Infrastructure hits textile sector growth

Greater investment needed to boost production

India is becoming costlier than its neighbours and this is taking away its competitive edge. This view emerged at a seminar on 'Strategies and Preparedness for Trade and Globalisation in India' conducted by the Textiles Committee of the textiles ministry along with UNCTAD India.

Under the European Union's Generalised System of Preferences (GPS), India's neighbours Sri Lanka and Bangladesh enjoy zero import duty for their exports to EU. The Indian textile sector does not enjoy this benefit but apparel exports continue to benefit from this. India has to face a 9.6 per cent import tariff and contributes 21.5 per cent of EU's textile imports.

The post quota period (January-July, 2005) saw Chinese exports gain the most. They grew by 110 per cent compared to last year, while India's grew by 35 per cent, Sri Lanka 14 per cent, Pakistan 12 per cent and Bangladesh 26 per cent.

The growth in India's fabric sector is just 1 per cent compared to China's 47 per cent and Pakistan's 12 per cent. The only remarkable thing for India has been its yarn exports growing by 300 per cent.

Speaking at the seminar, Rajendra Hinduja, executive director, Gokaldas Exports said that out of the $13 billion worth of textiles exports, apparel constitutes 50 per cent but the "various lobbies in the industry are moving in cross-directions."

Stressing the need for greater investment, Hinduja said that today Bangladesh equals India in apparel exports. The apparel industry which is less capital intensive can employ 12 million work force. At present, this sector employs 7 million people with 4 million directly employed in the industry.

Elaborating on the need for greater exports he said, "If we export 1 kg of cotton, we get $1.20 but if we export 1 Kg of cotton apparel we get $12."

Dismissing the projection of the textile ministry that India will increase its exports to $50 billion by 2010 he said that "it can be $30-35 billion."

For this the industry requires an investment Rs 50,000 crore which means every major player has to double his capacities. He suggested that government usher in FDI in this sector to achieve this target.

The various infrastructure bottlenecks like poor road and ports and high cost of power has impaired the growth of the industry.

Sandeep Dave, commissioner for textile development, government of Karnataka, said that Karnataka lacks in organised fabric manufacturers.

The 90,000 powerlooms in the state are unorganised, use obsolete technology and lack in quality as well as quantity.

He added that there is a mismatch between the demand and supply of cotton in Karnataka. The state produces two types of cotton "" the Jaldhara variety which is 20s count and DCH which is 40s count. But the requirement of the industry is 40s count which has to be bought from Maharashtra.

The government is considering another apparel park in Kanakapura with an aim to convert it into an SEZ. It is also training 200-250 people in tailoring at the Apparel Training and Development Centre (ATDC).

The parks will be managed by the allotted industries with 51 per cent equity under the Special Purpose Vehicle of the centre.