New Delhi: Union Cabinet today approved a Rs 6,000 crore package for the textiles and apparel sector eyeing a three-year target of adding 1 crore jobs, additional exports upto Rs 2 lakh crore and Rs 74,215 crore fresh investment.
The measures approved include additional incentives for duty drawback scheme for garments, flexibility in labour laws to increase productivity as well as tax and production incentives for job creation in garment manufacturing.
The package was given a nod at a meeting of the cabinet presided over by Prime Minister Narendra Modi, citing the fall of India's share in the global textile exports to Bangladesh and Vietnam, yet with the potential to grab the market being ceded by China.
"Over the last few years, apparel manufacturing had shifted to countries like China which had cost advantages. However, China's cost advantage has been neutralised to some extent because of increase in labour wages. We have advantages of economies of scale.
Therefore, it was decided to take steps to give a boost to the sector," Finance Minister Arun Jaitley told reporters.
A unique feature of the scheme will be to disburse the subsidy only after the expected jobs are created.
"The package breaks new ground in moving from input to outcome based incentives by increasing subsidy under Amended-TUFS from 15% to 25% for the garment sector as a boost to employment generation," an official statement said.
The majority of new jobs are likely to go to women since the garment industry employs nearly 70% women workforce.
The textiles and apparel sector already contributes 14 per cent to India's factory output, 4 per cent to its GDP and 13 per cent to exports, as per official data.
It is also among the largest sources of employment in the country with as many as 4.5 crore people engaged in it.
Officials said the new package was mainly aimed at women empowerment since they constitute 70 per cent of the workforce in the garment industry. This apart, the measures are labour-friendly and will create jobs and economies of scale and boost exports, they said.
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