Home / Knowledge / News / Textiles / Budget impact on Textiles and Apparels
Budget impact on Textiles and Apparels
01
Mar '08
CRISIL's Impact Analysis of Union Budget 2008. CRISIL release analyses and views on the Union Budget 2008 announcements and how they impact the Indian Economy, Industries and Companies.

The sharp appreciation in the value of the rupee vis-à-vis the dollar and the euro has affected garments and home textile exports to the US and EU. To protect exporters, the government had raised the duty drawback and DEPB rates by 3 per cent in July 2007.

While this has partially offset the loss resulting from the rupee appreciation, the overall impact has been severe pressure on the margins of exporters having large dollar exposures.

The Indian textile industry continues to be characterised by high level of fragmentation across the value chain, and a weak weaving and processing sector. Although the TUFS has encouraged investments, there has been a considerable skew in investment towards spinning.

To correct this imbalance, the government announced some modification to the TUF scheme by lowering the interest rate subsidy for spinning from 5 to 4 per cent, while retaining it at 5 per cent for other constituents of the value chain. There is a need for greater investments in the weaving and processing segment to improve India's competitiveness as a key supplier of garments and made-ups in the global market.

Cotton and Cotton yarn:
• CRISIL Research expects cotton yarn demand to grow at a CAGR of around 6 per cent in the medium-term, driven by strong demand from the domestic market, which accounts for around 67 per cent of cotton yarn demand. While demand growth continues to be robust, there has been considerable capacity addition in spinning, resulting in an oversupply in the sector.

• Global cotton production in 2007-08 is expected to fall, while India will be the only major cotton producing nation to experience a bumper cotton crop. With global cotton consumption expected to outstrip production, cotton prices are likely to increase. CRISIL Research expects domestic prices to increase by 6-7 per cent, which would exert pressure on the margins of spinners.

Must ReadView All

Pakistan's Finance Minister Mohammad Ishaq Dar presenting Budget 2017-18 in National Assembly in Islamabad on May 26. Courtesy: PID, Pakistan

Textiles | On 27th May 2017

Pakistan Budget 2017-18 proposes 4 new measures

To support the textile sector in Pakistan, finance minister Mohammad...

Courtesy: IRRC Institute

Apparel/Garments | On 27th May 2017

Up to 7.5 mn retail jobs in US at risk due to automation

About 6-7.5 million retail jobs in the US are likely to be automated...

Textiles | On 27th May 2017

Indian textiles ministry promotes wool sector

The ministry of textiles has taken multiple steps to promote the wool ...

Interviews View All

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Anshul Sood
Oceedee

‘Indian footwear market is nascent and largely a trend follower’

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search