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Govt Boosts Textiles Sector Amid Iran War Supply Chain Disruptions

The government is taking special steps to support the textiles sector amid disruptions from the Iran war and Strait of Hormuz closure. Natural gas supply to textiles and handicrafts is maintained at 80% of average consumption, with GAIL sourcing from spot markets if needed. Customs duty has been deferred on 29 key inputs, and anti-dumping duty removal is suggested for EFY and VFY. Weekly stakeholder meetings and RELIEF scheme outreach are being conducted to monitor and mitigate supply chain issues.

Key Points: Textiles Sector Support Amid Iran War Disruptions

  • 80% natural gas supply maintained for textiles amid Strait of Hormuz closure
  • Customs duty deferred on 29 key textile inputs
  • Anti-dumping duty removal suggested for EFY and VFY
  • Weekly stakeholder meetings and RELIEF scheme outreach underway
3 min read

Govt taking special steps to support textiles sector amid Iran war disruptions

Govt maintains 80% natural gas supply, defers customs duty on 29 inputs, and removes anti-dumping duties to support textiles sector amid Iran war disruptions.

"The supply of natural gas to the textiles and handicrafts sector is being maintained at 80 per cent of the past six months' average consumption - Ministry of Textiles"

New Delhi, April 28

The supply of natural gas to the textiles and handicrafts sector is being maintained at 80 per cent of the past six months' average consumption, despite the disruptions in imports due to the closure of the Strait of Hormuz, since it has been categorised as a priority industry, the Ministry of Textiles said on Tuesday.

In case of supply disruptions, public sector gas utility GAIL is intermittently sourcing supplies from the spot market to meet domestic demand, the ministry said in a statement.

The ministry said it is monitoring the supply in the clusters. In case of any shortfall, the monitoring cell would take up the issue with GAIL authorities for spot market purchases.

The government has listed textiles and handicrafts in the priority segment due to the large number of people employed in the sector.

Customs duty has also been deferred on 29 key textile inputs in order to provide support at a time when supply chains are being disrupted due to geopolitical factors such as the Middle East conflict. The Textiles Ministry is also pursuing the removal of customs duty for other inputs, including the MMF value chain and cotton, the statement said.

In light of the price volatility and the need to ensure supply chain continuity for the downstream industry, the ministry has been advocating the removal of customs duty on inputs in the textiles and handicraft sector, the statement explained.

Some of the downstream producers have also indicated that the anti-dumping duty on some of their inputs would adversely affect their sourcing in light of the volatile prices. After undertaking an internal analysis taking into account the employment generated in the downstream sector, MSME participation in the downstream sector, supply chain disruptions, etc., the Ministry of Textiles has also suggested to the Department of Revenue for the removal/deferment of anti-dumping duty on elastomeric filament yarn (EFY), and viscose rayon filament yarn (VFY).

The ministry is also holding periodic meetings with stakeholders on a weekly basis for monitoring the situation. These include meetings with the Export Promotion Councils (EPCs), domestic associations, regional cluster associations (Tirupur, Surat, Pali Balotra), and state government officials. Besides, the ministry organised an outreach programme on the Resilience & Logistics Intervention for Export Facilitation (RELIEF) Scheme of the Department of Commerce.

Moreover, the EPCs also organised their independent consultations. The Carpet Export Promotion Council (CEPC) organised a webinar on April 6 on the RELIEF Measures. The Export Promotion Council for Handicrafts (EPCH) organised an awareness seminar on April 20 on logistics challenges in the wake of the West Asia crisis. The discussions centred around global shipping disruptions, alternative routing, logistics planning, cost optimisation techniques and compliance issues.

The advisories issued by DG Shipping are being circulated among the stakeholders. Some of the issues related to shipping lines, such as the use of alternate ports like Jeddah for supplies to West Asia, are also being disseminated to stakeholders.

- IANS

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Reader Comments

A
Amanda J
It's good that India is prioritizing employment-heavy sectors like textiles. The deferred customs duty on 29 inputs is a smart short-term move. But we need long-term plans to reduce reliance on volatile Middle East supplies.
K
Karan T
Ek baat samajh nahi aati - why only 80%? If it's a priority sector, give them 100%! Tirupur exporters are already facing huge losses due to shipping delays. Deferring duty is good but logistics is the real pain point right now. šŸ˜
R
Rajesh Q
Bhagwan ka shukar hai ki at least kuch step utha rahe hain. Pichle mahine Pali-Balotra cluster mein kaafi units band ho gayi thi gas shortage ki wajah se. Ab weekly monitoring meetings achhi cheez hai - stakeholders ko langsung sunna chahiye.
S
Sneha F
Good that they're considering removal of anti-dumping duty on elastomeric yarn. This will help our small manufacturers. But I'm concerned about the delay - by the time these measures take effect, many units might shut down. Need faster implementation!
V
Vinay O
Appreciate the RELIEF scheme outreach, but why not have a single window clearance for all these issues? Carpet exporters in Bhadohi are confused about which authority to approach. DG Shipping advisories are good but ground level implementation is weak. šŸ˜¤

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