Textile exports to US, European Union show healthy rise

India's textile and clothing exports to the US and the member states of the European Union, which together account for about two-thirds of India's total textiles and clothing exports, have recorded a growth of 8 per cent and 14 per cent respectively in the year 2006 over 2005, as per World Trade Atlas data.

According to provisional data, India's textiles and clothing exports during 2006-07 were of the value of $18,729.93 million, as against exports valued at $17,520.07 million during 2005-06, registering a growth of 6.91 per cent.

The minister of state for textiles E V K S Elangovan, informed the Lok Sabha today, in a written reply that the government has been taking a number of steps to boost textiles and garment production and exports.

He said some of the initiatives taken in this regard were:
i) 100 per cent foreign direct investment in the textiles sector under the automatic route.
ii) De-reservation of readymade garments, hosiery and knitwear from the SSI sector
iii) Modernisation and upgradation of the sector through the 'technology upgradation fund scheme' (TUFS), which had been operational from 1 April, 1999
iv) Formulating a new scheme for integrated textile parks by merging the scheme for apparel parks for exports and the textiles centre infrastructure development scheme, in order to expand the production base of the textiles and garment sector
v) Rationalising the fiscal duty structure to achieve growth and maximum value addition within the country. Except for the mandatory excise duty on man-made filament yarns and man-made staple fibres, the whole value addition chain has been given the option of excise exemption
vi) The import of specified textiles and garment machinery has been allowed at a concessional rate of customs duty to encourage investment and to make our textiles product competitive in the global market. The cost of machinery has also been reduced through fiscal policy measures
vii) Duty-free import of 21 items of trimmings and embellishment items is allowed to garment exporters. This can be upto 3 per cent of their actual export performance during the previous year
viii) For the speedy modernisation of the textiles processing sector, the government has introduced, from 20 April, 2005, a credit-linked capital subsidy scheme at the rate of 10 per cent under TUFS, in addition to the existing 5 per cent interest reimbursement.
ix) Skills development through National Institute for Fashion Technology (NIFT) and the Apparel Training & Design Centres (ATDCs), which are running various courses / programmes at various locations in the in the country to meet the skilled manpower requirement of the textiles industry, especially apparel, in the field of design, merchandising and marketing
x) Facilities like eco-testing laboratories have been created to enable exporters to get garments / textiles pre-tested so that they conform to the requirements of the importing countries.

In response to another question the minister informed the Lok Sabha that the government was aware of the problems being faced by the garment exports in the wake of appreciation of the rupee.

According to reports from export promotion councils, garment exports and the textile industry had been adversely affected due to appreciation of rupee, he said.

Elangovan stated that during the eight years of operation of technology upgradation fund scheme (TUFS), differential level of benefits had been observed in different segments, with upgradation in certain segments like spinning and composites having benefited as desired, leaving the government scope to focus on segments like processing, garments etc.

The scheme incorporates rationalisation in technical and financial norms, which are expected to:
i) Induce capital investment in the textile sector to achieve growth parameters for fibre, yarn, fabric and garment production chain

ii) Help the textile sector capitalise on the vibrant and expanding global and domestic markets through technology upgradation resulting in cost effectiveness, quality production, efficiency and global competitiveness in line with the goals enumerated in the 'vision statement' for the textile industry (2007-2012);

iii) Generate 16 per cent annual growth and create additional capacity building in all the segments of the textile sector; and

iv) Propel investment in the sector to the tune of Rs150,600 crore.