Budget Reactions | April 2015
Since the government has included textile and textile equipment manufacturers under the ´Make In India´ programme, there were high expectations for help from the budget for achieving its high potential for increasing industrial production, generating additional employment and improving export earnings. Budget brings no cheer to either of the industry. Textile exports from India rank at second position with $ 40 billion, China in corresponding year have exported textiles worth at $300 billion. Chinese exports of textiles are likely to decline in view of rising wages. Loss of China in global textile trade could be gain for India with its competitive pricing and availability of production infrastructure, however, this opportunity may be lost as some other competing nations, Bangladesh, Pakistan, Vietnam may fill in the gap with support from their respective governments.
Unfortunately allocation for TUFS is reduced from Rs 1,864 crore in 2014-15 to Rs 1520 crore for 2015-16. This will seriously affect new investment in textile industry. Inverted duty structure for import of critical component for manufacture of textile equipment remains unaltered. This will discourage local textile equipment manufacturers from investment into innovation as well expansion as import of used as well as cheap new equipment from China will continue unabated.
- Prakash Bhagwati, Chairman, InspirOn Engineering
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