India’s textile sector expects cotton import duty removal

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January 20, 2023 India’s textile industry expects changes in the duty structure to avoid an inverted duty structure and a reduction or removal of import duty on cotton imposed in February 2021, according to a survey by Care Ratings on the industry’s expectations from the next union budget. It also expects effective implementation of various inventive schemes.
Revision in the production-linked incentive (PLI) scheme to increase the scope of product coverage, a revision in the PLI threshold and an extension of the scheme to cover additional applications from the industry are being expected.

The textile industry also expects incentives for purchasing indigenous machinery for supporting the Make-in-India mission and more foreign trade agreements and reduction in tariffs for encouraging export penetration globally.

Most of the respondents (76 per cent) are positive on India’s economic growth outlook. Seventy-two per cent of the respondents felt that employment generation and inclusive growth would be the focus area of this budget.

Eighty-eight per cent of the respondents felt that the government’s focus on infrastructure spending will continue in fiscal 2023-24 (FY24) and 53 per cent felt the subsidy burden will increase in FY24.

Developing logistics infrastructure is expected to be the key support area by most respondents, followed by easy credit availability.

Care Ratings expects the government to move towards fiscal consolidation, budgeting a lower fiscal deficit to gross domestic product (GDP) ratio of around 5.8 per cent for FY24.

With nominal GDP growth estimated to moderate to around 10 per cent, the rating agency projects gross tax collections to grow by 10 per cent in FY24.

An increase in the overall capital expenditure budget and higher allocation towards improving logistics infrastructure, defence, renewable energy and urban development are also expected.

Fibre2Fashion News Desk (DS)

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