Chairman and Managing Director Loyal Textiles Mills
Growth in exports will help domestic market grow too
Established in 1946, Loyal Textiles Mills is one of India's leading manufacturers and exporters of fabric, yarn, garments, and fibres. In an interview with Fibre2Fashion, Manikam Ramaswami, CMD of Loyal Textiles discusses various steps that the government can take in order to boost textile exports and develop the domestic textile market.
What according to you are the major stumbling blocks preventing this country from scripting success? What steps need to be taken to make up for ground lost to smaller countries like Bangladesh, Vietnam, etc?
During the last decade, several mistakes were made - like allotment of natural resources including spectrum; several lakhs of motivated loans through PSU banks to unworthy borrowers; most importantly, uncalled-for protection to monopolistic producers of essential materials including raw materials; implementation of a foreign trade policy that was exactly opposite to the stated policy; and lack of progress in signing free trade agreements (FTAs) with consuming nations, besides (not taking) aggressive steps to narrow the trade gap with China.
The honourable courts have set aside resource allocations. Reverse auction of coal will result in lower power tariffs. States will get several thousand crores, and can improve the infrastructure without affecting taxes. PSU banks, hopefully, will not further lend to unworthy borrowers, and will take aggressive steps to recover from willing defaulters. This will reduce the need to have high spreads between borrowing and lending costs, and bring down interest rates.
If the commerce ministry studies the various uncalled-for protections and removes various antidumping duties and Bureau of Indian Standards (BIS) certification requirements, then the prices of viscose, polyester, plastics, cement, metals, and tyres will drop by 15-50 per cent. If the ministry strictly implements foreign trade policy (FTP) as per the stated policy of incentivising, then labour-intense exports and net Forex-earning exports, will get 7 per cent incentives, which is a must for us until we sign FTAs with the European Union, Canada and Australia.
If our commerce ministry insists on getting a favourable reduction in import duty for our fabrics and home textiles, just like Pakistan, Bangladesh and Vietnam, given our US$ 34 billion deficit, we will get it. The China National Textile and Apparel Council (CNTAC) will not oppose the move.
If our government gets us our raw materials at international prices by removing the uncalled-for antidumping duty and gives us incentives until we get a level-playing field through FTAs and negotiated tariff reductions as per the stated FTP, we can easily exceed exports of Vietnam and Bangladesh put together.
Prime Minister Narendra Modi has articulated the 'Make in India' mantra. As a player in the integrated textile niche, what steps does India need to take to make this dream a reality?
The commerce ministry needs to cancel all antidumping duties and BIS certification requirements for all products produced by less than 10 manufacturers (since, near-monopoly situation with protection leads to exploitation). It needs to implement the FTP policy as is stated officially, and quickly create level-playing fields by signing FTAs with developed nations.
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