Being the sixth largest exporter of textiles in the world, the textile industry in India contributes to 12% of the nation’s earnings via exports. The union budget of 2022-23 has come up with various incentives to help the textile sector cover the losses incurred during the pandemic and grow faster as a global player. The schemes are made in order to boost the sector’s revenue and gain global competitiveness.
The PLI Scheme And Other Fiscal Outlay Allocations
The PLI scheme for the textile sector has reserved an allocation of INR 15000 crores in the budget of 2022-23. INR 12382.14 crores have been allocated towards the textile sector by the ministry which is 8.1% higher than the revised budget of FY2021-22. Allocation for procurement of cotton by Cotton Corporation of India (CCI) has also gone up by 9.5% to INR 9243.09 crores. The power loom promotion scheme and the northeast textiles promotion scheme have not been allocated any funds in the budget.
The textile cluster development scheme has been allocated an outlay of INR 133.83 crores which has resulted in an increase of 73.8% in the total amount of budget allocation for research and capacity building in textiles.
How Helpful Will the Budget Be In Revamping The Textile Industry
The PLI scheme and other allocations are meant to bring in a revenue of RS. 3 lakh crores and 7.5 lakh additional job opportunities in the economy. The government’s target of $500 billion in exports in the next 5 years stands as a great opportunity for the textile sector to scale up its exports.
To boost exports, incentives are proposed in the union budget 2022 to be provided by exempting duties on items such as embellishment, trimming, fasteners, buttons, zippers, lining material, and packaging boxes that are will be needed by the textile industrialists who would be aiming for exports.
Certain custom exemption entries in the textile sector are being proposed in the budget. Such exemptions will not only result in a considerable increase in production of the capital goods but also boost employment in the domestic sector.
The Union Budget 2022 From Textile Exporter’s Lens
The textile industry contributes to 27% of foreign exchange inflows in the nation. Moreover, the demand for Indian textile products has been ever-rising in global markets. the exemptions made on raw materials will encourage higher manufacturing for the rising demand. The schemes and exemptions will help exporters to provide better quality goods and actively contribute to the $500 billion export target of the nation.
The Opportunities For the Textile Industry in 2022
The textiles industry is the second largest employment generation sector in the nation after agriculture, employing 32 million workers. Hence, the PLI for the textiles sector might have a massive impact on the economy. The last couple of years has been tough for the industry when the demand for garments fell subject to the pandemic and consecutive fall in demand in the market. But, the government’s encouragement to the manufacturers and support to the new entrepreneurs will pave the way for more output and employment in the sector.
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