The new Textile Policy announced by the government is expected to give a major fillip to the debt-ridden textile industry which has been reeling under rising cost and falling exports.

Rahul Mehta, President, Clothing Manufacturers Association of India, said the policy has removed some of the major irritants that were pulling back the garment industry for long and the results of the policy measures would be seen on the export front soon.

The inclusion of State-level taxes in the computation of duty drawback will address a long-standing demand of the industry and provide a major relief for exporters, he said.

The previous national textiles policy was unveiled in 2000 and an expert committee under Ajay Shankar, Member Secretary of the now-defunct National Manufacturing Council, was set up in 2014 to give its recommendations on a new policy.

SC Ralhan, President, FIEO said that the package meets some of the outstanding demands of the sector and will impart competitiveness to textile exports from the country.

“The rebate on state taxes through duty drawback route and grant of duty drawback in case of import of fabric under Advance Authorisation would add to cost competitiveness of exports. The 10 per cent additional TUFS subsidy for the garment sector based on additional production and employment will encourage the garment sector to modernise and augment production besides creating additional employment opportunity,” Ralhan said.

The relaxation in minimum number of days requirement under Section 80JJA from 240 days to 150 days will specifically benefit the textile exporters who at times are required to engage labour to meet the seasonal demands.

The exemption from employees’ contribution to those drawing wages up to Rs. 15,000 and contribution by the government in lieu of employer will facilitate bringing workers from informal sector into a formal sector thereby entitling them for the various benefits extended by the government aimed at labour welfare, said the FIEO President.

The textile exports have marginally declined in 2015-16 recording a total export of $36.26 billion as against $37.14 billion recorded in 2014-15.

On the reforms on employment front, Mehta said the decision of the government to bear the entire EPF (Employees Provident Fund) contribution of the industry and making PF (Provident Fund) optional for employees earning less than Rs. 15,000 per month will help both the industry and workers alike, he added.

The policy has also enhanced the limit on extra time a worker can put in his job

The government has also implemented the industry’s long-standing demand for provision to employ workers as per need and adjust workforce as per seasonal demand.

The industry has also welcomed the increase in the TUFS subsidy by 10 per cent and the provision for drawback on garment exports from fabrics imported duty-free, to the extent of duty paid inputs used in such exports.

Overall, Mehta said the policy would not only boost employment in garment industry but also attract fresh investments.

The industry would now focus on signing free trade agreement with major importers to have better access to their markets and provide some support to the textile parks being developed across the country.

For instance, an industry official said India is paying duty of 17 per cent to access the Canadian market while Bangladesh does it duty-free.

Source: Business Line