Several international retail brands are planning to invest in Indian textile sector as the Central Government has announced many incentives, including tax exemptions, to the textile and garment industry in the Union Budget 2013-14. According to the textile industry analysts, there will be 5-7 percent increase in foreign direct investment (FDI) with global brands such as Walmart, Hennes and Mauritz group (H&M), IKEA and Tesco planning to invest in Indian retail segment.
Mr. Prashant Agarwal, joint managing director of Wazir Advisors Pvt Ltd, told fibre2fashion, “With several incentives and tax exemption announced by the Finance Minister P Chidambaram in the Union Budget 2013-14, several multi-brand retail companies including Walmart, H&M, Tesco and IKEA have shown interest to invest in the Indian textile and garment industry.”
“The removal of excise duty on branded garments would mean low manufacturing cost of labeled clothing, which will increase competition in the apparel industry and encourage foreign investments in the sector. So, the textile and garment sector can expect a 5-7 percent increase in FDI by next financial year,” he informs.
According to Mr. Ashish Dikshit, CEO of Madura Fashion and Lifestyle, the Indian clothing and textile industry has witnessed a significant slowdown in the last two years due to combined impact of inflation and excise duty. “The new excise regime proposed in this budget would significantly ease the cost pressures in the industry. It should also bring cheer to consumers and encourage greater consumer spending through stabilization of prices in the category,” he adds.
“It is great to see the focus coming back on clothing and food – the two sectors that have been the backbone of the Indian economy,” says Mr. Kishore Biyani, Group CEO of Future Group.
He mentions, “The much needed measure of restoring the ‘zero excise duty route’ for clothing industry will not just revive the industry but will also create huge job opportunities. Other measures like setting up of Apparel Parks and continuation of TUFS will further strengthen the sector.”
