Assocham submits its 10 point agenda for the growth of India textile industry

Indian textile industry has is a huge opportunity to increase its global market share with Chinese textile industry reducing its spinning activities thereby becoming uncompetitive and on the other hand Bangladeshi textile sector facing wage disputes, security and compliance related issues, said Thyagu Valliappa, chairman, Textile Council of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) who led the chamber’s delegation along with R.K. Wij, advisor, Indo Rama Synthetics Limited.

ASSOCHAM has submitted a 10-point detailed agenda for growth and development of Indian textile industry to the Textiles Minister, Santosh Gangwar.

In order to ensure price stability and security for both cotton farmers and mills, ASSOCHAM has recommended a package consisting of key elements like – an interest subvention of five percent for working capital for cotton purchase, banks to provide working capital limits covering nine months’ cotton requirements as against present requirement of 3-4 months and margin money being charged by banks on working capital for cotton be reduced from the existing 25 percent to 10 percent.

An interest subvention of five percent would lead to substantial increase in cotton yarn production and cotton consumption thereby leading to expansion of spinning sector to serve the downstream segments of textile value chain in a better way. With over 30 percent cotton produced in India being exported, converting this cotton into yarn and other value added products would increase their exports and also help create additional employment.

Besides, the transport of cotton and cotton yarn should be exempt from Cabatoge Rule and using foreign flag vessels for transport between southern states (Andhra Pradesh, Karnataka and Tamil Nadu) and northern states (Gujarat and Maharashtra) i.e. cotton producing states and yarn consuming centers. This will help reduce transport cost by 60-70 percent when compared to the lorry freight and sustain the viability of huge production capacities available in Tamil Nadu which accounts for about 1/3rd of domestic textile business and accounts for about 47.5 percent of spinning capacity, 70 percent cotton knitting and garment capacity respectively.

ASSOCHAM has suggested the Government to set up a cotton board, given that cotton is grown in over 15 states across India. There is a need for an organized and scientifically supported development organization, which can take up research and development work with various stakeholders.

With a view to boost cottton yield in India to 1,000 kilograms (kgs) per hectare from current level of 450 kgs per hectare, which is almost about 50 percent less than global average of 800 kgs per hectare, ASSOCHAM has suggested the government to provide improved irrigation facilities and develop seeds suitable for high-density planting to increase cotton productivity to boost farmers’ income and cater to growing requirements of textile industry.

Besides, ASSOCHAM has also recommended that government should restrict its intervention to MSP related operations in the cotton sector as restrictions on export-import of cotton would only disrupt markets.

Abolishing hank yarn obligation, doing away with sops for decentralized sectors to bring fabric production back to organized sector, establishing processing parks in coastal belt and liberalizing labour laws to utilize the ample scope for providing employment to rural women are certain other key that have been recommended by ASSOCHAM in its growth agenda for the textile industry.

Indian Textile industry has got the opportunity which needs to be tactfully converted to export performance.