Ministry promises aid

Amid brouhaha over high power costs and a lackadaisical attitude towards labour reforms, the textile ministry said it would take all possible measures required to support the domestic textile industry.

Union Minister for Textiles Shankersinh Vaghela said, "Whatever support is required, we are ready to provide the textile industry with that."

He was speaking at the annual exports award function of the Cotton Textiles Export Promotion Council. He gave textile players the assurance that various schemes for the industry, mainly the Technology Upgradation Fund that is going to end by March 2007, would be extended.

"There is every possibility that the scheme will be extended by two-three years," he said. Textile players have been clamouring for better infrastructure and reforms in the labour laws.

"Power cost in the country is quite high. It needs to be reduced," said Raman Chopra, senior vice-president (textiles) of a Noida-based firm GHCL.

At present, the power cost in the textile sector is around Rs 4.60 a unit (10 $ cents). A study done by Swiss firm Gherzil Textile Organisation (GTO) has recommended that the cost should be brought down in the range of 6-7 $ cents a unit.

GTO has also touched the competition angle. Udo Hartmann, its director, said, "Competition in the textile sector among China, India, Pakistan and Indonesia is going to intensify further in the next two years. The government should provide power at competitive rates to domestic textile firms from the grid. Industry too needs to invest in captive power generation system with low-cost coal as fuel base."

But Vaghela said the industry did not need to worry about the competition from China. "In the next five years, there will be no power problem in the industry," he said.

The minister, however, made it clear that he was talking only about the availability of power and not on the cost front.

Commenting on the labour laws issue, Vaghela said if there was any opportunity, the ministry would take up the matter with the government.

According to GTO, China is not being able to maintain its raw material cost advantage. India, on the other hand, has regained its cotton cost advantage during 2006. But this is neutralised by high cost of power and low labour outputs.

Textile exports in 2005-06 jumped 22 per cent, y-o-y, to touch $17 billion. In 2006-07, the exports are expected to reach $20 billion.

In its 2010 vision, the over $40 billion domestic textile industry has targeted to more than double its revenues to $85 billion. And of this, exports will be more than half at $50 billion.