Ahead of the Budget 2025, set to be revealed on 1st February, the textile and apparel sector has a list of expectations and recommendations that the Government should pursue.
Rajeev Gupta, CEO, RSWM Limited has several recommendations to improve the industry’s viability and cost competitiveness. Since Indian businesses deal with quality control orders (QCOs) on MMF (man-made fibres) and yarn, raw material prices in India are significantly higher than those in other countries. In order to guarantee a more competitive raw material market, the Centre should liberalise import regulations and reduce or do away with customs duties on MMF fibres and necessary chemicals.
Import taxes to protect local farmers are harming the textile value chains since specialist cotton is now imported because it is not available domestically. The PLI (production-linked incentive) program, which exclusively applies to synthetic fibre, is another oddity, he adds. The PLI must be applicable to the whole textile and apparel industry in order to support these businesses and encourage more investment. The government has to bring back the Technology Upgradation Fund Scheme.
Additionally, a DBT (direct benefit transfer) program ought to take the role of the cotton procurement program under the MSP (minimum support price). A Cotton Price Stabilisation Fund will be established to manage price volatility and guarantee the competitive supply of raw materials. Price volatility could also be reduced by an interest subvention program and an eight-month credit limit period (rather than three months) for cotton buying.
In the end, the industry requests that Section 43B(h) of the IT Act of 1961 be postponed. According to the new Section, payments that an MSME unit does not receive from a company within 45 days will be taxable in the current fiscal year as part of the business income of the firm. The production schedule and planning for the whole textile value chain have been impacted by the new regulation. To give the industry enough time to adjust to the changes, this bill should be postponed and reintroduced later in stages.
The CMAI’s recommendations include a Government-supported interest subvention scheme for addressing the working capital requirements of the apparel sector, along with a reduced interest rate for prompt repayment. MSMEs in the Garment Sector need to be recognized as secured creditors for NCLT cases, adds the organisation. CMAI is also for extending the PLI scheme to encompass all categories of garments, the withdrawal of the 43B(H) clause of the Income Tax Act of 1961 and a thorough review of the FTA with Bangladesh and duty-free imports from the country.
On the retail side, Shyam Prasad, co-founder and CEO, Brand Studio Lifestyle says that he is certain that through focused announcements and incentives, Union Budget 2025 will give top priority to projects that empower retailers, small enterprises, and startups. For the business to thrive, policies that streamline taxes, encourage environmentally friendly behaviour, and improve internet infrastructure will be essential. Furthermore, further chances in India’s garment industry may arise from a lower tax rate for new manufacturing facilities.
Ritesh Khandelwal – Co-founder, Zyod, which is one of the leading marketplaces for the apparel industry, providing end-to-end design to deliver solutions to fashion brands across the globe, sees immense value in a budget that prioritises R&D for smart and sustainable textiles, incentivizes the adoption of cutting-edge tech like AI and removes roadblocks in customs and logistics.
Siddharth Dungarwal, Founder of menswear brand Snitch, anticipates measures that simplify operations, encourage sustainable manufacturing, and support local brands and retailers in scaling globally. Policies such as tax rationalization, investment in technology upgrades, and incentives for developing a future-ready workforce.
