Potentially, these incentives might fall within the scope of the production-linked incentive (PLI) framework, which holds the pledge of injecting billions of dollars to invigorate manufacturing across various domains including electronics and pharmaceuticals.
According to statements made by a trade association on Wednesday, the Indian government is expected to unveil fiscal stimulus for the struggling textile and apparel sector, possibly before the conclusion of this year. This move is aimed at mitigating the repercussions of a decline in international orders.
The potential rewards might fall within the purview of the production-linked incentive (PLI) program, which holds the commitment of providing substantial financial support to enhance manufacturing across a spectrum encompassing electronic goods to pharmaceuticals.
"The government might unveil a declaration by December," stated T. Rajkumar, who serves as the chairman of the Confederation of Indian Textile Industry (CITI). He made this comment in reference to discussions held earlier this month between industry delegates and officials from the textile and finance ministries.
In the beginning of this month, governmental authorities assessed the PLI initiative, initiated in 2020, which entails the government's proposition to provide approximately $24 billion in monetary incentives across 14 sectors.
With a workforce of over 45 million, the textile and apparel sector, valued at $150 billion, is currently confronted with dwindling exports. This decline can be attributed to reduced consumer expenditure in Europe and the U.S., caused by the strain of inflation.
From April to July, which corresponds to the initial four months of the ongoing fiscal year ending on March 31, 2024, India's exports of textiles and apparel encountered a notable decline of nearly 14%, amounting to $11.25 billion.
In correspondence addressed to the government, the sector has made a plea for fiscal incentives tailored to benefit smaller manufacturers within the framework of the PLI scheme. Additionally, they have advocated for the elimination of the 11% import duty on specific categories of cotton, which is sourced from Egypt and the United States. This exemption is sought to facilitate the fulfillment of particular orders, according to Rajkumar's statement.
Rakesh Mehra, serving as the president of the Indian Spinners Association, emphasized the industry's requirement for government backing. He also highlighted the importance of finalizing proposed free trade agreements with the European Union and Britain in order to amplify exports.
Mehra further pointed out that nearly one-third of spinning units have already curtailed their production levels, raising concerns about potential job losses.
"In the year of elections, it is highly likely that the government will extend its support to the sector, which provides employment to millions of workers," he expressed.
