NITMA demnds procedural controls on cotton exports

New Delhi, Sept 29 (UNI) The Northern India Textile Mills 'Association (NITMA) today urged the Government to put procedural controls on export of basic raw material cotton from the country and encourage export of value-added textile products instead which will help in generating wealth and employment within the country.

Mr K K Aggarwal, Chairman, NITMA, stated that ''currently, we are exporting one-third of our cotton crop to China and Pakistan, the toughest competitors for our cotton textile products in the international markets. Ironically, China is the largest exporter of textile products to India andPakistan is among the largest, especially in home textiles. When we export cotton to them, we are exporting textile jobs and when we are importing textiles from them, we are importing unemployment. Pakistan, China and even USA have procedural controls on cotton exports to safeguard their textile industry.'' ''The textile mills in Northern India exported products worth around three billion dollars during the year 2007-08, out of country's total export of 20.5 billion dollars which was almost 20 per cent short of the set target of 25 billion dollars. This year the situation is likely to further deteriorate as demand from the US which is the largest importer of textile products from India is likely to further go down in the second half of the current fiscal year as it was down by 3.24 per cent in the first half,'' said Mr Ashish Bagrodia, Vice Chairman, NITMA.

NITMA President Sushil Jain mentioned that most of the North Indian textile mills situatedin Ludhiana, Chandigar, Haryana, Himachal Pradesh, western Uttar Pradesh, Rajasthan and Gujarat are battling higher costs of fuel and raw materials such a cotton and cotton yarn, increased wage bills as inflation surged to 16-year-high, shortage of skilled labour and above all the announcement of Union Government to increase the minimum support price (MSP) for medium staple cotton by almost 47 per cent as compared to last year.

The government has also withdrawn a subsidy of two per cent of interest on export credit and slashed duty drawback rates for cotton knitted garments from 11 per cent to eight per cent. Duty drawbacks enable exporters to obtain a refund of customs duty. The textile sector is likely to miss the set export target of 31.17 billion dollars for the current financial year as the industry has already cut down its production by 25 per cent, Mr Jain added.

The positive gains expected from the sharp depreciation of rupee against the greenback by the textile industry in North India have been offset by the slowdown in the crisis-ridden US economy, higher raw material costs, uncontrolled cotton exports, long power cuts and increased competition from countries like Vietnam and Bangladesh.

As most of the North Indian textile mills have suffered losses in this year's first quarter or have made substantially lower profits compared to earlier years in North India already running into losses will be further reeling under the pressure of increasing input costs and raw material prices on the one hand, and stagnating or declining price realisation for finished goods on the other, Mr Aggarwal added.

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