FTP bringing in transformative changes
In 2022-23, India’s exports of textile & apparel (T&A) products is estimated at about $ 35.6 billion (which is somewhat closer to the exports of $ 37.5 billion during 2018-19). Though the numbers are less than 2021-22’s $ 43.4 billion, which was the highest-ever export of the Indian T&A industry, the performance must be seen in the prevailing tough market conditions. With Europe in deep trouble (due to rising inflation triggered by Russia-Ukraine war) and the US showing slower growth, exports were bound to be down. During this chaotic time, the Union Commerce and Industry Minister, Piyush Goyal (who is also the Minister of Textiles), recently unveiled Foreign Trade Policy (FTP) 2023 with an aim to increase India’s exports to $ 2 trillion by 2030. The FTP, applicable from April 1, 2023, does not have any sunset clause and the Government will keep updating and amending it, as the need arise.
The textile industry has hailed the new WTO-compatible policy as it paves the shift from an incentive-based regime to a remission and entitlement-based regime. The continuation of the Export Promotion Capital Goods (EPCG) and Special Advance Authorisation schemes will help textile firms as the industry is dependent on import of textile machinery as well as specialty raw materials that are not manufactured in the country. The proposal to internationalise domestic currency will facilitate global trade payments in India’s currency; further aiding exports.
By improving the procedural issues in customs and logistics, Government aims to reduce the logistics and processing time from the present about one month to just one day; and this is going to act as a game changer for textile exports.
Earlier in March this year, the Government of India (GoI) finalised locations for setting up of seven PM Mega Integrated Textile Regions and Apparel (PM MITRA) parks envisaging about Rs 700 billion in investment. Parks, which will reduce the logistics cost for the dwellers, will strengthen the foundations of Atmanirbhar Bharat’ making India a strong and dynamic player in global trade in textiles and apparels. As per the new FTP, PM MITRA scheme has been added as an additional scheme eligible to claim benefits under CSP (Common Service Provider) Scheme of EPCG, which allows the import of capital goods at zero customs duty for production of export items. This will reduce the capital cost for such parks.
The government intends to grow the textile industry from the present $150 billion to $ 250 billion by 2030, with exports accounting for $ 100 billion. So, will FTP and PM Mitra parks help the Indian textile industry’s exports to reach $ 100 billion? To find out, read the “Cover Story” of this edition.
Being the Official Media Partner of ITMA 2023, Milan, ITJ is highlighting some of the latest textile machinery in this issue. ITJ’s June 2023 issue will be a Mega Edition as we showcase the world’s most trending textile engineering technologies that will be on the display in ITMA 2023.
