The incentives could come under the production linked incentive (PLI) scheme that promises billions of dollars to boost manufacturing ranging from electronic products to pharmaceuticals. Earlier this month, government officials reviewed the PLI scheme, launched in 2020, under which government proposed to offer around $24 bn in cash incentives to 14 sectors.
India’s government is likely to announce fiscal incentives for the ailing textile and apparel industry by the end of this year, partly to stave of the impact of a fall in overseas orders, a trade body said.
The incentives could come under the production linked incentive (PLI) scheme that promises billions of dollars to boost manufacturing ranging from electronic products to pharmaceuticals.
“The government could make an announcement by December,” said T. Rajkumar, Chairman of the Confederation of Indian Textile Industry (CITI), referring to industry representatives’ meetings with textile and finance ministry officials earlier this month.
Earlier this month, government officials reviewed the PLI scheme, launched in 2020, under which government proposed to offer around $ 24 billion in cash incentives to 14 sectors.
The $150 bn textile and apparel industry, which employs over 45mn, is facing declining exports as European and U.S. consumers’ cut back on spending amid an inflationary squeeze.
India’s textile and apparel exports fell nearly 14% to $11.25 bn in April-July, the first four months of the current fiscal year to March 31, 2024.
In a submission to the government, the industry has asked for fiscal incentives for smaller manufacturers under the PLI scheme and urged the government to withdraw 11% import duty on certain varieties of cotton, imported from Egypt and the United States, to meet specific orders, Rajkumar said.
Rakesh Mehra, President of Indian Spinners Association, said the industry needed government support and signing of proposed free trade agreements with the EU and Britain to boost exports. Nearly one-third of spinning units have cut production leading to fears of job losses, Mehra said.
“In the election year, the government will surely support the sector that offers jobs to millions to workers,” he said.
