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Textile firms seek exports boost in budget

 
 

REUTERS, Mumbai, 23 Feb 2011

Swati Pandey

The textile industry has sought measures to boost exports of apparels and textile products in a cost-competitive market and easier access to funds for cotton buyers as it peaks in a year of global shortage.

The Confederation of Indian Textile Industry (CITI) has also sought the restoration of drawback rates as "our textile products are facing tough competition in global markets."

"There is an opportunity for taking up market share because costs in China have risen considerably and buyers are shifting some of the sourcing to other parts," said Devangshu Dutta, chief executive, Third Eyesight, a textile consultancy.

"We should be looking at encouraging conversion of raw material within the country. Far too much export is weighted towards raw material and intermediate products," he added.

The government has restricted exports of cotton yarn at 720 million kg for 2010/11 season that began on Oct. 1.

India's apparel exports volume may crimp by at least 15 percent in FY11 as sky-rocketing cotton prices shrivel demand.

U.S. cotton futures early this month rallied to a record high of $2.1102 per lb. While cotton prices in India are still near a record high touched on Feb 10.

One export sop would be the re-introduction of Section 80 HCC, which exempt income from exports, Manish Mandhana, managing director of Mandhana Industries, said.

"Boosting the cost competitiveness of Indian products in the U.S. and EU markets" is what the industry needs, he added.

CITI also wants that working capital for cotton purchase to textile mills be given at lower margins, cheaper rates and a longer credit-period.

"Given that the situation is not very good because of cotton prices," said R.K. Dalmia, president, Century Textiles, "They should have a sympathetic view of the industry."

CITI wants the government to abolish duties on all machinery for textile and clothing industry until domestic industry is able to supply products of global standards.

It also wants more allocation under the Technology Upgradation Fund Scheme (TUFS) for FY11 and FY12 in order to avoid delay in disbursements.

TUFS, under which textile units can avail loans at concessional rates, has been suspended as funds earmarked for the eleventh plan period has been already been utilised in the first three years.

(Editing by Harish Nambiar)

 
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