The Hindu : Business : Textile industry seeks sops

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Textile industry seeks sops

Special Correspondent

Industry hit by shortage of cotton, rising input costs

NEW DELHI: Concerned over the rise in input costs and shortage of cotton, the textile industry has urged the Centre to take immediate steps, including abolition of import duty on cotton and a ban on its exports, to prevent the collapse of the sector that has already seen a massive amount of job cuts in the past few months. After their meetings with the Union Finance, Commerce and Textile ministers on the issue, representatives of the textile industry have now sought Prime Minister Manmohan Singh’s intervention urging him to announce sops for the industry to avert further job loss and closure of units.

Addressing a press conference here on Tuesday, the Confederation of Indian Textile Industry (CITI) Chairman P.D. Patodia said the industry has been severely hit by the shortage of cotton and rising input costs, and already 3.5-lakh jobs have been lost this year due to the decline in exports and high input costs.

Speculative operations

Pointing out that the raw material has disappeared from the market due to speculative operations by international traders, Mr. Patodia said cotton prices in the country have increased by over 35-40 per cent during the last one year. Over one-lakh workers have lost their jobs in just three southern States of Tamil Nadu, Karnataka and Kerala alone in the last one year. Mr. Patodia said they have urged the Prime Minister to withdraw customs duty on cotton, ban all exports of cotton and provide cheaper loans. Similarly, a mechanism should be evolved for assessing the cotton needs of Indian textile industry periodically and permit export of cotton only to the extent of exportable surplus available, he demanded. Commenting on the textile exports that are likely to touch $22 billion this year, CITI Secretary General D.K. Nair said: “The investment under Textile Upgradation Fund Scheme has been to the tune of Rs.79,000 crore, which is equal to the investment in the previous seven years put together under this scheme.”

“Since the rupee is now depreciating, exports might not decline further this year. However, it would be very difficult to realise the $50 billion target set by the Centre by 2010 amid high input costs and rising cost of production,” Mr. Nair added.

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