India’s textile and garment exports rose 0.6 per cent in the first half of the current fiscal from a year before. The share of textile and clothing exports in the country’s overall exports has risen to 13.5 per cent this fiscal. At present, man-made fibers like polyester attract a 12 per cent excise duty, but cotton, the competing fiber, attracts none. This duty disparity has distorted the domestic consumption pattern in favor of cotton, which is contrary to the global trend.

The industry has long been complaining that the duty disparity is preventing domestic producers from scaling up operations and, consequently, hurting India’s export competitiveness in man-made textiles. While man-made fibers account for around 70 per cent of the world’s total fiber consumption, they make up for less than 30 per cent of India’s demand.

There are plans to rationalise duties on man-made fibers, simplify labor laws and facilitate more working capital to mills. The excise duty on man-made fibers may be reduced to six per cent from the current 12 per cent. Women may be allowed to work at night, especially in garment factories. The textile and garment sector is the largest job provider after agriculture, employing around 45 million people.