The perception of Financial Institutions has changed.
Earlier this industry was considered as NPA and now Financial Institutions are
coming forward to lend credit on competitive terms and conditions.
(c) Textile export
The textile exports had been stagnating in the quota period in the range of
US$10-13 billion. Textile exports recorded growth of 8.7% in 2003-04; and 3.9%
in 2004-05. However, in the first year of quota free regime i.e. in
2005-06, the textile exports increased from a level of US$ 14.02 billion in
2004-05 to US$ 17.08 billion, recording a robust growth of 21.8%. As per the
latest available DGCI&S data, India's textile exports during the period
April - June 2006 have amounted to US$ 4.6 billion recording a growth of 15.6%
in dollar terms and 20.5% in rupee terms over the exports during corresponding
period of the preceding year.
The European Union is the single largest market for India's
textiles products, accounting for 35% of India's total textile exports,
followed by USA which accounts for nearly 27%. Other important countries are
the UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan.
In the year 2005, EU's imports from India have registered a
growth of 18%, despite the fact that there has been a marginal growth of 1.2%
in global import in EU. In value terms, EU imports from India were of the order
of 5.3 billion Euros in the year 2005, and in the first four months of the
current calendar year (Jan- April 2006), EU imports of textiles from India have
already reached 2.24 billion Euros, marking a growth of 23.9%.
US Trade data shows that imports from India have registered a growth of 26% in
2005, the first year of quota free regime. In the current year (Jan.-Aug.
2006), US imports of textiles from India have grown by 12.5% whereas the US
imports from all countries have grown by only 1.9%.
MAJOR INITIATIVES TAKEN BY THE GOVERNMENT TO INCREASE THE COMPETITIVENESS OF
INDIA'S TEXTILE INDUSTRY
(a) Fiscal Reforms:
In the last two Union Budgets, the fiscal duty structure has been rationalized
by doing away with the multiplicity of taxes, reduction in excise and customs
duty, and by providing relief from maintaining excessive records under excise
procedures. Except for mandatory excise duty on man-made filament yarns and
man-made staple fibers, the whole value addition chain has been given an option
of excise duty exemption. For those opting to pay the duty and thereby avail of
duty credit, the applicable rate of excise duty is 4% for cotton textile items
(i.e. yarns, fabrics, garments and made-ups) and 8% in respect of all other
The import of a number of textile machinery items of spinning,
weaving, and processing and readymade garment sectors has been allowed at
concessional customs duty of 5% and 10% as against normal customs duty of
12.5%. The Government has de-reserved the hosiery and knitwear from the SSI
(b) Technology Mission
on Cotton (TMC):
Indian textile industry is predominantly cotton based. Technology Mission on
Cotton (TMC) was launched to make available quality raw material at
competitive price. The progress of TMC has been very satisfactory.
Development of 211 market yards (target 250) and modernization of 777 Ginning
& Pressing factories (target 1000) have been undertaken.
Total investment till date: Rs 1472 crore.
Improvements in productivity: from 302 Kgs per hectare (2002-03) to 468 kgs per
Contamination level has also decreased substantially.
(c) Technology Up
gradation Fund Scheme (TUFS):
The TUFS was launched in February 1997 for a period of 5 years to facilitate
the modernization and up gradation of the textile industry both in the
organized and unorganized sectors. Subsequently the Scheme has been
extended till 2007.
The Scheme aims at boosting investment in high-tech textile
units by providing 5% interest reimbursement on loans. For the processing
sector, 10% capital subsidy is given along with existing 5% interest subsidy
under TUFS. Total investment on account of Technology Up gradation Fund Scheme
(TUFS) (April 1999 - July 2006) has been Rs. 44,686 crore. This Scheme has
benefited textile sector, which is pre-dominantly unorganized, in getting
access for credit at reasonable rates of interest.
