have increased production cost exorbitantly. But the segment could not pass on additional cost due to slower demand from the garment industry. He also emphasised that the fabric segment in the country is more fragmented, so it gets squeezed between spinning and garment industry. Fabric producers get right prices only when market condition remains in shape, but current challenges cause lot of problems for the segment.
Himanshu Thakural, Managing Director of Lion Fabrics Private Limited said, “The government should focus on two issues—the inverted GST structure and raw material security for fabric segment. Fabric producers face difficulty due to higher tax rates of raw materials like polyester yarn and chemicals and lower tax on fabric. Their cash flow gets affected due to 3–4-month delay in refund of Input Tax Credit (ITC).” He said that volatility in cotton prices is also detrimental for industry growth. Currently, Indian players are facing difficulty while competing with global players. The finance minister should remove import duty on cotton. The government should also take initiatives for stabilisation of cotton prices, he said.
Fibre2Fashion News Desk (KUL)
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