Textile industry draws up revival plan

A SWOT analysis in a background paper prepared for the upcoming two-day Textile Summit 2007 in New Delhi next week has focused on many problems plaguing the country's textile industry.

The paper highlights the problems of the industry, characterised by obsolete technology, a low level of efficiency and highly fragmented production capacities.

It also throws light on poor work practices, rigid labour policies, high transaction and power costs and an over-emphasis on cotton and synthetics.

The threats continue to be the rupee appreciation in the last few months, trade blocs and partnerships excluding India, locational disadvantage, resulting in long periods of transit to key markets, pricing pressures and enhanced competition from countries constrained by quotas similar to those of India.

As regards strengths and opportunities, the paper lists a strong cotton base and a growing domestic market, together with a flexibility of production and presence of integrated companies. However, these opportunities have not been used to the advantage of the industry, says the report.

The paper has also outlined an action plan to revive the industry, focusing on 12 aspects of the industry to overcome the current shortcomings.

The action plan includes emulation of the China's model of cheap, hard-working and low-skilled workers to compete better in the world markets, a planned policy for closure of non-competitive mills, a relook at the existing labour laws and creation of a Rs 25,000 crore investment corpus for seed capital.

According to the paper, the initial funding will assist in capital formation and help the textile sector become a $50 billion industry.