Financial Daily from THE HINDU group of publications
Monday, Dec 27, 2004
Industry & Economy
`We can meet bulk demands from textile retailers'
Mr R. Poornalingam, Secretary, Textiles
New Delhi , Dec. 26
ALTHOUGH Indian garment manufacturers cannot beat the Chinese capability in supplying bulk orders to retail chains in the developed world,with the imminent end of the global quota regime in textiles and clothing, getting supply of quality garments on a scale required by giant departmental stores such as Walmart is possible, said the new Secretary, Textiles, Mr R. Poornalingam.
In an interview to Business Line here at the Udyog Bhavan offices, Mr Poornalingam said the garment units are not able to get fabric of the right quality in the required quantity. But this constraint can be solved if there is a proper tie-up, similar to contract farming.
"Mills can give their yarn to powerloom weavers and technically upgrade their quality. With ordinary shuttle-less loom, weavers can produce quality fabric with proper training. ." He said ITC, HLL and Nestle were doing it.
Stating that market pressures would determine co-operation, Mr Poornalingam said, "There is competition, infrastructure and talent. Instead of reinventing the wheel, you have to tie up back-to-back with them, use a little bit of resources to train them in manpower and technology upgradation and buyback." He said some industries in textile segment are already into this.
Mr Poornalingam said the 2004-05 Budget has provided a level playing field among different segments in the textile industry with the Finance Minister, Mr P. Chidambaram, promising a stable textile policy regime. As the quota regime gets over, the entire world is the market for the domestic industry, he said adding, "Our estimate is that the industry can double its exports from 4 per cent to 8 per cent by 2010."
He said to achieve this, the industry would have to do certain things. While the garment sector is vibrant and the spinning sector has modernised to emerge as the no. 1 supplier of quality yarn to the world, the weakest link is the processing sector.
With modernisation, disinvestment and some massive investment supervening in the industry, quality fabric production in the country would be ensured, he said, adding that two things would follow. Fabrics themselves will become exportable and competitive and the domestic garmenting units would get quality fabrics.
Recognising that the weakest link in the value chain from fabrics to garmenting remains processing, the Government has decided to give capital subsidy for a limited period to set up state-of-art processing units, Mr Poornalingam said adding, "We have identified the machinery for this and once the Finance Ministry gives approval, the scheme would become operational."
The Textile Secretary said that there were requests for importing machinery - both new and old - at a reduced rate of duty for weaving and probably garmenting. "We will certainly have a look at them as we are supportive of reducing customs duty on these machinery. If that happens, they will become cheaper and the industry would get competitive." He said the environment now is very good and even textile industry scrips are doing well.
Mr Poornalingam said the Textile Ministry officials would "interact with bankers to change their mind-set about the textile industry and, if possible, we would like them to liberalise norms on lending.
"There is a request for debt restructuring by old mills so that they become viable. We will meet the Secretary, Banking, and chairpersons of various banks to see that some help is given. All help possible by the Government will be given."
He said it was now up to the textile industry to use the opportunity and grab the global market so that the country's share gets enhanced through "improvement in logistics, management practices and workers motivation and upgradation of quality" of their end products.
Mr Poornalingam said, thanks to the cotton technology mission, cotton production was relatively higher with the Cotton Corporation of India undertaking procurement at a minimum support price to protect the growers' interest. He said a cleaning up cotton programme was also being expedited to bring down the contamination levels from 6 to the 1.5-per cent global norm. All these would require an investment of Rs 100 crore, and make available high quality cotton for domestic and overseas consumption, he added.
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