Quality key to textile exports, says minister

The phasing out of the quota system under the World Trade Organization (WTO) in December 2004 is ideal opportunity for the Indian textile industry if only manufacturers can maintain quality, diversify their products and develop efficient marketing systems, said Shankersinh Vaghela, union minister of textile.

A recent WTO report revealed China would benefit more from the upcoming change in the global trade system.

The minister denied this, saying, "Chinese dumping is not a threat. They are also facing several important problems pertaining to power, labour and quality. With inferior quality, they cannot sustain this in the long run".

He said the government would be providing small players with loans from banks under the technology upgradation fund (TUF).

"Small manufacturers are going for funds from other sources despite subsidy being available under TUF because of procedural constraints. The ministry will help small units as guarantor so that financial institutions provide loans", he added.

He urged private players to get into joint ventures (JVs) for upgrading and expansion of existing mills.

"The government welcomes private players to get the best out of the present scenario", he added.

Potential investment in the textile sector is around Rs 60, 000 crore, of which Rs 25,000 crore would come from the government and the rest from private manufacturers.

The government has sanctioned around Rs 5000 crore and would be investing the rest within a couple of years, the minister promised.

Vaghela urged private players to set up captive power plants (CPP) to reduce costs.

"The ministry will support private players seeking permission in setting up CPPs. Power being a state affair, it is difficult for the Centre to interfere. Private players may seek gas from Centre for CPPs", he said.