Date:17/09/2004 URL: http://www.thehindubusinessline.com/2004/09/17/stories/2004091701830500.htm

Back `Textile SMEs can tackle quota challenges'

G. Gurumurthy

Coimbatore , Sept. 16

INTENSE competition arising during the initial phase of the textile quota dismantling may set back Indian textile exporters, the Powerloom Development and Export Promotion Council (PDEXCIL) has said. But the country's small and medium enterprises, whose production lines are flexible enough to take on competition, would be able to adjust to the evolving situation to retain their market share in the global textile trade.

At PDEXCIL's ninth AGM in Mumbai on Thursday, the Council's Chairman, Mr M. Senthil Kumar, said recent measures, including the introduction of the 20 per cent capital subsidy scheme for SSI producers and initiatives on textile weaving parks, would go a long way in helping domestic industries face global challenges. To buttress these steps, financial institutions must be encouraged to deepen their fund deployment to the sector, particularly to small-scale units so as to speed up the modernisation drive.

Mr Kumar said since the bulk of the demand for fabrics came from clothing and made-up sectors, the fabric production line should gear up to meet the requirement of these sectors. He also suggested a change in the textile export trade's direction towards tapping non-quota markets, such as East Europe, West Africa, Latin America and South-East Asia.

The Chairman felt that the decline in cotton textile exports in the 2003-04 fiscal could be attributed to a spurt in raw material prices, namely that of yarn , rise in rupee value and levy of cenvat duty on the textile chain.