(d) Scheme for
Integrated Textile Park (SITP):
As a run up to the quota free regime, two major Schemes namely 'Apparel Parks
for Exports Scheme'- for imparting focussed thrust on setting up of apparel
manufacturing units of international standards at potential growth centres; and
'Textile Centres Infrastructure Development Scheme (TCIDS)'- for modernizing
infrastructure facilities at major textile centres of the country were launched
in the year 2002. Considering the rather lukewarm response to these schemes,
both the Schemes were subsumed into a new scheme namely 'Scheme for Integrated
Textile Park' in the year 2005 and there has been a huge response to the new
Scheme ever since its inception.
The main purpose of introduction of SITP is to provide the
industry with world class infrastructure facilities for setting up their
textile units. This scheme is based on Public Private Partnership model
and envisages engaging of a professional agency for project execution.
The Scheme is being implemented through Special Purpose Vehicles (SPVs) of
Industry Associations/Groups which are the main promoters of the Integrated
Parks. The scheme envisages creation of 25 Parks by 2007-08.
Twenty Six (26) Integrated Textile Parks have been sanctioned -
involving a total project cost of Rs. 2428.23 crore, including Rs. 866 Crore
GOI share. These parks would generate an additional investment of Rs. 13,445
crore, additional annual production of Rs. 19,200 crore and would provide
employment to 5.29 lakh persons (1.93 lakh Direct/3.36 indirect)
Infrastructural Projects :
(i) India Exposition Mart,
With a view to giving a massive fillip to the exporters to
handicrafts, carpets and jute in their efforts of increasing exports, India
Exposition Mart has been set up at Greater Noida with a cost of Rs. 410 crore.
The mart is providing the necessary support to cottage and small scale
handicrafts units/exporters in their marketing efforts.
(ii) Apparel International
Apparel International Mart is coming up at Gurgaon with Government support.
Government has released grant-in-aid amounting to Rs. 63 crores for the
Mart. The Apparel International Mart (AIM) Complex would have an area of
5 acres and 250-300 showrooms also which will be allotted to the exporters.
This will provide a world class facility to the apparel exporters to showcase
their products and will serve as one stop shop for reputed international
buyers. The mart is expected to become functional in next few months.
Textile Plaza, a modern complex with the state-of-the-art facilities aimed to
create a platform for marketing and showcasing of Indian textiles, handlooms
and handicrafts products is being built on the premises of erstwhile Jehangir
Textile Mills, Ahmedabad. This project is estimated to cost Rs. 146 crore and
is expected to encourage exports of these items to overseas markets.
(i) National Institute of
Fashion Technology (NIFT)
NIFT was set up as an Institute of Excellence for imparting Fashion Education
with international benchmarking. Over the years, it has assumed a
leadership role in sensitizing the industry to the concept of value addition
through design up gradation. NIFT Bill was passed by Parliament in
December 2005, through which, the Government has granted NIFT the status of a
"Centre of Excellence", enabling it to confer degrees on its students.
Vallabhhai Patel Institute of Textile Management (SVPITM)
SVPITM was set-up on 24.12.2002 as a National level Institute for Textile
Management at Coimbatore, Tamil Nadu, to prepare the Indian Textile Industry to
face the challenges of the post-MFA era, and enable it to establish itself as a
leader in the global textile trade. In the academic year 2005-06, the Institute
launched the following new long-term programmes:
One year full-time/part-time Post Graduate Diploma in Textile
Marketing and Merchandising (PGDTMM);
One year full-time Post Graduate Diploma in Knitting and Apparel Industry
(iii) Apparel Training and
The ATDCs were set up with Government support to provide facilities for
training the manpower in the garment industry at shop floor level.
Thirteen ATDCs now provide training to 3,000 people, per annum.
(g) Other significant
The first ever "National Jute Policy" was announced on 15th April, 2005 with
the objective of achieving Compounded Annual Growth Rate (CAGR) of 15% per
annum; improving the quality of jute fibre; ensuring value addition through
diversified jute products; ensuring remunerative prices to jute farmers and
enhancing the yield per hectare.
