| The country's textiles exports are set to fall short by over 16 per cent from the target for the financial year.
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| Rupee appreciation and a slowdown in investments are taking a toll on exports, say industry sources.
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According to the industry estimates, the value of textile exports will be between $20 billion and $21 billion, against the target of $25 billion. This is just around 4 per cent more than the previous year's exports of $ 19.7 billion. In 2005-06, textile exports stood at $ 17 billion.
| SHOWING OF TEXTILE EXPORTS BY INDIA | | Year |
Exports
(in crore) | | 2003-04 | 60,436.16 | | 2004-05 | 61,730.39 | | 2005-06 | 71,856.86 | | 2006-07 | 77,031.10 | | 2007-08* | 81,500.00 | | *New estimate against earlier estimation of $ 25 billion (Rs 99,500 crore, taking $ = Rs 39.8) |
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"The textiles exports will not exceed $ 20.5 billion this year. It is the first time in several decades that textiles and clothing industry is witnessing a negative growth in exports, especially in segments like garments, which accounts for half the country's textile exports," said Shekhar Agarwal, chairman, Confederation of Indian Textile Industry.
| INVESTMENT UNDER TUFS | | Year |
Sanctioned
project cost
(in crore) | | 2003-04 | 3,289.00 | | 2004-05 | 7,349.00 | | 2005-06 | 15,032.00 | | 2006-07 | 35,651.00 | | 2007-08** |
Nil | | **Apr-Sep, 2007 |
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| Industry players also expressed concern over the Technology and Upgradation Fund Scheme (TUFS) being kept in abeyance despite the fact that half the financial year was over. This is not only affecting the investment plans of the textile and clothing units but also creating trouble for the textile machinery sector.
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| In 2006-07, the cost of projects sanctioned under TUFS was around Rs 35,651 crore. In the April-September period last year, the cost of projects sanctioned under TUFS stood at Rs 9,335 crore.
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| Agreeing that the year has been bad as far as new investments in the industry is concerned, Textile Commissioner JN Singh said, "It is an interesting and difficult phase for the textile industry, which is facing challenges and newer opportunities. Rupee appreciation may continue and the industry will have to learn to live with it."
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| Given the scenario, doubts are also being raised over the investment of Rs 1,94,000 crore projected in the 11th Five Year plan (2007-12). "It seems difficult now," said Agarwal.
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| He said in the rest of the financial year, there would be a slowdown in investment. "We may end up losing around 6 lakh jobs by March next year as reports suggest closing down of a number of garment units," he said.
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| In this situation, the textiles secretary has convened a meeting on Thursday with the textile players to discuss ways to combat the crisis. The industry has already demanded a refund of state and local taxes, which account for 5-7 per cent of the export value .
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| At a time the country is expected to export around 20 per cent more raw cotton, industry sources expressed apprehension that the Indian textile industry was going in reverse gear, going back to days when India was considered only a source of raw material. |
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