Home » » TEXPROCIL

Upcoming EventsMore >>

Preview in Daegu 2018
1 F EXCO, Daegu, South Korea
07 - 09 Mar 2018
Inviting participation at Cair ...
Cairo International Convention Center
08 - 10 Mar 2018

62nd Annual General Meeting



Flag Counter

Chairman Desk

The last fortnight of January saw the release of the Annual Economic Survey as a run up to the Union Budget for the F.Y. 2018-19 which was presented on 1st February, 2018. The Economic Survey pointed to an accelerated GDP growth in the coming year clearly emphasizing the need to focus on the two sustainable engines propelling growth viz. private investment and exports.

The Union Budget 2018-19 presented by Shri Arun Jaitley, Hon’ble Finance Minister is pragmatic, growth oriented and all-inclusive in our opinion. The Budget has increased the financial outlay under the comprehensive textile sector package for apparel and made ups from Rs. 6000 crore to Rs.7148 crore. Also the funds allocation under the TUF Scheme have been increased from Rs.2013 crores in 2017-18 to Rs. 2300 for 2018-19. These measures will certainly go a long way in increasing the exports and production, besides strengthening the confidence of the exporting community.

On the export promotion front the Council successfully organized participation in COLOMBIATEX, Medellin, Colombia from 23-25 January. Colombiatex is the largest fair in South America for ‘Fibre to Fashion’, encompassing the entire Textile value chain, attracting buyers from all over LAC region to source their requirement of Textile. The Council organised group participation of its members to take advantage of this event to gain further access into the Colombian market and the LAC region.


Economic Survey

A flagship annual document of the Ministry of Finance, Government of India, the Annual Economic Survey reviews the developments in the Indian economy over the previous 12 months, summarizes the performance on major development programs, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.

Economic Survey 2018-19 expects FY19 growth to be 7-7.5 percent vs 6.75 percent for FY18. Remarkably the Survey has stated that the biggest source of upside potential is the export sector. After remaining in negative territory for a couple of years, growth of exports rebounded into positive one during 2016-17 and are expected to grow faster in 2017-18. On the flip side, however, on account of higher expected increase in imports, net exports of goods and services are slated to decline in 2017-18. The Survey also highlighted that Rebate of State Levies (ROSL) has increased exports of readymade garments (man-made fibers) by about 16 per cent but not of the others.

Further, the Survey highlighted that India has jumped 30 places to break into the top 100 for the first time in the World Bank’s ‘Ease of Doing Business’ ranking. With regard to global challenges, the Survey expressed concerns about growing protectionist tendencies in some countries, but it remains to be seen as to how the situation unfolds.


Union Budget 2018-19

The Union Budget 2018-19 has made the mandatory allocations towards previously announced schemes; interest equalization (Rs. 2500 cr), Textiles Upgradation Fund (Rs. 2,300 cr), Refund of State Levies (Rs. 2,164 cr). The extension of Sec 80 JJA to other labour intensive industries like leather/footwear is a good step —the rationalization of the 150 day rule is welcome; the reduction of corporate tax to 25% where company turnover is less than Rs. 250 crores is also welcomed by the textile industry at large, where over 90% are in the MSME sector and below this turnover level.

We also appreciate the Finance minister’s incentive to encourage participation of women in formal sector employment by reducing their PF contribution to 8% (for the first 3 years of employment) — again of special importance to our industry which employs a high percentage of women.

While the recent Economic Survey had stressed that the Goods and Services Tax (GST) Council should comprehensively review 'embedded taxes' and expeditiously eliminate them along with the taxes that get blocked because of tax inversion in order to boost India's manufacturing exports, however, much to the expectations of the exporting community, this most important policy change did not find a mention in the Budget.

We have, on our part, urged the Government to cover fabrics in the ROSL Scheme and also include cottorn yarn in the MEIS Schemes. 


ColombiaTex

Colombia accounts for 5.87% of imports of Cotton Textiles in the LAC region.  India is the 2nd largest supplier of Cotton Textiles with a share of 20.24%. It may be noted that, Colombia imported US$ 2.03 Billion worth of Textile & Clothing, of which import of Cotton Textiles was US$ 494 million in the year 2015-2016. Cotton Fabrics dominate the import market with a share of 64% followed by Yarn and Made-ups. In order to further tap the potential for trade in this market, the Council successfully organized participation in ColombiaTex, Medellin, Colombia from 23-25 January.

The report suggests that there was very good demand for Denims (including Printed & Stretched) Knitted Fabrics, Fine Count Yarns, Fashion Fabrics. We need to continue our engagement with the Colombian market and in fact the entire LAC region.


Other Promotional Events

Further, as part of our strategy to engage deeper with the other markets, the Council is also participating in the prestigious Premier Vision Fair, Paris (February 13-15) for the first time. Around 26 Indian companies manufacturing Yarn, Fabrics and Accessories have been selected to participate in this event.

This apart the Council is also organizing participation in the Preview in DAEGU fair, South Korea (March 7-9) and Cairo FashionTex fair, Cairo (March 8-10). Members should consider participating in these events in large numbers as good opportunities are discernible in these markets for Yarns & Fabrics.


Summing Up

Friends, a number of opportunities are opening up for our export products and we should make all out efforts to make the most of them. There are some policy areas where we do need support and we are confident of getting it as we redouble our efforts to overcome some of the challenges which have arisen on account of various factors.

Exporters are gradually adapting to the GST regime. After the implementation of Goods & Service Tax (GST) it was feared that locally manufactured fabrics will be costlier in comparison with the imported fabrics, and hence the demand to curb imports of fabrics was reiterated. Government has been supportive of the industry’s demands and has increased basic customs duty in this Union Budget on the import of silk fabrics and cotton quilts (HS 9404). The surcharge on imports has also been increased to 10 per cent from the earlier 3 per cent.

Friends, according to the IMF’s January update of the World Economic Outlook, the global economy is all set to record its best growth rate in seven years in 2018 following a pick-up since mid-2016. To take advantage of the recovering world economy what India needs is to plug-in this growth trajectory by developing strategies that can help the country sustain regional and global growth and secure it’s position amongst the fastest growing major economies in the World in the coming years.


Towards achieving this, we need exports to grow at the rate of 15 per cent for which the Government must – refund embedded taxes, streamline procedure for refunds, extend ROSL to Fabrics, give MEIS to Yarn along with the interest subvention, and ensure that price of Cotton remains stable and is not distorted by new formulae for MSP announced in the Budget.


Ujwal Lahoti
Chairman

:: TEXPROCIL ::

INDIAN TRADE PORTAL