Home » CEPA with UAE, NLP, tech textile projects mark 2022 in India

CEPA with UAE, NLP, tech textile projects mark 2022 in India

Signing of the India-UAE Comprehensive Economic Partnership Agreement, passage of the Energy Conservation (Amendment) Bill, 2022, launch of strategic research projects in technical textiles and the National Logistics Policy (NLP), and an agreement to launch the European Union-India Trade and Technology Council were some of the major developments in India this year, writes Dipesh Satapathy.


Indian Prime Minister Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan in February virtually witnessed the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which reduces tariffs for 80 per cent of goods and offers zero duty access to 90 per cent of India’s exports to the United Arab Emirates. It is expected to boost annual bilateral trade to $100 billion within five years of its adoption from about $60 billion in 2021.

India and the Gulf Cooperation Council (GCC) also decided in November to resume negotiations for an FTA.

President of the European Commission Ursula von der Leyen and Prime Minister Modi agreed in April to launch the EU-India Trade and Technology Council at their meeting in New Delhi. This strategic coordination mechanism will allow both sides to tackle challenges at the nexus of trade, trusted technology and security, and deepen cooperation.

The Reserve Bank of India (RBI) in July put in place an additional arrangement for invoicing, payment, and settlement of exports-imports in Indian rupees to promote global trade and domestic exports and support the global trading community. Authorised dealer banks shall need approval from RBI’s foreign exchange department to avail of this benefit.

In November, India made amendments to the Foreign Trade Policy to allow international trade settlements in Indian rupees (INR). The Directorate General of Foreign Trade had earlier permitted invoicing, payment and settlements exports and imports in INR in sync with a July RBI circular.

The updated provisions for export realisation in INR were notified for imports for exports, export performance for recognition as status holders, exports under advance authorisation and duty-free import authorisation schemes and exports under the Export Promotion Capital Goods scheme.

The lower house of Parliament passed the Energy Conservation (Amendment) Bill, 2022, in August seeking to promote use of non-fossil fuels, including green hydrogen, ethanol and biomass. It is also aimed at helping the country achieve its global commitments related to climate change goals. The upper house approved the bill in December.

India’s Goods and Services Tax (GST) Council at its 48th meeting in December approved allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through e-commerce operators subject to certain conditions. The scheme may be implemented from October 1 next year, it recommended.

The India-Australia Economic Cooperation and Trade Agreement (ECTA) will come into effect from December 29 this year, with Australia set to eliminate duties on 100 per cent tariff lines for India. Bilateral trade is expected to cross $45-50 billion in five years from $31 billion now. The Australian parliament approved the agreement in November.

Odisha state in late November approved seven policies to attract investment. These include the Odisha Apparel and Technical Textiles Policy 2022, which includes incentives like capital investment subsidy, employment cost subsidy and market development initiative; the Industrial Policy Resolution (IPR) 2022; the Odisha Logistics Policy 2022; and the Export Promotion Policy 2022.

RBI in December launched the first pilot for retail digital rupee (e₹-R). It would cover select locations in closed user groups comprising participating customers and merchants. The e₹-R would be in the form of a digital token representing legal tender. It would be issued in the same denominations that paper currency and coins are issued. It would be distributed through intermediaries, i.e., banks.

The country is taking steps towards developing small modular reactors with up to 300 MW capacity to fulfil its commitment to clean energy transition.

Textile & Garments

The textiles ministry in January cleared 20 strategic research projects worth ₹30 crore in specialty fibres and geotextiles under the National Technical Textiles Mission (NTTM). The 16 specialty fibre projects comprise five in healthcare, four in industrial and protective textiles, three in energy storage, three in textile waste recycling and one in agriculture. All four geotextile projects were related to infrastructure.

In September, the ministry cleared 23 such projects worth around ₹60 crore covering specialty fibres, sustainable textiles, geotextiles, mobiltech and sports textiles. In November, it cleared another 20 such projects worth ₹74 crore covering agrotextiles, speciality fibres, smart textiles, activewear textiles, strategic protective gear and sports textiles.

The ministry selected 61 applicants in April under the Production-Linked Incentive (PLI) scheme for textiles, with an expected total investment of ₹19,077 crore and a projected turnover of ₹184,917 crore over a period of five years.

Import duty on cotton was waived off in April till September end. Cotton marketing season in India begins on October 1. Importers had been paying around 11 per cent duty in total before that and the textile industry had been demanding removal of import duty on cotton. The waiver was further extended for a month.

A textile cluster was planned in the Burhanpur-Khandwa region in Madhya Pradesh with units for fabric processing, dyeing, printing, finishing and yarn resizing. The region, known for handlooms, is part of the state’s cotton growing area. The first phase of the proposed cluster is likely to be operational within next year end. It is likely to attract investment worth ₹350-400 crore.

The government in July approved the continuation of the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) with the same rates as notified by the ministry of textiles for exports of apparel and garments and made-ups till March 31, 2024 to boost exports and job creation in the sector. After the introduction of GST in 2017, the Rebate of State Levies (RoSL) scheme was replaced by the new RoSCTL in March 2019.

A textile park will come up at Karnataka’s Khursapur village of Shiggaon taluk in Haveri district. The foundation stone for the park and a garment factory of Texport Industries Pvt Ltd was laid in July.

Tamil Nadu is planning to set up a textile park in Kumaralingapuram village in Virudhunagar district and another in capital Chennai. It will unveil a new integrated textile policy to attract investments. Small textile parks are also being created.

The Cotton Corporation of India and The Cotton Textiles Export Promotion Council of India signed a memorandum of understanding in December on branding, traceability and certification of Indian ‘Kasturi’ cotton. Textiles minister Piyush Goyal also announced the creation of an advisory group on man-made fibre.

The textiles ministry in October released a draft on second round of PLI scheme for the textile sector. The draft states that textile units can produce apparel, home textiles and textile accessories like embellishments, zippers, trimmings, and elastic tapes under the scheme. Participating companies need to complete their investment during the two-year gestation period, i.e., 2022-23 and 2023-24. The required turnover has to be achieved from the subsequent year.

India’s Haryana state cabinet in December approved a new AatmaNirbhar Textile Policy 2022-25 that aims to attract investment worth ₹4,000 crore and generate two lakh jobs. The new policy will supersede the Haryana Textile Policy 2019 and will promote value-added production. The estimated budget for the policy is ₹1,500 crore.


Prime Minister Modi launched the National Logistics Policy (NLP) in September and said the PM Gatishakti National Master Plan will support the policy, which is part of concerted efforts to ensure quick last-mile delivery, end transport-related challenges, save time and cost of manufacturers, prevent wastage of agro-products.

The Unified Logistics Interface Platform (ULIP) will bring all digital services related to the transportation sector into a single portal, freeing the exporters from a host of long and cumbersome processes.  Similarly, a new digital platform—ease of logistics services or E-Logs—has also been started to help industry association report about problems. “From 13-14 per cent logistics cost, we should all aim to bring it to single-digit as soon as possible,” Modi said.

The logistics division of the department for promotion of industry and internal trade in September created a user-interactive dashboard, which will now allow authorised user associations to log in and lodge issues or suggestions for the government to track and resolve in a transparent manner.

In December, the Asian Development Bank (ADB) approved a $250-million policy-based loan to support the Indian government’s reforms that aim to improve and modernise the country’s logistics infrastructure, increase efficiency and reduce costs. The loan will fund the first sub-programme of the Strengthening Multi-modal and Integrated Logistics Ecosystem Programme. This will rationalise India’s high cost of logistics and reduce greenhouse gas emission, ADB said.

Fibre2Fashion News Desk (WE)


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