Roll back of GST hike, stabilise cotton price are key expectations of textile sector from Union Budget 2022 for textile sector

The opening up of the world economy including the markets, malls, travel has helped the textile industry to rebounce from COVID lockdowns and restrictions. The anti-China sentiment has helped Indian Textile manufacturers and exporters to grab a bigger share in the global textile business. The textile industry feels that it is the opportune time for the Centre to provide appropriate support to the industry to fuel its next phase of growth. Hence the expectations of the Textile Industry from the Budget 2022 and Govt are as under:-

Roll Back GST:- Despite concerns expressed by the industry, the Govt increased the GST on textiles from 5% to 12%. The new GST rates will kick in from 1 January, 2022. This will have a negative effect on the growth of the Textile Industry which contributes a major share in employment generation and export earnings. It is requested to keep the GST rates at 5% only.

Stabilise Cotton Prices:- The cotton is the major raw ingredient (60%) and the prices of cotton have skyrocketed since the last 11 seasons. We request the Govt to stabilise the cotton prices. The Govt may set up a cotton price stabilisation fund scheme comprising 5% interest subvention or loan at NABARD rate of interest, reduction in margin money from 25% to 10% and increase in the cotton working capital limit from 3 months to 9 months.

Simplify CAROTAR 2020:- Exporters are facing difficulty in clearance of import goods from FTA Countries in the wake of implementation of Customs Administration of Rules of Origin under Trade Agreements (CAROTAR), 2020. The Govt should simplify the clearance of import goods from FTA Countries.

Incentivise Renewable Energy:- Textile industry is the major consumer of power. To encourage use of renewable power, the Govt must encourage investment in green energy and eco-friendly technologies by offering tax benefits to the manufacturers.

User :- Gopal Modi

Email :-gopal@coldcococonsultancy.com