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This budget provides support for technology upgradation, tackling pollution and boosting competitiveness to the Indian textile sector. Key budgetary support schemes presented in the new Indian budget are: 1) continuat..

01 Mar 2013

By Seshadri Ramkumar
India's Finance Minister P Chidambaram has announced new incentives and has continued with existing incentives for the textiles industry in the Union Budget 2013-14  The new measures will come into effect on 1st April. Textile sector fared well in this budget and successful schemes are being continued into the 12th Five Year Plan Period ending on March 31, 2017.

This budget provides support for technology upgradation, tackling pollution and boosting competitiveness to the Indian textile sector. Key budgetary support schemes presented in the new Indian budget are: 1) continuation of the Technology Upgradation Fund (TUF) Scheme; 2) Scheme for Integrated Textile Parks (SITP); 3) reduction in the base custom duty for imported textile machinery and parts from 7.5% to 5.0% and 4) extending optional route for central excise duty for the fibers to finished goods value-chain.

The Southern India Mills Associations’ (SIMA) Chairman Mr. Dinakaran has hailed the budgetary support for the Indian Textile Industry. In a statement, he stated that, with the continuation of successful support schemes such as TUF and SITP, he hopes India’s global share in the textile market will substantially improve. Funds have been also allocated for the National Skill Development Corporation for technical skill upgradation.

Specifically, incentives for the apparel sector to tackle technology weak-links and pollution issues are favorable aspects in the budget. The textile industry is appreciative of the optional route in the central excise duty provided to branded garments and made-ups. Mr. Dinakaran of SIMA has stated that this support will provide a level playing field for the textile value-chain and will make domestic textile industry to be competitive against low wage countries such as Bangladesh.
India employees about 100 million people in various forms related to the textile industry. This number is about 1/3rd of the total population of the United States. Owing to the employment and revenue generation, India has a cabinet level ministry for the textile sector.

(The author is Associate Professor of Nonwovens at Texas Tech University, USA)


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