The woes of the Indian textile industry caused by fast eroding competitiveness in the face of a rapidly appreciating rupee have reached the Prime Minister who has reportedly assured appropriate measures to reverse the decline and ensure the industry’s sustained growth.

Apprising Dr Manmohan Singh of the basic feature of the industry — low import intensity and high export volumes — a delegation headed by Mr P.D. Patodia, Chairman, Confederation of Indian Textile Industry, sought adequate fiscal and other relief to save the industry from the threat of sickness.

The suggestions made for short-term relief include refund of all local levies (State and municipal) amounting to 6 percent on all exports of textiles and clothing products; pre and post-shipment credit to be made available at a flat rate of 6 percent; withdrawal of service tax applicable to all export related activities; and moratorium of one year on the return of principal loan amount.

It is well known that the textiles and clothing industry is labour-intensive and employs a large number of skilled and unskilled workers.

Falling export competitiveness — currencies of competing countries are depreciating — threatens to hurt the livelihood of workers. More than 50 percent of the industry’s production is exported. There is also the risk of some industrial units turning sick and loans turning non-performing assets, Mr Patodia added.

Mr. Divya Aggarwal

Money Management Consultants Ltd

Senior Copy Editor, Money Management Consultants Ltd
New Delhi, India

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