Rising Re - Not the only problem in textile industry

21 Jan '08

2 min read

Exports from India are rising at 20 percent and exporters from other sectors have been able to withstand the march of the appreciating rupee. The textile industry on the other hand is one of the biggest sectors to be affected by the rising rupee in exports out of India.

The exports of textiles and apparels are galloping at a fast pace from China, but correspondingly exports from India have showed a decline.

The rupee has appreciated by nearly 15 percent, which no doubt has contributed to the decline, but other sectors have shown resilience in the face of the rising rupee.

There has been a 3 percent fall in apparel and over 15 percent drop in silk textile exports during the fiscal year. The main reason attributed to this downtrend other than the appreciating rupee is the lack of efficient weaving and processing capacities. Secondly, fabrics needed for high quality garments are not manufactured in adequate quantities. The exporters are compelled to import those fabrics.

The skewed textile policy of the 80's & 90's is also partially responsible for the mess. Previously the weaving sector was exclusively reserved for the small scale sector. If someone wanted to set up a big weaving unit he would have to pay excise duty while the smaller units were absolved of the same.

This brought in an imbalance to the overall production capacity in the textile industry. While, big spinning units were being set up, there was no major addition to the weaving and processing capacities in the country due to the above policy of the government. Majority of the funds released under TUFS were chiefly spent on creating new spinning capacities, with only 15 percent being used for these sectors.

More Apparel/Garments News - India...