Textiles constitute 12 per cent of India's total forex earnings. They have the potential to be the prime source of foreign exchange. To fully exploit this potential, loans for the textile sector should be given at an interest rate of seven per cent. This step will encourage investment in the sector and reduce the interest payment burden of textile exporters.
Cost of credit is a major source of concern for the Indian textile industry. Interest subvention is a support for India’s textile exports and it should be continued for all textile product categories. The policy should give a clear visibility of continuity of interest subvention for the next three to five years.
India’s share in the world textile market is a mere four per cent compared to China’s 35 per cent. If India desires to enhance its global share, it should focus on scale of operations. Scale can be achieved through investments in mega textile parks. A new scheme of incentives for setting up mega textile parks can be a game changer for the future of the textile industry.
The textile industry faces difficulties in getting TUF refunds. This entire process takes around five to six months. Exporters lose working capital for this period. The procedure should be simplified. Banks should pay up the industry’s claims and in turn claim refund from the government.
