The Hindu : Business : Structural weaknesses erode textile exports

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Saturday, Sep 01, 2007
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Structural weaknesses erode textile exports

Special Correspondent

Rangarajan urges industry to be wary of threat from china

Modernisation
gains urgency
Need for large capacities

NEW DELHI: The Chairman of the Prime Minister’s Economic Advisory Council, C. Rangarajan, on Friday urged the textile industry to recognise that more than the appreciation of the rupee, structural weaknesses in the industry were responsible for the dip in exports and called upon them to take immediate measures to address the problems in collaboration with the government.

“A matter of immediate concern is the fact that export performance [of the textile sector] has taken an ominous dip from the second half of 2006-07. In the first half of the calendar year 2007, exports of textiles and clothing to the U.S. showed a negative growth of (-)1.2 per cent. This dip cannot be fully explained by the appreciating rupee since it predated the recent appreciation”.

Listing out the various structural weaknesses, Dr. Rangarajan called for urgent action from the industry in terms of modernisation, fabric processing, upscaling, reviving the textile machinery industry and upgrading skill.

The industry needs to make focussed efforts to get major machinery manufacturers from abroad to set up large scale production capacities in India through joint ventures or otherwise, make a clear analysis of its manpower requirements and participate in designing the training programmes. The appreciation in rupee value could also be turned into an advantage by using the opportunity to modernise quickly by acquiring the necessary ingredients from abroad at a cheaper rate.

Speaking at the inaugural function of a two-day meet organised by the Union Textile Ministry for a brainstorming among the leaders of the industry, policy-makers and other stakeholders on the road forward for the sector, Dr. Rangarajan said the structural weaknesses need to be addressed particularly in the wake of growing threat from China and other countries.

Emphasising that China was winning the global textile war hands down, with India coming in as a distant second, following the removal of the quota system two years ago, he pointed out that the wide gap between the export performance of China and India could have been wider but for the safeguards put in place by major importing countries to moderate the surge in Chinese imports. Reminding the captains of the industry that the safeguards would expire by the end of next year, he urged them to be also mindful of other countries, which were making inroads into the global market. “I urge upon you all to address them [the structural weaknesses] before it is too late”.

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