Textiles FDI from China 'not acceptable'

Union textile minister Shankarsinh Vaghela has categorically stated that India is not keen on FDI in the textile sector from arch rival China.

"This is so even as the level of FDI in the sector is not up to the mark," Vaghela said.

The minister said that if India accepts the FDI from its biggest competitor, China will influence policy decisions in the sector.

"We are in talks with countries such as the US and Turkey for FDI. Both have shown keen interest in investing here," Vaghela said.

According to the textile ministry, India needs investment of over Rs 40,000 crore per annum for the next five years to enable the Indian textile industry successfully compete with China.

The country has also set an export target of $50 million by 2010.

Industry experts feel that over the next three years, the textile industry will require about $30 billion. However, the actual investments, over the last two years, have been in the range of only $4 billion.

Meanwhile, the industry is gearing up to the news that the world's largest retailer Wal-Mart, is shifting its sourcing base from China to India. The special economic zone (SEZ) policy and the National Foreign Trade Policy (NFTP) announced by the Centre is expected to speed up investments in the sector.

"The National Textile Policy 2000 envisions the garment export sector at $50 billion by the year 2010. It hopes to provide cheap investment sources through the Textile Upgradation Fund, increase cotton productivity by over 50 per cent, encourage setting up of world-class textile processing and garment units and dereserve the garment industry, which has so far been limited to the small-scale sector," said Vaghela.

Despite the poor investments, he was optimistic about the future. "Several new textile units are coming up. And a number of foreign textile companies are making investments in India. So we believe the investment targets would be achieved from next year onwards," he said.

He was happy with the performance of the industry too. "The performance of the textile industry was quite good in the last one year. In fact, Textile Ministry was the seventh best performer among all the ministries. We have announced several duty cuts and concessions for the industry. These have boosted the exports of textiles and garments during the year. But I believe the performance could have been much better."

Talking about the handicrafts sector, the textile minister said, "We are trying to initiate measures for giving a push to the handicrafts industry. We want to create a proper platform, a proper stage for the industry, so that it will be in a position to improve its performance on the export front."

Expressing concern over the slow progress in apparel park projects, Vaghela said, "The issue of apparel parks was highly politicised by the previous government. We are trying to sort out the matter. Our aim is to develop 25 apparel parks across the country, out of which, only one (in Tirupur) has been completed so far. We expect five more apparel parks to be completed by the end of 2005 or early 2006."

Vaghela said, "We have announced various measures for the textile industry in the last one year, but it would be some time, before we announce any new schemes or incentives for the industry."