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Incentives to textiles sector likely
Why in the news ?
- The government is likely to hike import duty on about 300 textile products to boost domestic manufacturing and create employment opportunities.
Details
- Products on which imports duties are expected to increase includes some fabrics, garments and man-made fibres.
- The duties could be enhanced to 20 per cent from the current level of about 5-10 per cent.
- Foreign direct investment norms for the sector may also be relaxed.
- Increase in duties would give an edge to domestic manufacturers as the imported products are relatively cheaper.
- Increase in manufacturing activity will help create jobs in the sector, which employs about 10.5 crore people.
- Through a notification, the Central Board of Indirect Taxes and Custom (CBIC) had hiked import duties as well as raised the ad-valorem rate of duty for certain items.
- The imported products which have become expensive include woven fabrics, dresses, trousers, suits and baby garments.
- According to trade experts, India would not be able to give any direct exports incentive to the textile sector, so there is a need to support the segment to encourage domestic manufacturing.
- Imports of textile yarn, fabric, made-up articles grew by 8.58 per cent to USD 168.64 million in June.
- However, exports of cotton yarn/fabrics/made-ups, handloom products grew by 24 per cent to USD 986.2 million.
- Man-made yarn/fabrics/made-ups exports grew 8.45 pc to USD 403.4 million.
- Exports of all textile readymade garments dipped by 12.3 per cent to USD 13.5 billion.
Textile Industry in India
- The Indian Textile industry is one of the largest in the world with a large raw material base and manufacturing strength across the value chain.
- Textile plays a major role in the Indian Economy(i) It contributes 14 per cent to industrial production and 4 per cent to GDP(ii) With over 45 million people, the industry is one of the largest source of employment generation in the country
- India is the largest producer and the second largest exporter of cotton in the world. India is also the leading consumer of cotton.
- At 50% of world production, India is the largest producer of raw jute and jute goods in the world
- India is also the second largest producer of silk in the world
- The Mill sector, with 3,400 textile mills having installed capacity of more than 50 million spindles and 842,000 rotors is the second largest in the world
- The Textile sector in India is dominated by women workers, with 70% of the workforce being women.
Source
Indian Express, Make in India