The country’s textile and clothing export target is set to $45 bn for the current fiscal, lower than the initial target of $48.5 bn set for the previous fiscal who was missed by a huge margin. Nevertheless the target for 2017-18 represents a 17 per cent rise from the actual level of $38.6 bn in 2016-17, according to provisional official estimates. During 2015-16, the overall exports of textiles and clothing stood at $40 bn, primarily due to less demand from major markets such as the US, EU and China, and stiff competition from countries like Vietnam and Bangladesh, which enjoy an edge over India.

The exports were way off the target in the last fiscal, as demand from China — especially for cotton and yarn — was tepid and recovery in the developed markets like the US and the EU still remained fragile. Demonetisation, too, hit the labour-intensive sector, albeit temporarily, as many workers are paid in cash daily or weekly. Stiff competition from countries like Vietnam, Bangladesh and Pakistan— with zero-duty access to some of the key markets— added to the woes of Indian exporters. Bangladesh, for instance, exports products at zero duty to the US and the EU, which together account for around 65 per cent of Indian supplies.

For its part, the Textile Ministry has sought a quick resolution of the India-EU free trade agreement, which would pave the way for duty-free access of Indian textile and garment items to the EU, which account for more than a third of the country’s garment exports, official sources said. The Union Textiles Minister, Smriti Irani has said that after a `6,000 cr package for the garment sector in Jun 2016, her Ministry is planning to unveil a special package for the knitwear industry, which is grappling with enormous financial stress due to lack of automation leading to much lower productivity than countries like China. She also said that road shows have been held in six countries including the UK, US, China, Russia, South Korea and UAE to attract the industry and potential investors for the three day textiles India event which will be inaugurated by Prime Minister Narendra Modi in Gandhinagar on June 30.

There was no announcement of any time frame for the announcement of the proposed National Textiles Policy. The government has provided Rs. 1,900 cr so far for a new duty drawback scheme that was announced as part of a special package for the garments industry in June last year (after the 2016-17 Budget was presented). For the current fiscal, the government has Budgeted Rs. 1,555 cr for the remission of State levies (RoSL) to the garments industry under the duty drawback scheme.

The government in June last year approved the special package for the garments sector, aiming to create 1 cr new jobs, additional investments of Rs. 74,000 cr and extra exports of $30 bn in three years. Over 4 lakh workers have registered themselves for provident fund, under the Pradhan Mantri Paridhan Rozgar Protsahan Yojana (PMPRPY).