India aims to boost its textile and garments industry in next month’s budget with financial support, tariff cuts on key inputs and incentives to produce locally, two government sources said. An ongoing political crisis in neighbouring Bangladesh, has prompted global retailers to explore alternatives, including India, for garment imports, exporters told Reuters. ‘Indian exporters are finding it difficult to meet the rush of export orders in last few months as many US companies are looking for alternative suppliers,’ said Mithileshwar Thakur, secretary general at India’s Apparel Export Promotion Council. India’s textile sector employs an estimated 45 million people and the government is considering increasing the textile ministry’s budget allocation for 2025/26 by 10-15 percent, from the current 44.17 billion rupees ($511 million), said a government source privy to discussions. The government may also raise the allocation for production-linked incentives for the textile sector to around 600 million rupees from 450 million rupees for the current fiscal year, the source said. Under this scheme, the government offers tax incentives and other concessions to companies choosing to manufacture locally. Tariff cuts on raw materials such as polyester and viscose staple fibre, along with textile machinery, are also under consideration, a second government source said. Import tariffs are currently in the range of 11-27 percent on fibre, compared to almost nil duties in Bangladesh, impacting Indian garment exporters. Shahidullah Azim, a Dhaka-based factory owner whose clients include North American and European retailers, told Reuters that some American buyers have shifted their orders to India and Vietnam, due to ongoing crisis in Bangladesh. In the first eight months of the fiscal year through November, India’s textile and garment exports rose by more than 7 percent year-on-year to over $23 billion, compared to just 2 percent growth in total goods exports.

India to Promote Its Textiles as Political Crisis Hits Bangladesh’s Exports, Say Sources

India is set to boost its textile and garments industry in the upcoming budget, offering financial support, tariff cuts on key inputs, and incentives for local production. The ongoing political crisis in neighboring Bangladesh has prompted global retailers to seek alternatives, with Indian exporters experiencing a surge in export orders from the US and Europe.