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

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