The Effect of the Indian Budget for 2024–2025 on the Textile and Apparel Industry
The Indian Union Budget for 2024–25 has elicited mixed reactions from the textile and apparel industry, with stakeholders acknowledging both positive developments and areas of concern.
Positive Developments:
- Increased Budget Allocation: The textile sector has received a 28% increase in budget allocation, totaling ₹4,417.03 crore for the fiscal year 2024–25. This enhancement is expected to bolster various initiatives within the industry.
- Skilling Incentive: A monthly skilling incentive of ₹3,000 per worker has been introduced, aiming to enhance the skill set of the workforce and improve productivity.
- Enhanced Credit Guarantee Scheme: The expansion of the credit guarantee scheme is anticipated to facilitate easier access to financing for micro, small, and medium enterprises (MSMEs) in the textile sector, promoting growth and innovation.
- Reduction in Customs Duty on Spandex Yarn: The reduction of the basic customs duty on raw spandex yarn from 7.5% to 5% is expected to lower production costs for manufacturers utilizing this material.
Areas of Concern:
- Lack of Comprehensive Support: Some industry leaders have expressed disappointment over the absence of more extensive measures to address critical needs, such as capacity building, modernization, and cost competitiveness within the textile sector.
- Absence of Incentive Schemes for MSMEs: The budget does not include specific incentive schemes for textile MSMEs, which are vital to the industry’s growth and employment generation.
While the Indian Union Budget for 2024–25 introduces several initiatives aimed at supporting the textile and apparel industry, including increased funding, skill development incentives, and financial support for MSMEs, there is a call for more comprehensive measures to address the sector’s broader challenges.
