Textile ministry pens 5-point plan to lift exports

Union ministry of textiles has chalked out a five-point plan to boost textile exports and bring substantial investment into the sector in the post-quota regime of the World Trade Organisation (WTO).

"To make the textile sector more efficient and internationally competitive, the ministry has initiated a five-point plan to bring the Indian textile industry at a level playing field. All necessary measures will be taken to secure the leading position for the textile industry of India in the world," said Shankarsinh Vaghela, Union minister of textiles.

At present the blended textiles and pure non-cotton (polyester, viscose, acrylic and nylon) have a different tax regime. There is a mandatory excise duty on man-made staple fibre at 16 per cent, on polyester filament yarn (including textured yarn) at 24 per cent, and on other man-made filament yarn (including textured yarn) at 16 per cent.

The ministry is planning for rationalisation of the duty structure of the man-made fibre for the next five years.

It has planned dereservation of 26 items under the small scale industries (SSI) sector, which include the knitware sector among others.

Considering the textile industry being second largest employment provider after agriculture in India, creating over 12 million jobs, the ministry plans to infuse subsidy schemes to bring the Indian textile sector at the international level playing field.

The ministry plans to enhance its role as a facilitator plans to actively facilitate in of setting over 25 apparel parks and over 25 textile clusters in the country.

"The ministry is promoting cluster development projects and has identified various clusters for the small and unorganised textile manufacturers in line with the clusters in Trichi and Ludhania to face the international challenge," said an senior official at the textile ministry.

The ministry has also planned to make the technology upgradation fund (TUF) scheme more flexiable. It has planned to add three per cent interest subsidy for investments in the processing sector apart from extending the date of closure of the TUF up to March 31, 2007, on the basis of the response of the overall textile industry of the country during the last one year and on the basis of demands of most of the textile associations of the country.

"The scheme was extended keeping in mind the actual needs of the textile industry more particularly of decentralised powerloom sector. The enhanced three per cent interest subsidy for investments in the processing sector will add to the five per cent interest re-imbursement subsidy to make it eight per cent in the processing sector, 12 per cent up-front subsidy for SSI sector and credit-linked capital subsidy up to investment of Rs 60 lakh for SSI powerloom sector are provided by the government, encouraging textile units to go for modernisation," said the official.

The ministry will also co-ordinate with other inter ministerial groups to address issues such as power cost, labour reforms and port infrastructure among others.

According to the ministry, Indian textile exports are set to witness an over 300 per cent increase in the next few years after the dismantle of the quota regime.

At present Indian textile exports are pegged at around Rs 25,000 crore annually and is set to grow to over Rs 75,000 crore in the next few years.