Higher funds for cotton procurement will ensure price stability: CITI

Although Indian textile industry needs immediate relief from the financial stress, more especially in the spinning sector, the interim budget presented by finance minister Nirmala Sitharaman did not make any major policy announcement before the general election likely to be held during March-May this year.

CITI chairman Rakesh Mehra said in a statement that the budget allocation for textiles has increased by 27.6 per cent, largely due to the allocation of ₹600 crore to Cotton Corporation of India (CCI) towards the cotton MSP (minimum support price) operations. CITI has recommended commencing selling the cotton from February/ March depending upon the arrival pattern, retaining the MSP procured cotton as a buffer stock, releasing the cotton whenever the Indian cotton price exceeds the international price, extending a uniform fee period of 60 days for all the actual users, etc.

Mehra further stated that the apparel industry is happy to note the extension in the RoSCTL scheme for 2 years. However, in the present budget, the allocation for RoSCTL and RoDTEP has increased by 10 per cent and 5.8 per cent respectively, which is modest. The industry is trying to enhance export performance and expects better allocations for trade promotion in the full budget to be announced after the elections.

Industry appreciates the increased allocations towards PM MITRA and National Technical Textiles Mission (NTTM) and Research & Capacity Building, which highlight the stress of the Government on securing investment. However, the slow uptake of Product-Linked Incentive (PLI) scheme and an absence of alternatives to the TUFS scheme is impacting investment in the sector, Mehra said.

CITI expressed its happiness about the budget’s focus on stimulating domestic consumption which may drive economic expansion and can be good for all manufacturing segments, including textiles, which are facing demand slump.

“The Government has not made any changes in the existing BCD & Indirect taxation, we are extremely sure that the Government will consider the industry’s demand to remove the import duty from cotton and cotton waste as also increase the BCD on MMF yarn from the present 5 per cent to 10 per cent to curb cheaper imports and reduce blockage of working capital, in the full budget,” said Mehra.

Clothing Manufacturers Association of India (CMAI) also welcomed the decision by the Union Cabinet to extend RoSCTL scheme for export of Apparel/Garments and Made ups up to 31 March 2026. Rajesh Masand, CMAI president, said, “The continuation of Scheme for proposed duration of two years will provide predictability and stability which is essential for long term trade planning, more so in the textiles sector where orders can be placed in advance for long-term delivery.” The RoSCTL Scheme is in line with the universally accepted principle of international trade that taxes and duties should not be exported, to enable a level playing field in the international market for exports.

Commenting on the budget, Vinod Kumar Gupta, managing director, Dollar Industries Limited, said, “We applaud the government’s vision to shape India into a Vikasit Bharat by 2047. As a responsible corporate entity, we are dedicated to contributing to this transformative path for the nation’s prosperity. The decision to maintain the existing income tax slabs is a positive step, offering stability and predictability for taxpayers, crucial for sustaining economic growth and promoting individual financial planning. We express gratitude for the government’s commitment to retaining the current tax rates for companies, LLPs, and individuals. The India-Middle East-Europe Economic Corridor opens unprecedented opportunities for businesses to broaden their horizons and participate in cross-border trade. The corridor’s focus on connectivity and infrastructure development resonates with the logistical and supply chain requirements of industries such as textiles.”

“We acknowledge the government’s proactive and all-encompassing approach in the interim budget. We eagerly anticipate contributing to the shared journey towards a more robust, inclusive, and sustainable India. In this interim budget, the government has suggested a capital expenditure (Capex) of 11.11 lakh crore, aiming to enhance the purchasing capacity of each individual,” Gupta added.

Fibre2Fashion News Desk (KUL)