PROTECT COTTON TEXTILE INDUSTRY

The cotton textile industry has a potential to invest up to Rs 4,000 crore leading to generation of 50,000 new jobs if the government accepts the sector's demands in the forthcoming Budget, a top industry official has said. "We have urged the government that Technology Upgradation Fund Scheme (TUFS) should be extended during the blackout period from June 29, 2010 to April 27, 2011, when the scheme was suspended to all cases which have been left out for no fault of the industry," Cotton Textiles Export Promotion Council of India (Texprocil) Deputy Chairman R K Dalmia told PTI here. Dalmia urged Textile Minister Santosh Kumar Gangwar to restore the benefit as investments made during the 18 month gap are eligible investments before and after extension of the TUFS. Should the Rs 1,000 crore of TUFS money surrendered is given back to the textile industry, we can assure that it would help the industry invest up to Rs 4,000 crore and kickstart the process of capacity creation leading to creation of 50,000 new jobs, he said. Texprocil, a government constituted body, is seeking duty cut on textile machinery and extending interest rate subvention of three per cent on rupee export credit to cotton textile exports to mitigate high cost of export finance. "We would have performed even better but for certain impediments we face on account of high tariffs imposed by some countries and discriminatory Free Trade Agreements (FTA's) signed by others," Texprocil Executive Director Siddhartha Rajagopal said.

Rajagopal said the Indian textile industry has been able to maintain its competitive edge in world trade. International data shows that India emerged as the second largest exporter of textiles and clothing in the world after China in 2013-14. "We request the government to negotiate favourable terms of trade with the European Union by expediting the FTAs so that we are on par with our competitors like Pakistan and Bangladesh who enjoy zero duty status," he said. He added that higher allotment is required to kickstart export growth which is currently sluggish as India faces serious duty discrimination as compared to its competitors. Advances against cotton should be treated as agriculture advances and Nabard refinance should be allowed to banks which will help mills buy from farmers at the early part of the cotton season instead from traders who buy from farmers, he said. In return, farmers will get higher prices and mills will be able to get it at lower prices, he added. Among other measures which can boost the industry are withdrawal and reduction of customs and excise duty on furnace oil; abolition of excise duty on textile machinery, spares and components; reduction of central sales tax to one per cent and concessions on service tax, he said. On the global stage, the Indian textiles industry has emerged as the second largest textile exporter beating competitors like Italy, Germany and Bangladesh in 2013-14. The rise in textiles exports from India is largely due to the growth in exports of cotton textiles at USD 15.18 billion in 2013-14, Rajagopal added.