The government will take adequate steps, both in the short as well as in the medium and long term, to provide relief to the textiles industry, union minister of textiles Dayanidhi Maran said today. In addition, he said, the textile ministry will soon initiate consultation process to form a national fibre policy.
Speaking at a function to release a study report titled, `Impact of Economic Slowdown on Textile and Clothing Industry,' Maran said, as part of a short term strategy, the government will strive to rationalise fiscal structure, exempt service tax, reduce interest rates on pre-and post shipment credit, and facilitate faster clearance of arrears of terminal excise duties and central sales tax.
Over the medium term, he said, the government will impart momentum to the implementation of the technology upgradation fund scheme (TUFS), scheme for integrated textiles parks (SITP) and the technology mission on cotton (TMC) in the Eleventh Plan period.
''In the long run, there is a need for improvement in the infrastructure, labour laws must change and industry should have a new business orientation in line with the global trends,'' he said.
He urged the industry to come forward to give their inputs so as to create a single forum representing all stake holders of textiles industry.
Maran said the major markets for Indian textiles and clothing export are the US and the European Union and they are showing signs of recovery. However, there is a need to diversify textile and clothing exports to new markets like the Gulf Cooperation Countries (GCC), comprising Bahrain, Kuwait, Oman, Saudi Arabia, Qatar and UAE as also Africa, Latin America, Russia and Oceania.
The government, he said, will extend a helping hand to the industry to seek opportunities in the new markets, to withstand competition from our neighboring countries, and overcome protectionist measures being adopted by developed countries, the minister said.
The government, he said, will strive to create 10 million employment opportunities in the sector; build world-class, state-of-the-art manufacturing capacities; achieve a dominant global standing in the manufacture and export of textiles and clothing; and equip the textiles industry to withstand the pressure of import penetration and maintain its dominance in the growing domestic market.
The study was conducted by ICRA Management Consulting Services Ltd (iMaCS) on behalf the Confederation of Indian Textiles Industry (CITI), Cotton Textiles Export Promotion Council (TEXPROCIL), Apparel Export Promotion Council (AEPC) and Synthetic and Rayon Textiles Export Promotion Council (SRTEPC).
The study has recommended removal of infrastructure bottlenecks, rationalisation of taxes and flexibility in labour laws for the industry to achieve the high growth rates.
Besides, the study recommends that the government should negotiate better trade terms with major imparting countries; streamline export-import procedures to reduce transaction cost; take immediate steps to clear the backlog of TUFS; formulate a comprehensive fibre policy and reduce interest rates to provide working capital to the industry. The study goads the industry to take immediate steps to explore new markets and reduce dependence on EU 27 and USA as well as take measures for skill up gradation of workforce to ensure availability of skilled manpower to the industry.
Textiles and clothing exports contribute around 12 per cent to India's foreign exchange earnings. Between April 2008 and February 2009, textile and clothing exports from the country have shown a flat growth on account of economic slowdown in major export markets. This has also impacted on the overall growth of the textile industry.