Budget 2023: Textile clips for changes in import-export levies

The Covid-19 epidemic has had a particularly negative impact on the textile industry. As developed markets stalled, the protracted Russia-Ukraine war and its side effects of rising inflation and monetary tightening drove the industry down just as output and exports started to rebound. Issues and concerns

Issues and concerns

• Exports have slowed amid the downturn in global demand
• Domestic demand also tepid amid a rural sluggishness
• The industry expects a cotton shortage

Government support

• Rs 10,683 cr Production Linked Incentive scheme in place
• Man Made Fibre (MMF), garments, and technical textiles focus areas
• 7 PM Mega Integrated Textile Region & Apparel Parks planned
• MITRA scheme providing complete value chain support for textile
• $100 billion export target by 2030

Key demands from Budget

• Incentive scheme for textile value chain
• Cotton Price Stabilisation Fund Scheme to push exports
• Replace Technology Upgradation Fund Scheme with PLI type plan
• Issue claims for 40,000 pending cases in ATUFS

Tax expectations

• Remove 11% import duty on cotton, and cotton waste to remain competitive against Bangladesh
• Retain 5% import duty on all types of textile machinery; 5% import duty till March 31, 2023, 7.5% thereafter
• Increase basic customs duty on imports of MMF Yarn to 10% from 5%
• Restore duty-free imports facility against made-ups exports
• Cover cotton yarn exports under a 3% interest equalization scheme

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