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Cabinet clears Rs 6,000-crore package for textiles, apparel
NEW DELHI: The government on Wednesday approved a Rs 6,000-crore special package for textiles and apparel sector to create 10 million new jobs in the next three
NEW DELHI: The government on Wednesday approved a Rs 6,000-crore special package for textiles and apparel sector to create 10 million new jobs in the next three years, attracting investments of $11 billion and generating $30 billion in exports.
The measures approved include incentives for duty drawback scheme for garments, flexibility in labour laws to increase productivity, as well as tax and production incentives for job creation in garment manufacturing.
“Over the last few years, apparel manufacturing had shifted to countries such as China, which had cost advantages. However, China’s cost advantage has been neutralised to some extent because of increase in labour wages. We have advantages of economies of scale. Therefore, it was decided to take steps to boost the sector,” finance minister Arun Jaitley said. “The package will help in realising the true potential of employment generation in the textile and apparel sector.”
The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.
“We will overtake Vietnam and Bangladesh in garment exports within three years if we implement the package properly,” textiles secretary Rashmi Verma said.
Changes in labour laws include capping overtime hours for workers at eight hours per week in line with the guidelines of the International Labour Organisation (ILO) and introduction of fixed-term employment in the garment sector, among others. A fixed-term workman will be considered at par with a permanent workman in terms of working hours, wages and other dues.
“Some of the incentives have a three-year sunset clause,” economic affairs secretary Shaktikanta Das said.
Following the Cabinet approval, textile stocks surged up to 19% on the BSE, led by Nagreeka Exports (up 18.86%). It was followed by Shekhawati Poly Yarn (up 17.60%) and Garden Silk Mills (up 9.96%).
