Rakesh Mehra, Chairman, Confederation of Indian Textile Industry (CITI), has presented a detailed set of recommendations to the government for the Central Budget 2024-25. These recommendations are aimed at addressing major issues within the textile sector and boosting its global competitiveness. The key proposals are as follows:

1-Removal of Import Duty on All Varieties of Cotton

• - Existing Rate of Duty: 5% BCD & 5% AIDC on cotton; 10% BCD on cotton waste
• - Requested Rate of Duty: NIL
• - Justification: Specialized cotton varieties like contamination-free, organic, and sustainable cotton are not available domestically and must be imported. The current import duty results in domestic cotton prices being 15-20% higher than international prices, negatively impacting the competitiveness of Indian textile products. Additionally, cotton waste, essential for handloom clusters producing high-value home textiles, is also affected by the import duty, impacting the entire value chain without benefiting farmers.
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• 2- Increase Basic Customs Duty (BCD) on Imports of MMF Spun Yarn

• Existing Rate of Duty: 5%
• Requested Rate of Duty: 10%
• Justification: Post-GST, the MMF Spun Yarn industry has faced cheap imports from other countries. Pre-GST safeguards like Countervailing Duty and Special Additional Duty were removed, leaving only a 5% BCD, which is ineffective. MMF Staple Fibres, raw materials for these yarns, are 25-30% more expensive in India, making imports attractive. Consequently, imports have surged significantly, hurting the domestic industry.
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• 3- Deferment of New Section 43B(h) of the Income Tax Act, 1961

• Recommendation: Defer the implementation of Section 43B(h), which classifies unpaid dues to MSMEs within 45 days as business income, leading to taxation.
• Justification: The textile industry's credit periods vary, making this rule impractical and detrimental. It hinders trading activities already pressured by low domestic demand and declining exports.
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• 4- Exempt Certain Textile Raw Materials from Quality Control Orders (QCOs)

• Recommendation: Exempt varieties of raw materials not available domestically from QCOs.
• Justification: Many high-value textile goods rely on imported raw materials not produced domestically. Imposing QCOs without sufficient domestic supply hampers production and export competitiveness.
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• 5- Statutory/Regulatory Measures to Curb Cheap Imports of Textile Products

• Recommendation: Continue Minimum Import Price (MIP) beyond September 2024 and fix a minimum support price (MSP) for various knitted fabrics.
• Justification: Recent MIP measures helped curb financially non-viable imports. Extending these measures will protect the domestic industry from cheap imports.
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• 6-Duty-Free Import Facility for Made-ups

• Recommendation: Include made-ups in the duty-free import facility provided to handicrafts, textiles, and leather garments.
• Justification: Duty-free imports of inputs are crucial for exporters to remain competitive, especially when buyers specify suppliers for trimmings and embellishments.
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• 7- Technology Mission on Cotton – II

• Recommendation: Launch Technology Mission on Cotton II focusing on advanced seed technology, global best practices, and branding of Kasturi cotton.
• Justification: To achieve the target of a US$ 350 billion textile market by 2030, increasing cotton production and productivity is essential. The previous Technology Mission significantly boosted cotton cultivation and needs to be revived with a new focus.
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• 8- Extend Interest Equalization Scheme for Textiles

• Recommendation: Extend the Interest Equalization Scheme (IES) for at least three more years.
• Justification: The IES provides crucial interest rate benefits that enhance the cost competitiveness of textile exports. Extending the scheme will support the industry in recovering from recent declines.
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• 9- Alternate Scheme to TUFS

• Recommendation: Introduce a new scheme similar to the Technology Upgradation Fund Scheme (TUFS) with fixed capital investment subsidies across the textile value chain.
• Justification: MSMEs, which form a significant part of the industry, need support for modernization and growth. The proposed scheme will provide necessary incentives for investment.
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• 10- Indigenous Textile Machinery Manufacturing Support

• Recommendation: Provide an interest subsidy and announce a special R&D scheme for textile machinery manufacturing.
• Justification: The industry depends heavily on imported machinery. Supporting local manufacturing through subsidies and
• R&D will reduce dependency and enhance competitiveness. 
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• 11-Promotion of Renewable Energy in Textiles

• Recommendation: Promote renewable energy use in the textile sector with capital subsidies and removal of restrictions on captive renewable power.
• Justification: Encouraging renewable energy use will enhance sustainability and reduce operational costs for textile units.
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• 12- National Textile Fund

• Recommendation: Create a National Textile Fund to support strategic investments, technology upgradation, and integration in the textile sector.
• Justification: A substantial fund will unlock significant investments, support MSMEs, and enhance the sector's global competitiveness.
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• 13- Procedural Issues

• Recommendation: Allow shipping-wise ROSCTL & RODTEP details on the ICE Gate Portal and combined applications for multiple ports.
• Justification: These measures will reduce transaction time, streamline processes, and benefit exporters and customs officials alike.
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• These comprehensive recommendations are aimed at strengthening the Indian textile sector, ensuring its competitiveness on the global stage, and supporting its sustainable growth.