India plans incentives for synthetic yarn manufacturing

India plans incentives for synthetic yarn manufacturing


India’s share in the global synthetic textile market is a modest 5-6 per cent.

In the 1990s, India’s textile sector, a significant employer with nearly 50 million workers, has faced persistent challenges. These challenges include limited capabilities in synthetic yarn production, a market currently dominated by China, with global demand steadily increasing.

It has been noted that India’s share in the global synthetic textile market is a modest 5-6%. Consequently, there has been a heightened reliance on Chinese imports, resulting in a decline in Indian textile exports and a loss of market share for the domestic industry.

To tackle these issues, the government is contemplating measures to enhance domestic production capabilities of synthetic yarns. This involves offering subsidies and tax incentives to establish advanced manufacturing units, aiming to bolster the sector’s overall competitiveness. This information was conveyed by individuals familiar with the matter.

According to one source, the government is devising a plan to modernize small, informal weaving and processing units by upgrading their technology. The objective is to enable these units to manufacture products that meet global standards and compete with Chinese counterparts.

At present, the proposal is under discussion, and its specifics will be finalized in due course. These proposed incentives are supplementary to the production-linked incentive (PLI) scheme for the textile industry.

Regarding government initiatives, it is aimed to attract ?95,000 crore in investments over the next four to six years under the textile PLI scheme and the PM Mega Integrated Textile Regions and Apparel (PM-MITRA) park scheme. The intention behind these endeavors is to revitalize the sector and position India as a global textiles sourcing destination.

The scheme, announced in 2021 with an outlay of ?10,683 crore, is slated to run until 2029-30. Additionally, the government has set a textiles production target of $250 billion by 2030, aiming to enhance the sector’s contribution to the economy.

In fiscal year 2024 (FY24), India’s textile exports dropped to $34.40 billion from $37.16 billion in 2018. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), highlighted the significance of focusing on synthetic apparel production to tap into the preferences of developed countries.

Srivastava stressed the importance of strengthening weaving and processing capabilities, aligning with fast fashion trends, addressing non-tariff barriers, liberalizing labor laws, and improving contract enforcement.

Despite queries sent to the textiles ministry spokesperson, no response was received by the time of publication. Another source mentioned the government’s emphasis on promoting synthetic yarns in collaboration with export promotion councils and other stakeholders.

Synthetic yarns find extensive applications in textiles, apparel, and home furnishings such as curtains, upholstery, carpets, and rugs, owing to their durability and ease of maintenance. Key states involved in synthetic yarn manufacturing include Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, Punjab, and Haryana.