Government boosts clothing and footwear exports with duty exemptions

New Delhi, July 26 (KNN) In a bid to boost India’s competitiveness in the global apparel and footwear market, Finance Minister Nirmala Sitharaman has announced significant exemptions from import duties on raw materials for these industries.

The decision is expected to make Indian products more price competitive compared to those of large exporters like Bangladesh, Vietnam and China.

The government has introduced tariff cuts on a variety of key raw materials for the apparel and footwear sector. These include methylenediphenyldiisocyanate (MDI) for Spandex yarn, real filler material for winter wear, wet white, crust and finished leather, and accessories and embellishments for apparel and footwear.

Industry experts estimate the layoffs could reduce production costs by 2-4 percent, potentially making India more attractive to global brands like Zara, H&M and Gap.

India currently has a 3.5 percent share of the global apparel trade, with exports worth $16 billion. This figure pales in comparison to Bangladesh’s exports of over $40 billion and China’s impressive $120 billion. The new measures aim to narrow this gap and strengthen India’s position in the global market.

Tiruppur Exporters’ Association, a key player in the Indian textile export industry, has set an ambitious target for the coming year. They are targeting a 10% growth, taking the export value to Rs 40,000 crore. This target is in line with the government’s efforts to stimulate growth in the sector through policy interventions.

Industry leaders are optimistic about these measures, believing they will significantly improve India’s competitiveness. This is especially important as global brands are actively looking for alternatives to traditional manufacturing hubs like China and Bangladesh.

The timing of these exemptions could make India an attractive option for international apparel retailers looking to diversify their supply chains.

To ensure long-term stability for the industry, the government has extended the basic duty exemption on specified goods for export-oriented manufacturers until March 31, 2026.

This expansion opens up broader opportunities for businesses to plan and benefit from these activities.

While some industry experts see this as a significant growth opportunity, others suggest the financial impact may be limited. Nevertheless, there is consensus that the move will bolster India’s reputation as a sourcing destination and improve the ease of doing business for global brands.

As the industry adapts to these changes, the question remains how effectively India will be able to leverage these incentives to strengthen its position in the global apparel and footwear market.

(KNN Office)