Ludhiana, Aug.19 (ANI): With a strong domestic demand and the stimulus provided by the government, Indian textile and apparel industry is confident that it would grow.
With the Central Government recently offering aid under the Technology Upgradation Fund Scheme, the Indian textile and apparel industry is confident that it will be able to handle market competition and grow, especially in the export sector.
The Indian textile companies are now aggressively upgrading their technology to compete in the global market.
India is the second largest textile economy in the world after China. But the slowdown being witnessed in the U.S. and Europe has also caused an impact on its growth.
In the last eight months, India's five-billion dollar strong textile export sector has witnessed a sharp fall of 33 per cent.
Exporters have been asking for a billion dollar aid for market development and other tax benefits to target newer markets since the U.S. and the European Union countries, which constituted over 60 per cent of the exports, are saturated.
Recently, the government came to their rescue and decided to give 510 million dollars as financial help to domestic textile firms to upgrade their manufacturing units. The aid under the Textile echnology Upgradation Fund Scheme is seen as a stimulus to the sector.
"3,140 crore was allotted to the MoT which was never done earlier. And this was allotted to promote the Textile Upgradation Fund Scheme, which is the most popular scheme in independent India, which has really brought in lot of investment to the tune of 166,000 crores in the textile industry," said Dayanidhi Maran, Union Minister for Textiles recently.
This is for the first time such a large sum of money has been released at one-go under the scheme. The fund has been transferred electronically through more than 121 financial institutions and banks to the accounts of 12,514 beneficiaries.
The government has already disbursed 1.64 billion dollars under the scheme launched in April 1999.
"If we can increase its capacity as well as quality, definitely the foreign buyers will prefer India instead of China. That means scope for investment in textile industry is still there. So, I would not say that in the spinning only, spinning is already in a sufficient capacity in India, but the value added products in garments and accessories. So there is a big scope of further expansion," said jit Lakra, Managing Director, Superfine Knitters Ltd., Ludhiana.
Attracting investment would be government's thrust area to push industry growth rate to 8-10 per cent from the current level of six percent.
To achieve this target the textile ministry plans to attract investments worth over 31 billion dollars over the next five years.
Also, the Indian exporters are looking at newer markets like Latin America, Japan, New Zealand and South Africa. And small-scale apparel and accessories manufacturers and exporters are optimistic about weathering the crisis.
"In the so-called recession period we are doing better than the past years, because we are dealing in fashion accessories. So our items start with 50 cents, 1-2 dollars. So in this recessionary period a woman when she has to change her attire, she would start to change her look with a cheaper item.
She could just change her earrings, she could just change her bangles and she could change her scarf rather than going for a new dress or a new hand bang or new shoes. So, that's why our sales have increased in these periods," said K.S.Kohli, proprietor of Kohli Associates Pvt.Ltd.
Textile sector in India accounts for around 8 per cent of GDP, contributes 14 per cent of the value addition in the manufacturing sector and more than 30 per cent of the export earnings of the country.
It is the single largest employer with an estimated workforce of 35 million.
Shrinking global demand has resulted in job losses in the sector, but the government has promised to create 10 million jobs over the next five years.
The government has also announced the constitution of a 41-member working group to form a national fibre policy, aimed at making India self-sufficient in fibre consumption and export requirements. By Karan Kapoor (ANI)