Focus on ELS cotton in the budget can boost India’s garment exports, says TEA, Retail News, ET Retail

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The budget announcement about increasing the yield of the extra long staple (ELS) in the country is expected to boost India’s garment exports and the import dependence of the industry for the ELS cotton.

The government has announced a scheme for increasing the production of Extra Long Staple Cotton in the country under Cluster Development Initiative through PPP mode.

“The focus on enhancing the yield of Extra Long Staple (ELS) cotton, a long requirement of textile industry, will help to increase manufacturing of value added garments and also to reduce the import of ELS Cotton,” said KM Subramanian, President, Tiruppur Exporters’ Association (TEA).

Ravi Sam, chairman, Southern India Mills Association (SIMA) said, “The Association can match with the international Extra Long Staple cotton varieties and would take initiatives to increase the production under the said scheme.”

“After introduction of Bt technology only for Long Staple Cotton, the industry started facing shortage of ELS cotton. The industry’s requirement of ELS cotton is around 20 lakh bales while the country produces only 5 lakh bales and heavily depends on imports of superior quality ELS cotton,” said Sam.

While welcoming the increased budget allocation of Rs.900 crore for ATUF Scheme (Amended Technology Upgradation Scheme) for 2023-24 against Rs.600 crore allocated in last year 2022-23, Subramanian said he was hopeful that the increased allocation would help to clear the ATUFS pending claims, a major requirement of textile industry.

Tirupur Knitwear sector is expected to be benefitted by the PM Kaushal Vikaas Yojana.

“Unfortunately, there was no announcement on continuance of ATUF Scheme in the Union Budget and he was hopeful that the government would announce it in near future,” said Subramanian.

As more than 80% of the textile units come under the MSME category, the textile industry would be the major beneficiary ECLGS scheme which has received allocation of Rs 9,000 crore.

Introduction of separate HS codes for different staple length of cotton including Extra Long Staple cotton, when imported from other countries is a move that the industry had been demanding.

“The government could have avoided the increase in the Basic Customs Duty on textile machinery from 5% to 7.5% as the country does not produce even 20% of its requirement of the machinery. The will affect the global competitiveness,” said Sam.

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