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

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.

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