Delegation of FICCI Textiles Committee met Smriti Zubin Irani, Minister for Textiles and Women and Child Development recently and impressed upon her to launch a special mission for synthetic fibre and textiles value chain to make Indian industry competitive in the global trade which is predominantly done in the man-made fibre (MMF)-based items.
Global textile markets are swiftly shifting from exports of cotton yarn to manmade fibres. Hence, India must take urgent steps to keep pace with the global markets by increasing production and exports of MMF based products.
India’s per capita consumption of Man-made Fibre is around 3.0 kg, whereas the world per capita consumption is 12 Kg. There is a wide gap and tremendous opportunity for enhancing the consumption of MMF based textiles and clothing in India.
Government needs to announce a MMF Textile Mission for giving thrust to development of Synthetic and Speciality fibres in India by making the value chain competitive and providing raw materials at competitive prices, said FICCI. This mission mode approach with specific time bound targets will help India to garner higher export share in global markets and new employment opportunities across India.
Other important issues raised by the FICCI delegation were need for simplification of GST rates for the entire textile value chain (one rate for the entire textile value chain), rising imports of garments from Bangladesh and need for separate housing scheme for garment workers in the cities.
Currently, due to different GST rates in the textiles value chain refund accumulates due to inversion. Collapsing all these rates into a single rate of 12 per cent does not build up input tax credit, does not lead to refund of input tax credit which would imply less paperwork and less applications for the industry, noted FICCI.
Further, garment imports from Bangladesh have increased almost by 82 per cent in 2018-19 vis-a-vis 2017-18 (from $200 mn to $365 mn) pointed out FICCI. Imported garments have got 12-15 per cent advantage vis-a-vis domestic garments in the post GST period. FICCI suggested that under the SAFTA agreement only those goods should be exempted from custom duty, whose raw material is also manufactured by SAFTA countries. Yarn and fabric forward rules of origin are required under SAFTA to ensure any duty free garment import is made up of yarn or fabric from within the SAFTA countries only.
To increase the employment of women workers in garment sector, FICCI suggested increasing the deduction under IT Act Section 80JJAA for women work force from present 30 per cent to 60 per cent per annum threshold. IT Act Section 80JJAA provides deduction in respect of employment of new employees drawing emoluments up to Rs. 25,000 per month. This would encourage employers to employ women work force which is now constrained by social and statutory conditions.
FICCI also requested the Minister to come out with a Worker Housing scheme for apparel sector in the cities. The need for such a scheme arises from the growing difficulties faced by women garment workers due to lack of safe and conveniently located accommodation in cities. Also, to arrest and increase the declining female workforce ratio in the country, it is important to have such a scheme for the women workers in and around cities, noted FICCI.