Apparel April 2019 Apparel May 2019 issue | Page 67

INDUSTRY INSIGHTS
as 3.25 per cent share in world trade—and the
per capita income reaches more than US$1,000
per annum. As per this agreement, India has
been under pressure to end export subsidies for
the textile sector since 2018. This implies that
the existing subsidy schemes—including the
Merchandise Export from India Scheme (MEIS)
and the Export Promotion Capital Goods (EPCG)
Scheme—will get affected by the same.
Facts that need to be addressed to revive
the industry:
Moving away from export-specific subsidies,
which violate WTO norms: The Government
needs to focus on regional and cluster
subsidies, and technology upgradation and skill
development subsidies that benefit all producers.
Fibre neutrality: This could give a boost to the
industry. In India, cotton and man-made fibres
(MMF) have a differential tax treatment. It was
expected that with the introduction of the GST,
the fibre neutrality aspect will be looked into.
However, the differential tax treatment continues,
with cotton taxed at five per cent and man-made
fibres at 12 per cent. Globally, man-made textiles
and garments are in high demand, with the ratio
of cotton to man-made fibre consumption at
30:70. There is a need to align our production
with the global consumption patterns. This
has led to the Government working towards
promoting new fibres to cater to global demand.
Flexibility in labour laws: A change in the
existing labour laws and skilling could boost the
textile industry. For instance, women should be
allowed to work in all three shifts, after taking
into account adequate safety measures. This
will enable the industry to employ a larger
female workforce.
Technology upgradation: This is necessary
especially for SMEs which form 80 per cent of
the industry. SMEs will benefit the most from
technology upgradation schemes. This will help
Indian players to increase both their productivity
and their competitiveness.
Evaluating trade partnerships with competing
countries: In addition, the Government needs
to carefully evaluate the various trade agreement
opportunities; Bangladesh and Vietnam benefit
from favourable access to some of the big
apparel markets.
Moving up the value chain: India has a high
share in the global export market in upstream
products such as fibre and yarn but a low share
in value-added downstream segments.
Along with agriculture and construction,
the textile industry has a huge job creation
potential. Dotted with SMEs, it is positioned
to be the poster child for Make in India. An
upgraded national policy is the need of the
hour in line with the changing consumer and
fashion trends. There is a significant demand
for investment and modernisation of machinery,
and massive skill upgradation that needs to
be addressed immediately. The country needs
meaningful export incentives and a fibre-neutral
tax policy, in addition to a big digital push in
design and automation and also meeting the
needs of the e-commerce phenomenon that is
taking over the country. A lot needs to be done
so that the country can continue to compete
with the developed countries and not languish
while competing with developing nations like
Bangladesh and Vietnam.
APPAREL
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May 2019
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