Industry body CII and global management consulting firm Kearney has come up with a report creating a competitive advantage for India in the global textile and apparel industry. The report added that India should target a ‘realistic’ goal of US $ 65 billion worth of textile exports in next five years.
The report says that the Government’s aim of US $ 100 billion of exports is a ‘very steep goal’. India should ink trade pacts with the EU, the UK, Australia, Canada, Bangladesh and Vietnam. Notably, India exported textiles worth US $ 36 billion in 2019.
The report insists that the Government and the industry need to act as a combined force to build ‘Brand India’ in the textiles and apparel sector.
The report also suggested the Government to tweak the production-linked incentive (PLI) scheme for technical textiles and manmade fibres, and expand it to fabric and garments made of natural products, saying the selected companies may struggle to reach the threshold investments set in the scheme.
“Reaching US $ 100 billion in five years will be a very steep goal. Hence, India could emulate the best-in-class exports growth seen over the past 10 years (9-10 per cent by Vietnam in 2011-2015) and target a realistic goal of US $ 65 billion in five years,” the report said, adding that India will be able to expand its share of global exports to 6.6 per cent from 4.5 per cent.
On PLI scheme, CII and Kearney suggested ‘select tweaks’ though the ‘boldness’ is reflected in the scheme design where a starting revenue of Rs. 200 crore indicates steady-state revenue of around Rs. 490 crore (after four more years), which indicates investment of about Rs. 140 crore.
While this scheme allows manufacturers to start availing benefits any year (starting from the third year) in the seven-year window scheme, they said select garmenters may struggle to reach the Rs. 200 crore threshold in the third year and therefore may not be able to avail the benefit offered for the entire five years but only for a curtailed period.
The report says that hence, as a refinement, the Government may look at tweaking this framework to ensure that the benefits are provided for the full duration to such garmenters. Based on feedback from initial implementation, the Government must explore expanding this scheme to fabric and garments made of natural products as well to support overall fabric and apparel growth.