NEW DELHI: India aims to boost its textile and garments industry in next month’s budget with financial support, tariff cuts on key inputs and incentives to produce locally, two government sources said.
An ongoing political crisis in neighbouring Bangladesh has prompted global retailers to explore alternatives, including India, for garment imports, exporters told Reuters.
“Indian exporters are finding it difficult to meet the rush of export orders in last few months as many US companies are looking for alternative suppliers,” said Mithileshwar Thakur, secretary general at India’s Apparel Export Promotion Council.
India’s textile sector employs an estimated 45 million people and the government is considering increasing the textile ministry’s budget allocation for 2025/26 by 10%-15%, from the current 44.17 billion rupees ($511 million), said a government source privy to discussions.
The government may also raise the allocation for production-linked incentives for the textile sector to around 600 million rupees from 450 million rupees for the current fiscal year, the source said.
Under this scheme, the government offers tax incentives and other concessions to companies choosing to manufacture locally.
Tariff cuts on raw materials such as polyester and viscose staple fibre, along with textile machinery, are also under consideration, a second government source said.
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