Budget 2016: Textile industry demands major incentives

The textile industry has pitched for incentives such as halving excise duty on man-made fibre and filament and changes in labour laws in the budget for next financial year.

The textiles industry has demanded better market access to major markets like the US and EU via trade pacts to help realise its untapped potential.

The sector, which is the country's second largest employer after agriculture, contributes nearly 14% to industrial production and 4% to the GDP.

"The textile sector can provide jobs to unskilled labourers and women as well, even in rural areas, if we get government's support in the form of higher market access, changes in labour laws and opportunities to scale up," Confederation of Indian Textile Industry (CITI) Secretary General Binoy Job told PTI.

Lowering the excise duty from 12% to 6% would certainly reduce the tax burden on MMF reducing its cost to the weaver, CITI said in its pre-budget memorandum.

In India cotton consumption dominates with 65% and Man-made Fibre and Filament (MMF) at 35%.

"The main reasons for lower consumption of MMF in India is higher cost which could be as a result of manufacturing cost, excise duty and oligopolistic market situation.

"The need for reduction in excise duty is established and therefore it should be given serious consideration," CITI said.

The Union Budget for 2016-17 will be presented on February 29.

"We don't have much access to major markets like the US and European Union. To address this issue, Government should conclude free trade agreement with EU at the earliest and put in place a similar arrangement with US.

"Government should bring substantial changes in labour laws and make them more flexible. It will give us an opportunity to scale up," Job said.