Page 26 - February-March-2020

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Indian textile

industry in

need of major

reforms and

subsidy

According to Mr Munish Bagrodia, President Vietnam and Indonesia where it is approximately 5pc.
Northern India Textile Mills Association (NITMA), the However, in India, it is around 10-12pc, which
Indian textile industry is passing through its worst increases the cost of operations and makes the AD
phase since the past decade. industry non-competitive.

He said, “The country has a large and vibrant textile The state and central level taxes are also a major
industry, employing millions of people in the value problem which have not been subsumed in GST.
chain. But presently, the industry is passing through a These are mainly Mandi Tax and electricity duty at
bad phase.” state level and excise duty on petroleum products at
the central level.
Mr Munish Bagrodia and Mr Sanjay Garg, Senior Vice
President of NITMA, talking to the press said that The government should also look into making labor
India has a potential of grabbing a major portion of reforms immediately. There is a large potential of
the global textile trade, which might eventually shift employing less educated and unskilled masses with
from China in the aftermath of US-China changing minimal training. The Prime Minister Skill
equation. Development Scheme is a step in the right direction.

The NITMA officials said, “But here, the challenges They said that it should be implemented directly by
are completely home-grown and hampering the Central government in participation with industry. The
growth of Industry. The biggest problem is that basic Employees State Insurance (ESI) scheme is putting a
raw materials, such as cotton and polyester, are not huge burden on industry but not benefitting the labor
available at global prices that are lower. The Indian force due to lack of adequate hospitals and
government should adopt market-driven dispensaries.
agri-commodity markets and stop the practice of
buying cotton by CCI and Nafed under the MSP Simultaneously, the neighboring countries like
operations. The government should instead support Bangladesh and Sri Lanka should not be allowed to
farmers by direct cash transfers in such scenarios. It misuse the bilateral FTAs by dumping goods made
will help the industry in sourcing the raw material at out of Chinese raw materials.
global prices.”
NITMA said that India at large is facing the problem
They further added that another one of the big issues of unemployment and if the government can resolve
are the high interest rates as compared to the these issues, the textile industry can largely help the
competing countries including China, Pakistan, nation on the job front.

February/March 2020