Textile businesses seek assistance in sluggish market

By

Isabelle Crossley

Published
Aug 16, 2019

The Confederation of Indian Textile Industry has asked the central government for assistance in the form of tax incentives as the textile sector sees decreasing exports and domestic demand. 

CITI has asked the government to extend its tax incentive scheme to the entire textile industry to combat a sluggish market, ET Bureau reported. The organisation has also requested that the government transfer its subsidies directly to farmers’ bank accounts instead of offering them a minimum support price for their goods. 

“Textile and clothing segments are presently going through a deep crisis due to uncompetitive fibre prices, declining exports, incompetitiveness of our products in international markets, embedded taxes not getting refunded, and lack of working capital, among others,” said CITI’s chairman Sanjay Jain.

Exports of cotton yarn are also suffering, said Jain. The fibre saw a 33% dip in exports during the first quarter of the current financial year which ended in June with exports at 226 million kilograms compared to 338 million kilograms during the same time period a year ago. Domestic demand for the textile has also fallen by between 10% and 15%.

CITI hopes for increased market incentives but also warns against promoting new spinning mills. Jain said that the government should refrain from incentivising new spinning mills for three years to make sure that existing mills do not turn idle. Jain said that the focus should be on keeping operational mills going, especially that many spinning mills across India have cut prediction by between 15% and 50% due to reduced textile demand.