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SIMA demands level playing field for textile industry
10
Aug '15
Chairman of The Southern India Mills' Association (SIMA) T Rajkumar, has appealed to Prime Minister to announce slew of policy initiatives to create a level playing field for the textile industry which employs over 110 million people to compete in the global environment and achieve the envisaged growth rate.

At a press conference, Rajkumar said that the industry could achieve over Rs 3 lakhs crore investments during the last 15 years and it has potential to attract Rs 2 lakhs crores in the next five years, if the right policies were in place. He stated that taking advantage of the surplus cotton, spinning capacity, fabric production capacity could be converted into a significant amount of foreign exchange which could greatly help the government to overcome the balance of payment issue.

He said external factors are curtailing the growth cotton based textile industry which is facing yet another long drawn recession for the last 15 months. Spinning and powerloom are the worst affected.

Though various state governments have announced attractive textile policies and aggressively marketing for attracting investments, these policies have become a major threat for the existing capacities to compete with the new capacities being created.

He claimed that in the absence of a level playing field due to higher rates of duties for Indian textile products in various major international markets, higher raw material cost, high cost of funding and high transaction cost, the industry is not in a position to achieve its potential growth rate.

Rajkumar pointed out that under these circumstances, it is very essential for the central government to come out with a policy initiative to strengthen the competitiveness of the Indian textile industry. This would enable the industry to achieve the growth rate of 25 to 35 percent in the short run and 20 per cent growth rate in the long run. This industry could achieve a business size of $500 billion by 2025 from the current level of $110 billion, if the right policies are in place.

Rajkumar stated that Vietnam and Cambodia have zero duty access and Pakistan has zero duty access for fabrics and 5 per cent duty for garments and made-ups in China while the Indian yarn attracts 3.5 per cent duty, fabric attracts 8.5 per cent duty and made-up & garments attracts 14 per cent duty. Pakistan, Bangladesh and Cambodia have zero duty access in EU and Bangladesh and Cambodia have zero duty access in US.

He appealed to the Centre to expedite FTAs with China, EU and other countries on a war footing and create a level playing field to enable India to grab the opportunities emerging in these countries particularly China which had already started cutting down its production.

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