An Estimation Report by DGCI&S on Continuous Growth in Textile Business Exports
Figures from the Directorate General of Commercial Intelligence and Statistics (DGCI&S), show a 14% year-on-year growth in export of textile and apparels. A positive for the industry, which employs nearly 10 crore people, the sector has overcome a difficult period.
Government policies have played a key role in boosting the growth of textile business in India. Schemes such as SCBTS have not only reduced skill gaps but have also boosted value-added employment opportunities. Raising of customs duty on imported textile items have also added to the industry's growth. In August 2018, import duty on 328 textile items were raised.
According to the report of DGCI&S on textile Exports also benefited from the US China trade war and the depreciation of the rupee against the US dollar. However, to maintain the growth momentum, the industry needs to overcome certain challenges. Indian textile manufacturers must offer product varieties and step up manufacturing capabilities to cater to the rising demand for quality products.
Textile manufacturers must step-up value addition capabilities into operations to keep competitors like Bangladesh bay. Also, to free working capital absence of input tax credit on domestic sales of synthetic fibres warrants immediate attention. Inverted tax structure of synthetic textiles is another bottleneck. The inverted tax duty is making imports of such textiles cheaper.
Textile manufacturers must also focus on volume orders as they will be able to garner greater profits through them in future. Simultaneously, there should be a focus on product diversification and customer addition to aid volume sales.
To bolster operations and manufacturing capabilities, textile manufacturer can avail funds in the form of business loans at a competitive rate of interest. These loans are collateral-free which means that they can be procured without pledging any security and comes with a flexible repayment tenor.
Additional Read: How to Increase Business Efficiency with Working Capital Cycle?
March 29th, 2019