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Textile industry seeks level playing field

Indian textiles makers are hoping for help to tackle global competition after the government lifts import curbs on many products this weekend to comply with a world trade ruling.

Commerce Minister Murasoli Maran is due to announce India's new export-import policy for 2001/2002 (April-March) on Saturday.

"We're expecting some policy rationalisation to have a level playing field to compete with the global players in a free trade regime," Cotton Textiles Export Promotion Council Siddhartha Rajagopal said.

The textile sector is likely to bear the biggest brunt of the move to end import restrictions to abide by the World Trade Organisation (WTO) decision, analysts say.

Under the ruling, the government must lift quantitative restrictions (QRs) on the import of over 700 items, about one third of which fall in the textiles sector, traders said. This will mean a challenging future for the under current conditions.

The textiles industry, largely based on cotton, makes up about one-third of India's total exports. The country's annual cotton production totals 2.3 billion kgs while yarn production is 2.2 billon kgs.

Textile manufacturers say for them the bottom line in order to compete with other textile-producing nations is the need to have the same energy and borrowing costs.

HIGHER COSTS HURTING

Right now, higher production costs are hurting the industry's ability to take on the overseas competition, traders say. Power costs in India are two to three times higher and interest rates are double the levels in other textile-producing nations.

"We can compete very well in the world market provided these issues are dealt with by the government," an industry official said.

The cotton industry is in favour of free trade, B K Patodia, chairman of the Indian Cotton Mills Federation.

But he said as part of a move to create a level playing field, the existing five per cent duty on imports of raw cotton should be abolished and the system of allocating an export quota for cotton should be scrapped.

He also said the present levy of about 25 per cent on imports of textiles machinery should also be reduced to five per cent.

According to the 1991 census, the total number of weavers, artisans, and craftsmen dependent on textiles and textiles based activities stood at around 15 million.

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