Textile Sector Hails India Budget For MSME & Employment Boost

The Indian textile industry organizations have given a positive response to the 2024-25 India Budget, which was introduced by Finance Minister Nirmala Sitharaman, after conducting a thorough analysis. These groups have commended the overall measures targeting micro, small, and medium enterprises (MSMEs) and employment generation. While the minister did not directly respond to the textile industry's specific requests, the organizations praised the suggestions that could boost job growth, enhance workforce training, and provide accessible funding for MSMEs.

Dr. S K Sundararaman, chairman, The Southern India Mills’ Association (SIMA), commented, “The Government has been giving major thrust for strengthening the MSME segments. The pathbreaking initiatives taken for the MSMEs are significant relaxation in the eligibility criteria for MSME by increasing the asset value of ₹50 crore (~$5.97 million) and annual sales turnover of ₹250 crore (~$29.87 million) and the said measures have enabled more than 80 per cent of the textile manufacturing units in the country to get qualified under MSME category.”

He said that the labor-intensive textile industry would benefit from the various announcements regarding employment, skilling, and MSMEs, which were the key themes of the Budget. He appreciated the introduction of the Credit Guarantee Scheme for MSMEs, which allows for term loans to buy machinery and equipment up to ₹100 crore (~$1.19 million) without needing collateral or third-party guarantee. Furthermore, he found value in the system that enables banks to keep providing credit to MSMEs in times of financial difficulty, helping them avoid becoming non-performing assets.

The decrease from 7.5% to 5% in the basic customs duty (BCD) on Methylene Diphenyl Diisocyanate (MDI), which is utilized in producing spandex yarn, was also appreciated by the SIMA chairman. This measure aims to tackle duty inversion and improve the worldwide competitiveness of textile producers utilizing said yarn. He observed the rapid rise in spandex yarn usage and wished for local manufacturers to share the advantage with other industries.