India has unveiled a special package for the domestic apparel sector. The aim is to encourage the domestic apparel sector to compete with multinational brands. Additional incentives will be provided under the Amended Technology Upgradation Fund. Section 80JJAA of the Income Tax Act will be relaxed. Fixed term employment will be introduced for the apparel sector. State and central taxes/levies embedded in manufacturing will be rebated.

India’s traditional textile and synthetic materials cater to different domestic market segments. Traditional textiles and fabrics are primarily cotton-focused and cater to niche markets. In India, import of synthetic fabric is approximately 30 per cent of domestic production of traditional textiles. The share of imported apparel with respect to the domestic apparel market in India is nearly 1.4 per cent.

There have been challenges for the export sector over a period of time and one big challenge is credit. There has been a sharp decline in credit to the export sector. To reduce transaction costs for exporters, there may be multi-modal transport, which will help enhance efficiency in the logistics sector. Each logistics company will be rated by a regulatory organisation, which will be created by the industry. A e-wallet mechanism may be introduced to effectively address the woes of exporters who have been complaining of delays in refund of taxes under the GST regime.