Hence, its allocation should be increased. Spinning and composite mills have been the prime beneficiaries of the sector.
The benefits of the scheme should be extended to processing and garment sector as these are the highest value added products in textile manufacturing chains and earn maximum foreign exchange.
The Ministry of Textile should also ensure timely completion of Textile Park projects made under STIP and also it should further open up the sector by reducing customs duty on import of textile machinery and equipment to zero level in next 4-5 years.
The Study also points out that their exists a large number of schemes meant for various segment of textile industry. The schemes need to be relooked at and brought under single umbrella so as to minimise procedural and bureautical hurdles and realise the actual benefits.
The non-performing schemes should be scrapped and adequate budgetary provisions be made for the schemes that have done well.
The industry suffers infrastructure constraints which add to transportation and transaction cost and render this industry and its logistics fragile which make it non-competitive.
The Chamber has also recommended easing of interest rates on export credits, premier for export insurance, speeding up the clearance of excise duty and central sales tax reimbursement so that these measures act as cushion and help exporters to realise higher export proceeds.
The textile industry is in the dire need of fresh investment in capacity expansion, modern technology and machine installation.
The sector attracts lowest level of foreign direct investments in spite of the fact that 100% FDI is allowed in it under automatic route.
The global manufacturers and private equity funds should be encouraged to invest in partnership with the small scale manufacturers to boost investment in the sector.
Another constraints is on the form of labour reforms. The industry is governed by stringent labour laws which hamper its competitiveness and delays induction in reforms of it.
Associated Chambers of Commerce and Industry of India
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