India May Give Sops To Boost Synthetic Yarn & Fabric Output

The Indian government is considering measures to boost domestic production capabilities of manmade fibre or synthetic yarns and fabrics by offering subsidies and tax incentives.

The government will also help to set up advanced manufacturing units, and strengthen the sector’s overall competitiveness, according to two people aware of the matter.

“The government is working on a plan to revamp small, informal weaving and processing units by upgrading their technology,” Mint reported quoting sources.

“This aims to enable these units to manufacture products of global standards and compete with Chinese products,” the source added.

India’s share in the global synthetic textile market is a modest 5-6 percent, which has led to rise in dependence on Chinese imports, a dip in textile exports, and loss of market share for domestic industry.

According to the source, currently, the proposal is in the discussion stage, and its contours will be finalised soon.

These proposed incentives are over and above the production-linked incentive (PLI) scheme for the textile industry.

“With less than 40 percent of Indian textile exports being synthetic, despite developed countries’ preference for such materials, India misses out on a substantial segment,” Ajay Srivastava, Founder, at Global Trade Research Initiative (GTRI) said.

“This also means failure of most Indian firms to connect to fast moving textiles global value chains,” he added.

Synthetic yarn and fibre imports, in particular, have shown rapid growth. For instance, the import of just high tenacity nylon yarn surged from $467 million in 2018 to $1.031 billion in 2023.

“The government is focusing on promoting synthetic yarns and this will be done in coordination with export promotion councils and other key stakeholders,” the source stated.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *