New Delhi . After agriculture, the textile sector, which directly employs 4.5 crore people in the country, has been facing many challenges at both domestic and export levels for the last few years. The government wants to take the textile industry's business to $350 billion by 2030, including domestic and export, and to achieve this goal, textile entrepreneurs want cheap availability of raw material, incentives to increase production, changes in payment rules, subsidy in freight rates, control on imports from Bangladesh, green energy fund and loans at cheap rates.

Only then will the contribution of the textile sector to GDP increase

Entrepreneurs of the textile sector, which currently has a turnover of $170 billion, say that only by meeting these demands, the contribution of the textile sector of two percent in GDP can be doubled by the year 2030. While global textile exports increased by 3.4 percent between 2018-22, India's textile exports increased by only one percent due to the Corona epidemic and geopolitical reasons. In the last financial year 2023-24, the export of all types of garments declined by 10.25 percent compared to the previous financial year, while manmade yarn and fabric declined by 5.46 percent. Only cotton yarn and fabric exports increased by 6.71 percent.

There is no duty on items coming from Bangladesh

Countries like Bangladesh and Vietnam have seen a significant increase in their exports as their cost is lower than India. Bangladesh is included in the category of extremely backward country, therefore there is no duty on its items in the global market and since Vietnam has free trade agreements with many countries, there is no duty on Vietnam's garments in those countries.

The duty on import of cotton should be abolished

Confederation of Textile Industry (CITI) has requested the Finance Minister to remove the five percent duty on import of all types of cotton including organic and other special varieties. Due to import duty, they get cotton 15-20 percent more expensive in the domestic market. Yarn is made from cotton and then fabric and then garments. According to Rakesh Mehra, Chairman of CITI, if cotton becomes cheaper, their cost will reduce and they will be able to compete easily in the global market. They have demanded the government to abolish the 10 percent duty on import of cotton waste used in handloom. However, if the import duty on cotton is reduced or abolished, its import will start on a large scale in the domestic market and cotton farmers may be affected by this.

There should be a change in the payment rules within 45 days

The textile sector includes all segments from cotton to yarn, fabric and garments and among these, entrepreneurs from yarn to garments want a change in the rule of payment for purchases within 45 days in this year's budget. In the last financial year 2023-24, the government implemented section 43B (H) of the Income Tax Act, under which if payment is not made within 45 days on purchases from micro and small enterprises, then that amount will be added to the buyer's income and that amount will be considered taxable. Now micro and small entrepreneurs associated with the textile sector want the payment period to be 90 days instead of 45 days. Entrepreneurs make many purchases from each other ranging from raw materials, so this rule applies to them as well. They say that there is a complete chain of textile (yarn, fabric, garment) and it is not easy to make payment in 45 days.

Demand to curb imports from Bangladesh

Garment and hosiery exporters are demanding freight subsidy from the government so that the cost of export from textile hub cities like Jalandhar, which are far from the port, can be reduced. Domestic garment manufacturers are demanding the government to curb imports from Bangladesh, because clothes are coming to India from there at cheap prices. Due to being included in the list of extremely backward countries, the government cannot impose duty on garment imports from Bangladesh. China is also taking advantage of this, because Chinese companies have set up factories in Bangladesh and the goods of Chinese companies are coming to India via Bangladesh. Now the government is considering that only garments made from Indian fabric in Bangladesh can be brought to India without duty. To stop the import of textile items with poor quality weaving, entrepreneurs have demanded to fix a minimum import duty.

Demand to create green fund from the government

The textile sector has demanded the government to create a green fund so that they can take loans at low rates from this fund for the use of green energy in manufacturing. In future, there will be more demand for products made from green energy in Europe and other developed countries. The textile sector demands that all types of new investments for manufacturing should be given the benefit of Production Linked Incentive (PLI), because to avail the benefit of PLI scheme, they need an investment of more than Rs 100 crore and most of the entrepreneurs in the textile sector are micro and small.

Request for uniform GST rate on the entire value chain of textiles

The Apparel Export Promotion Council has requested for uniform GST rates on the entire value chain of textiles. Currently, there is 5% GST on fibre, yarn and fabric made from cotton, while there is 18, 12 and 5% GST on man-made fibre and yarn respectively. Due to this, they face difficulty in taking input tax credit and their working capital gets blocked. A decision on this can be taken only in the GST Council, but the Finance Minister can give an assurance to consider their demand in the budget.