The Budget 2020-21, presented by Hon’ble Finance Minister, Ms. Nirmala Sitharaman, was welcomed with great eagerness by the Indian Textile Industry, as it positively addressed many of the existing issues of the Indian textile manufacturers. One of the key highlights of the Budget was the allocation of Rs. 1,480 crores to boost the Technical Textile Industry and become self-sufficient, while reducing imports. The Technical Textile Industry has a huge potential market globally. India imports massive quantities of technical textiles, including medical textiles and supplies, automotive, protective clothing in defense organizations, agriculture, etc. worth $16 billion every year.
Apart from this allocation of budget, another major step taken by the Government was the removal of anti-dumping duty on purified terephthalic acid (PTA), one of the most critical commodities for the synthetic yarn and textile industries. This step will immensely prove beneficial for synthetic yarn spinners and furnishing fabric manufacturers.
In addition, the launch of ‘NIRVIK’ scheme introduced by Export Credit Guarantee Corporation of India (ECGC), to enhance loan availability for exporters and to ease the entire lending process, was another step forward. Under this scheme, the insurance cover for exporters guarantees a credit of up to 90 percent, as compared to the previous credit guarantee of up to 60 percent.
The Indian Textile Industry is one of the most significant contributors towards the Indian economy, with over 13 percent of industrial output and over 2 percent to the entire GDP of the nation. The year 2020 has started on a positive note for the Indian Textile Industry. The proposed plans and schemes have the potential to increase the contribution of the industry towards the country’s economic growth even further. However, this is just the beginning and the true effects remain to be seen in the coming months.