Ease of Doing Business for MSMEs: The government’s choice to extend the Rebate of State and Central Taxes and Levies (RoSCTL) scheme on apparels and made-ups till 31 March 2024 and other current schemes for the sector will most likely add yet another 4-6 million jobs ahead, according to the apex textile body The Textile Association (India). The Union Cabinet on Wednesday had announced RoSCTL continuation with the similar prices as notified by the Ministry of Textiles in March 2019 on the export of apparels and made-ups (non-apparels such as bed linen, carpets, and so forth). According to the government, the move is “expected to make these products globally competitive by rebating all embedded taxes/levies which are currently not being rebated under any other mechanism. It will ensure a stable and predictable policy regime and provide a level playing field to Indian textiles exporters. Further, it will promote startups and entrepreneurs to export and ensure the creation of lakhs of jobs.”
“From the last three-four years, textile exports were stagnant at around $38-40 billion. The government is now targetting to touch $80 billion by 2024-25. In the upcoming textile policy, the government is also aiming to make Indian textiles more competitive in the world. The biggest beneficiary here would be MSMEs and enhance India’s competitiveness against Bangladesh, Vietnam, Myanmar, etc. With all these schemes implemented properly, then another 4-6 million jobs will be created,” RK Vij, Vice President, The Textile Association (India) told TheSpuzz Online.
India’s textiles and apparel sector is the second-biggest employer with direct employment creation of 45 million and yet another 60 million in allied industries. The nation is also the second-biggest manufacturer of PPE kits globally. PPEs international industry is at present anticipated to be more than $92.5 billion by 2025, up from $52.7 bn in 2019, according to the government’s Invest India initiative. While FDI in the textiles and apparels sector had hit $3.75 billion in March 2021, the country’s exports of textiles and apparel are most likely to develop to $65 billion by 2025-26, expanding at a CAGR of 11 per cent.
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Textiles ministry in a statement on Wednesday had noted that that there are many taxes/duties that are levied by central, state, and regional government but are not refunded to the exporters. Such taxes and levies get embedded in the cost of the final exported item that increases the cost of the apparel and made-ups and tends to make it tough for them to compete in the international industry. These embedded taxes incorporate duties and cesses on fuel applied for transportation of goods, generation of energy and for the farm sector, mandi tax, duty on electrical energy charges at all levels of the production chain, stamp duty, GST paid on input such as pesticides, fertilizers, purchases from unregistered dealers, and so forth., and cess on coal or any other solutions.
On Wednesday, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel welcoming the move stated that the move will aid “the Indian textile value chain attain $100 billion annual exports in next three years.”
Post lockdown last year, textile activity witnessed contraction ahead of it began to recover back in September with an raise in yarn rates. The recovery had hit about 80 per cent of the production capacity by December last year. “Up to March last year, all textile units were running up to 80-90 per cent of their capacity before they contracted in production capacity to 30-40 per cent. The activity picked up in September and by December it scaled to 80-90 per cent production capacity. Cotton and synthetic yarn made great profits with the increase in prices,” TK Sengupta, quick previous president, The Textile Association (India) had told TheSpuzz Online.