Arvind Mills _akash

7/29/2019 Arvind Mills _akash

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Budget 2012-13 Implications on

Textile Industry

The implications of the Budget on the TextileIndustry are mixed.

The industry will have higher input tax burden

on account of increase in Excise Duty & ServiceTax by 2 %.

Reduction in basic Customs Duty from 5 % to

Zero % on new Automatic Shuttle-less Loomsand select processing machines wouldsubstantially reduce the capital cost formodernization and enhancing capacity


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Rationalizing and increasing the abatement ratefor branded garments from 55 % to 70 % willresult in reduction in the effective rate of exciseduty from 4.5 % to 3.6 %.

The weighted reduction of 200 % to 150 %

respectively for spends on R&D and SkillDevelopment initiatives would trigger andincentivize investment and efforts in thisdirection. The industry is facing acute shortage of

manpower and this impetus would encourageactive and enhanced participation of industry inskill development initiatives


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Future Prospects for Textile Industry in

India

The textile industry in India is one of the hopefuldivisions of Indian market. It supplies more thanthirteen percent to trade production, 16.63

percent to export revenues and four percent tothe nations GDP.

In the forth coming year, the industry is to makeapproximately twelve million career

opportunities with a venture of US dollar sixbillion in the field of textile tools and structure,and garment manufacturing by the end of 2015.


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The government of India has also agreed to

the proposals to support the textile industry

by approving hundred percent Foreign Direct

Investment in the market.

Union ministry of Textiles certified Apparel

Export Promotion Council (AEPC) has taken

the reliability to motivate the overseasfinanciers to invest in Indian Textile industry.


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More policy measures are required to revive liquidity and

growth in the backdrop of a challenging operating

environment since 2008.

To boost investments in the spinning segment, the Gujarat

Government in September 2012 came up with The Gujarat

Textile Policy (GTP) targeting installation of 2.5 mn spindles

worth Rs 70 bn over the next five years.

RBI also extended the 2% interest subvention for exporters till

2014, which will aid liquidity.


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An additional 2% incentive is provided by the governmentfor entities registering higher growth in exports.

Other measures in the pipeline include talks with Europefor zero import duty on Indian imports which could providea level playing field with countries such as Bangladesh inthe long run.

The government has allocated Rs 115.7 bn for the TUFSscheme in the Twelfth Five Year Planperiod (2012-2017). This is likely to encourage investmentsin the sector, especially in the areas of modernisation,spinning and processing capabilities as well as for enteringnew markets/products.

Indian textile sector to see a gradual revival in 2013

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Arvind Mills _akash