Better atmosphere for Textiles to be created

Mumbai, Sept 19: Union Minister for Textiles, Shankersingh Wagela today said that the Government is making concerted efforts to improve the capacity, productivity and investment in the textile sector, so that it becomes the backnone of the Indian economy.

''The Government is committed to create an enabling and conducive atmoshere for the Indian textile industry to modernize and expand capacities. The various policies and procedures have been streamlined and made more export- friendly to enable them to compete more effectively in the international markets,'' Mr Vaghela said on the occasion of The Cotton Textiles Export Promotion Council's (TEXPROCIL) 52nd annual Export Awards function held here.

Mr Vaghela expressed confidence that the textile industry would continue to grow and play a vital role in creating more employment, enhance per capita income of the large workforce employed in the textile and allied industries, thereby ensuring egalitarian and efficient allocaiton of economic resources. There has been an upsurge of investment in texile sector. There has been an increase in investments in the textile sector during the last two-three years and the investment in the current is estimated to reach USD six billion. The industry is aiming for investments of USD 31 billion by 2010, thereby doubling India's share of the global trade.

''The textile exports are on the path of higher growth. In the first year of quota regime of 2005-06, the textile exports have recorded a robust growth of 22 per cent and have touched a new milestone of USD 17 billion. India's growth in textile exports is led by the ready-made garments and cotton textile segments which together account for nearly 70 per cent of India's textile export basket. The cotton textile exports during the first year of quota free regime such as year 2005-06 have registered a robust growth of about 27 per cent.

''The growth in home textile articles is particularly significant as it represents the highest end of textile value chain. It is indeed heartening to note that the exporters are leveraging India's natural advantages in 'cottons' to garner a greater share of the global textile trade,'' Mr Vaghela said.

Texprocil's Chairman, Mr B K Patodia said, '' I would be failing in my duty if I do not highlight some of the key policy initiatives that need urgent attention of the Government, if we have to sustain the momentum of our exports.

As the study undertaken by Gherzi Textile Orgainization would reveal, we continue to suffer sizeable cost disadvantages, on account of power and wage costs.There is an urgent need to address these issues. Apart from this, there is also a need to reduce the transaction costs, as it is impacting our competitiveness. In fact, the recent report published on ''Doing Business'' by the International Finance Corporation (IFC), the private sector arm of the World Bank, ranks India 134 out of 175 countries surveyed in terms of ''ease'' of doing business. Its quite clear from this and many other studies that dwelling time at ports, customs, banking, along with licensing procedures should be minimized to reduce costs.

He urged the Textile Minister to announce extension of Technology Upgradation Fund Scheme (TUFS) up to 2012 to co-terminus with the 11th five year plan. Secondly he strongly suggested that imports of all textile machinery should be permitted''duty free'' in line with the practice being followed by all our competitors including Pakistan, Bangladesh, China and Indonesia amongst others. At the same time, we need to encourage indigenous textile machinery manufacturers to expand their capacity by enabling them to bring down their cost of investment. In order to do this, I would suggest that Excise Duty on textile machinery, which is 16 per cent should be reduced to eight per cent. In fact, with the additon of Sales Tax and Octroi, the cumulative incidence of duties works out in excess of 25 per cent, which acts as a deterrent for large-scale investments. We need to take appropriate steps to encourage investments in machinery manufacturing in India to match with the rising demand for fabrics, home textiles and clothing in the coming years.

UNI