The upcoming Union Budget will be focusing on several initiatives to boost competitiveness of Indian textile exports. Basic Customs duty on imports of long staple cotton and organic cotton will be eliminated. These cotton types are primarily necessary for manufacture of apparel. Till date, these cotton varieties attract a Customs duty of 5%, in addition to an extra 5% duty.
To discourage influx of cheap fibre imports, the Customs duty of 5% will be increased to 10% on imported man-made fibre spun yarn. The Central government is also contemplating the announcement of a National Textile Fund to support Micro, Small, and Medium Enterprises (MSMEs) in the textile sector. The fund will be primarily used for technological upgrade. Capital subsidies will be offered for adoption of renewable energy in the textile sector.
