The Union Budget 2017-18 was presented by finance minister Arun Jaitley on February 1, 2017 in Parliament-the fourth presented by the Narendra Modi government. The Indian textiles and apparel industry has measured this as a growth-oriented budget. AMarket Intelligence-Fibre2Fashion analysis.


Many positive steps have been taken by the Indian government which are growth-oriented for many industries, including the textiles and apparel industry.

The following are the key points that influence the development of this sector:

  •          The government has set up a committee to double farmers' income by 2022.

  •          Rural India has been given high priority. The government has set a goal to take 1 crore households out of the poverty line by 2019 by providing housing and allocating till date the highest fund allocation to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the rural job scheme.

  •          The government has doubled the lending target to Rs2.44 lakh for the Micro Units Development & Refinance Agency Ltd. (MUDRA). Under this scheme, around 70 per cent of beneficiaries are women, recognising the business ability of women.

  •           The government will establish 100 international skill centres for skill development of youth.

  •          To make travel and transportation hassle-free, the government will integrate road, rail and ship networks to provide an end-to-end solution with infrastructure development schemes.

  •           Corporate income tax has been reduced by 5 per cent for the micro, small and medium enterprises (MSME) industrial units with turnover up to Rs50 crore.

  •            An additional budget allocation has been made for NPA (non-performing assets) accounts of banks, and for promoting cashless transactions.

  •          To attract more foreign investment and development of industry, the government has relaxed the rules of foreign direct investment (FDI). The Foreign Investment Promotion Board (FIPB) will be disbanded, which will also be beneficial for industry. This step of the government will ensure the entry of lots of foreign funds into the e-commerce start-up arena too.


The Indian government has taken many positive steps for the growth of the Indian textiles and apparel industry with the following allocated budget:


In budget 2017-18, the total expenditure allocation for the ministry of textiles is Rs62, 265 million which is Rs596 million less compared to the revised budget 2016-17 expenditure allocation of Rs62,861 million.


For FY 2017-18, the establishment expenditure budget allocation for the secretariat and textile commissioner has decreased while for the jute commissioner it has been increased marginally.


Rs20,130 million has been allocated for the Amended Technology Upgradation Scheme (ATUFA), which is Rs5,970 million less than the last budget fund of Rs26,100 million. Still, there is hope among industry people that this cut-down in the ATUFS fund allocation will not create any limitations to avail interest refund or capital subsidy for industrialists who have already availed the loan under the last TUF and ATUFS schemes.


Following the price stabilisation of cotton, the Indian government has decided to almost demolish the budget allocation for the Price Support Scheme (PSS) under which last year Rs6,097.5 million was allocated to procure cotton by the Cotton Corporation of India (CCI).


Under the National Handloom Development Programme, the budget allocation in 2017-18 for the Trade Facilitation Centre and Crafts Museum and Handloom Cluster Development Programme has seen the highest cut-down in comparative terms.


Except for Hast Kala Academy, under handicraft development, all different programmes have been given moderately less amounts than last year's budget.


The budget allocation for integrated wool improvement and development programme is Rs185 million, almost double than last year's budget fund of Rs93.2 million for development of the overall woollen textiles industry.



Budget 2017-18 was positive for the silk textiles industry. The government has increased the amount considerably in the current budget for the development of the Central Silk Board and Silk Mega Cluster.


The government has allotted comparatively less amount compared to last year's budget for the development of jute industries.


For the development of the weaving industry, the budget allocation for in situ upgradation of plain powerlooms has been increased. Rs683.1 million amount has been allocated to the scheme in this budget 2017-18, which is almost 42 per cent more than last year's budget allocation of Rs480 million. In this scheme, powerloom holders will receive support from the government to improve their weaving technologies instead of changing the entire plainloom.


For the overall development of the textiles and apparel industry, the government has taken some major steps. For the Remission of State Levies (ROSL), the government has increased their budget allocation by 289 percent to Rs15,550 million, which will be highly beneficial for the garments and made-ups export industry. As a major step to lift employment specially in the clothing industry, the government has introduced the Pradhan Mantri Paridhan Rojgar Protsahan Yojna (PMPRPY) with a budget allocation of Rs2,000 million.

For research & development in textile, the budget has been increased by 33 percent to INR 200 million which was last year only INR 150 million.


The North East Region Textile Promotion Schemes got relatively less amount compared to last year.


For the public sector undertakings, budget allocation amount remained the same as last year.


Apart from those mentioned above, the following are other key points that came out of this year's budget:

  •          Different tax structures for the textiles and apparel industry will remain unchanged till the GST comes into operation. As the last FY 2016-17, the excise duty, service tax and Central Value Added Tax (Cenvat) route will stay same till the implementation of the GST.

  •          Cotton-based textiles industry would get significant benefit by the cluster approach for contract farming.

  •       Customs duty on nylon mono filament yarn has been cut down by 2.5 per cent which will be helpful for the export market of fishing nets.


The overall budget 2017-18 remains optimistic, and focuses on a progressive textiles and apparel sector. This budget will remain highly positive for the development of woollen and silk textiles, weaving industries (with powerloom promotion schemes) and textile infrastructure development. Although, for the centre's establishment expenditure, central sector schemes/projects, development of handloom, handcraft and jute industries, research and capacity building, North East Textiles promotion scheme were assigned significant amounts but less than the last revised budget allocation figures.

However, many industrialists from the sector feel that the budget could have been better.