Proposals to implement a Jute Technology Mission at an estimated
cost of Rs. 355.55 crore and to establish a National Jute Board are on the
anvil, and steps have been initiated to set up a of National Institute of
Natural Fibres and a National Jute and Jute Textiles Museum. A Bill titled
"National Jute Board bill, 2006" was introduced in the Lok Sabha in May, 2006
which has been referred to Parliamentary Standing Committee on Labor for
examination. The Committee has conducted field visits for study of the Bill.
The recommendations of the Committee are awaited.
To protect Jute farmers from seasonal uncertainties, the Minimum
Support Price (MSP) for raw jute was increased to Rs. 1000 per quintal in
2006-07, from Rs. 910 per quintal in 2005-06. This has helped to prevent
distress sales by poor farmers/growers of raw jute.
The Pashmina Development Project, under implementation in the
Ladakh Region of Jammu & Kashmir, is providing benefits to 800 families.
A Pashmina De-hairing Plant was set up in 2004 at Leh at an
estimated cost of Rs. 8.25 crore. The plant is running well.
Initiatives in the Handicraft sector include the launching of
the Credit Guarantee Scheme, the setting up of Facility Centres and a round the
year scheme for Gandhi Shilp Haats, wherein everyday a marketing platform is
provided to handicraft artisans in some parts of the country.
Negotiations with the ICICI Bank and the National Association of
Software and Service Companies (NASSCOM) are underway for the establishment of
Electronic-Kiosks at handicraft clusters to provide information about various
developmental schemes, marketing events, marketing trends and intelligence to
individual artisans, as well as establish inter-connectivity between clusters
for the exchange of data.
To provide raw materials to the handloom weavers at Mill Gate
prices, the Government has established Yarn Depots. In addition to 110 existing
yarn depots, 273 new yarn depots have been set up.
Initiatives in the Handloom Sector include the launching of the
Health Insurance Scheme, the Mahatma Gandhi Bunkar Bima Yojana, and the
Integrated Handloom Cluster Development Scheme. During 2005-06:
2.41 lakh weavers were covered under the Health Insurance Scheme.
2.05 lakh weavers were covered under the Mahatma Gandhi Bunkar
20 handloom clusters have been taken up for holistic development at an
estimated cost of Rs. 40 crores
Handloom Mark has been launched by the Hon'ble Prime Minister on 28th June,
2006 so as to give a distinctive identity to handloom products.
The Technology Upgradation Fund Scheme for Handloom Sector has
been launched on 31st July, 2006 under which Capital Subsidy upto Rs. 20 lakhs
can be given for pre-loom/loom/post-loom technology upgradation.
In order to assure pure silk to the consumers across the
country, Silk Mark was launched in June, 2004.
Central Silk Board Amendment Act (2006) has been passed by Parliament, to help
the industry to improve overall quality of silk by introducing high quality
standards and certification systems, to regulate import and export of silk work
In order to improve the quality and quantity of wool produced in
the country, an Integrated Wool Improvement Programme was initiated providing
for a number of schemes for improving the quality and quantity of wool produced
in the country.
The rehabilitation of the National Textile Corporation (NTC),
which had eluded solution for nearly ten years, has commenced.
Rehabilitation Scheme is under implementation at an estimated
cost Rs. 3938.00 crore. This includes the modernization and revival of
viable mills, the closure of unviable mills, and payment of VRS benefits to
employees as well as the liquidation of statutory dues and other debts.
The scheme is financed through the sale of assets and support by
the Government of India.
The Indian textile industry is in a much stronger position now than it was in
the past. The industry which has been experiencing a rate of growth
of 3 - 4 percent during the last six decades has suddenly jumped to 9 - 10
percent. There is a sense of optimism in the industry and textile
sector has now dawned a 'sunrise' sector feeling.