Date:04/07/2005 URL: http://www.thehindu.com/2005/07/04/stories/2005070408131400.htm

Business

Industry seeks priority for synthetic textiles sector

Special Correspondent

A comprehensive package will help the industry to generate almost 15 million jobs The PHD chamber said India's comparative advantage is higher than China and South-East Asia in both textiles and clothing

Sub sector-specific-target approach suggested
Country can get larger share of textile, garment market

Present exports cotton-dominated

NEW DELHI: Industry has urged the Government to put the growth of the synthetic yarns and fibres sector on a high priority as the textile industry is gearing up to meet fresh challenges in the post-Multi Fibre Arrangement (MFA) regime.

The PHD chamber has made a representation to Prime Minister Manmohan Singh suggesting that a sub sector-specific target approach could enable India to increase its share in world textiles and garment exports to 8 per cent by 2010 from the present 3.9 per cent to become a $50 billion sector.

The chamber has argued that the inherent cost and operational advantages would help India pocket a larger share of the world textile and garment export market which is projected to grow to about $655 billions by 2010 from the present $400 billions. The chamber said India's comparative advantage was higher than China and South-East Asia in both textiles and clothing.

In the representation, the chamber said India and China were at present the only two significantly large countries competing across both cotton and man-made fibre (MMF) value chains with fabric to garments presence and full package capabilities.

A comprehensive package needs to be evolved to enable the Indian textile industry to generate an additional employment of almost 15 million.

Raising the areas of concern for the synthetic yarns and fibres industry in India, the chamber said the country's present exports are cotton-dominated, although there was a higher global demand for polyester products. It said that though the 2005-06 budget reduced the excise duty on polyester filament yarn from 24 per cent to 16 per cent, it is necessary to go in for fiscal rationalisation to eventually place both cotton and polyester on the same footing.

The industry chamber conceded that the Government had taken the initiative by reducing the peak rate of customs duty by 5 per cent across the board from 20 per cent to 15 per cent.

At the same time, it said glaring distortions still remained between man-made and polyester and acrylic fibres as the former had to pay no customs duty as against 10 per cent in the case of the latter.