While imports to Europe and US markets showing signs of improving by the end of this fiscal, Indian exporters are seeking government help to create a conducive environment to boost exports. Declining rupee against the dollar, experts feel can work in favour of exporters.
However, D K Nair, Secretary General of the Confederation of Indian Textile Industry (CITI) feels, with the global crisis hitting India’s key markets, demand has slowed down. At the same time, markets like the US and Europe, are showing signs of improvement. To take advantage of this situation, the government must step in and resolve issues affecting cotton and cotton yarn. Nair says the changing Chinese import policy has led to surplus stocks and forced many spinning mills to work on lesser number of shifts and some to even close down.
In the case of garments and apparels, Indian exporters have to pay 16 per cent import duty on shipments to its largest market Europe, while competitors like Cambodia, Vietnam and Pakistan enjoy zero per cent duty. Agrees K Selvaraju, Secretary General of South Indian Mills Association (SIMA). He says that the government should help in increasing exports of garments and made-ups to help segments like cotton and cotton yarn. He added that the fabric units could increase their production for the garment industry and absorb the surplus stocks of yarn. Also most spinning mills are facing working capital crunch with subsidies under the technology upgradation fund scheme (TUFS) still pending. Subsidy amounting to Rs 3,000 crores has been pending since 2010 and the incentive under focus market scheme has also been withdrawn.
Release of payment of subsidies, he feels can at least solve the working capital problems of mills. Even investments in Tamil Nadu, which saw annual investments of over Rs 20,000 crores prior to 2008, have dried down. At the recent Global Investors Meet in Chennai, the industry could garner a meagre 0.8 per cent of the total investment commitments which amounted to Rs 1,955 crores.
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