The Indian textiles and clothing industry, the second-largest employment provider after agriculture, predominantly consists of MSMEs and employs around 11 crore people. The NDA government, under Prime Minister Narendra Modi, has significantly supported MSMEs by relaxing eligibility criteria, which now include asset values up to Rs 50 crores and annual turnovers up to Rs 250 crores. This has allowed over 80 per cent of textile manufacturing units to qualify as MSMEs, benefiting them during and post-lockdown periods.
SK Sundararaman, Chairman of the Southern India Mills’ Association (SIMA), praised the Union Budget's focus on employment, skilling, and MSMEs. He highlighted the Credit Guarantee Scheme for MSMEs, which offers term loans for machinery purchases up to Rs 100 crores without collateral. He also welcomed the mechanism for maintaining bank credit during stressed periods to prevent MSMEs from becoming NPAs.
The reduction of BCD on Methylene diphenyl diisocyanate (MDI) from 7.5 per cent to 5 per cent is expected to enhance the competitiveness of spandex yarn manufacturers. Increased allocations for export schemes RoDTEP and RoSCTL by 5.8 per cent and 10 per cent respectively will support the struggling textile export sector.
Sundararaman also lauded the Employment Linked Incentive Scheme and infrastructure improvements like roads, ports, and airports, which will reduce logistics costs. Additionally, the increase in Mudra loan limits from Rs 10 lakhs to Rs 20 lakhs will benefit small traders and weavers. The establishment of 12 industrial parks and initiatives for energy security, R&D, and skill development, PLI, PR-MITRA, NTTM will further bolster the textile industry.
