Indian Textile Industry: Policy Measures Set to Propel Growth

The Confederation of Indian Textile Industry (CITI) has commended the Ministry of Textiles for its recent implementation of crucial policy measures aimed at revitalizing the Indian textile sector. These measures, including the imposition of a Minimum Import Price (MIP) on specified lines of MMF Knitted Fabrics and exemptions for certain inputs from Quality Control Orders (QCOs), are poised to provide immediate relief to the industry while setting the stage for sustained growth.

The imposition of a Minimum Import Price (MIP) of USD 3.5/kg on selected lines of MMF Knitted Fabrics, effective until September 15, 2024, is a significant step towards safeguarding the interests of domestic manufacturers. This measure not only protects local businesses from unfair competition but also encourages indigenous production, thereby fostering a conducive environment for sectoral expansion.

Moreover, the provision for exemptions for inputs imported by Advance Authorization holders, Export Oriented Units (EoU), and Special Economic Zone (SEZ) units from mandatory Quality Control Orders (QCOs) adds a layer of flexibility and efficiency to the regulatory framework. By streamlining regulatory processes, these exemptions facilitate smoother operations for businesses, ultimately contributing to enhanced productivity and competitiveness.

These policy interventions, coupled with other growth drivers, are anticipated to propel the Indian textile industry towards its visionary target of becoming a US$ 350 billion industry by 2030. Projections suggest that this growth trajectory could attract investments worth USD 100 billion and generate over 15 million new jobs, thereby significantly bolstering India's socio-economic landscape.

However, to realize these ambitious production targets, it is imperative to ensure the uninterrupted availability of raw materials, particularly Cotton and Man-Made Fibers (MMF), at globally competitive prices. In light of this necessity, CITI advocates for a series of policy recommendations aimed at enhancing the cost competitiveness of the cotton value chain and fostering the growth of MMF textiles.

Firstly, CITI calls for the removal of import duties on all varieties of cotton, including cotton waste, to alleviate cost pressures on manufacturers and promote affordability across the supply chain. Additionally, measures to enhance cotton productivity, such as the adoption of specialized seed varieties like HTBt cotton seeds, are proposed to bolster domestic production and reduce dependency on imports.

In the realm of MMF textiles, CITI recommends several policy measures to stimulate growth and ensure access to essential raw materials. These include exempting fibers and yarns not domestically available from Quality Control Orders (QCOs), establishing a committee to oversee the availability of raw materials, and addressing GST duty inversion to mitigate capital blockage within the MMF value chain.

Furthermore, CITI underscores the importance of promoting sustainability within the industry by advocating for separate Harmonized System of Nomenclature (HSN) codes for recycled MMF-based products and expanding viscose manufacturing hubs to reduce logistical costs.

"The Indian textile industry possesses the requisite capacities and skills for growth. However, ensuring the availability of raw materials at internationally competitive prices is paramount to unlocking the sector's full potential," remarked Mr. Rakesh Mehra, Chairman of CITI. "These policy measures signal a positive trajectory for the industry, particularly in emerging sectors like technical textiles, and underscore the government's commitment to fostering a conducive business environment."

In conclusion, the recent policy initiatives undertaken by the Ministry of Textiles represent a significant stride towards revitalizing the Indian textile industry and positioning it for sustained growth. By addressing key challenges and harnessing the sector's inherent strengths, India stands poised to emerge as a global leader in textile manufacturing and innovation.