Duty drawback benefit extended for home textile

The government extended 5% duty drawback benefit to the made-ups (including towels, bed sheets, curtains decorative cotton products etc.) sector

In a boost to the home textile segment, the government has extended a five per cent duty drawback benefit to the made-ups (including towels, bedsheets, curtains, decorative cotton products, etc) sector.

In June, the government had announced a Rs 6,000-crore package for the textile sector, aimed to generate 10 million jobs in the next three years. The made-ups sector was left out and the government was urged, led by the Cotton Textile Export Promotion Council (Texprocil), to rectify this. And, on Wednesday, the Cabinet approved the inclusion of made-ups in the apparel package, in a time-bound manner.

Extension of the package would benefit companies in the segment — Welspun, Trident, Century Textiles, Indo Count, GHCL.

 

“This is a positive move by the government and a relief to exporters of made-ups, passing through a difficult phase as their products face duty disadvantage in the main market, the European Union, as compared to products from competing countries on account of preferential tariffs given to some of those,” said Ujawal Lahoti, chairman, Texprocil.

The package includes similar measures given to apparel. Such as additional 10 per cent subsidy under the Technology Upgradation Fund Scheme, additional contribution under the Pradhan Mantri Rozgar Protsahan Yojana and Rebate of State Levies. The made-ups segment generates jobs for women and in rural areas, and the government has recognised this potential while announcing the measures.

“Beside employment, it will boost exports. Made-ups manufacturers use locally made fabrics and thus the package is likely to boost the entire supply chain, up to yarn,” said B K Goenka, chairman, Welspun Group, and co-head of the textile committee at the Confederation of Indian Industry.

R K Dalmia, senior president, Century Textiles & Industries, agreed, saying it would benefit the entire made-ups segment and help it compete in export markets.

Permissible overtime has also been increased up to 100 hours a quarter and employees' provident fund contribution has been made optional for those earning less than Rs 15,000 a month.

Reacting to the government decision, the share price of Century Textile jumped by 4.7 per cent, to close on Thursday at Rs 821.25. Trident’s stock moved up by 2.7 per cent, to close at Rs 56.80. Other stocks in this segment saw a marginal rise.