Apparel April 2019 Apparel May 2019 issue

FEATURE AS SOON AS THE ELECTION CAMPAIGN CYCLE BEGAN, KEY SCHEMES FOR THE TEXTILE AND APPAREL SECTOR WERE HANDED OUT TO MUCH ACCLAIM. ups, the scheme for development of the knitwear sector, the reduction in Hank Yarn Obligation, and various new integrated textile policies from states such as Tamil Nadu, Gujarat, and Maharashtra. But given the timing of their announcement, they might be perceived as political appeasement rather than thoughtful economic empowerment. It’s only by considering each of these that we can know whether they hold any true merit beyond the election cycle. This year’s elections come in the wake of a less than spectacular interim Budget, where many major concerns of the textile and apparel industry were left unaddressed. However, as soon as the election campaign cycle began, key schemes for the textile and apparel sector were handed out to much acclaim. Let’s look at how each of the two biggest schemes is designed and how they play a role in the political vs economic debate around the apparel industry. 26 I APPAREL I May 2019 ECONOMICS VS POLITICS The most popular scheme so far has been the Government’s decision in approving the Scheme to Rebate State and Central Embedded Taxes to support the textile sector. It is claimed that this will allow the Government to relieve the industry of any embedded Central and State levies that hinder apparel exports. By making this change, Indian apparel can expect to be more competitive in the export market while also ensuring equitable and inclusive growth. However, the scheme is only partially applicable as it only applies to apparel and made-ups, and not other associated sectors like fabric and cotton yarn, which the industry has specifically requested for. This is mainly since there are numerous embedded taxes and levies that account for nearly seven per cent on spun yarn and fabric which aren’t reimbursed and make export competition harder. The Confederation of Indian Textile Industry has emphasised that India’s cotton yarn and fabric exports need to be made more competitive as they are in continuous decline from 2013 to 2018 when they fell by 25 per cent. In the broader scheme of things, this actually looks like an opportune area for the Government to appease the populist vote by granting this relief; however, by doing so, they may be overreaching and can potentially do more harm than good by making rushed, sweeping decisions. In this respect, this scheme actually seems fairly measured while also winning points with the industry.

Apparel April 2019 Apparel May 2019 issue | Page 32