The Hindu Business Line : `De-reserving knitting sector will boost technology, investments'

THE Ministry of Textiles is quite optimistic that the removal of knitwear from the reservation list for small scale sector (SSI) as notified by the Department of Small Scale Industry recently would encourage large high-tech capacity building and enhanced flow of investments into this key sector of the garment industry.

Officials in the Textile Ministry said on March 28, the Government notified dereservation of 108 items from the SSI sector, including 20 in the category of textile products in which the major beneficiary is the hosiery industry. It said that in the Budget 2005-06, the Finance Minister, Mr P. Chidambaram, made an assurance to de-reserve knitting segment from SSI and accordingly a notification was issued.

The Government is of the view that this segment of the industry has immense export potential and to make ample advantage of the emerging opportunities, de-reservation has been considered important.

Globally the growth in knitwear consumption and trade has been growing at a faster clip than that of woven garments. Investments in knitting capacity have been growing at a faster rate the world over. But the Indian knitting segment has continued to be reserved for the SSI sector.

It might be recalled that the Government had de-reserved the woven garment segment from small scale industries effective from January 1, 2001 and with the knitting segment too being taken off from the SSI reservation policy, the Government is quite sanguine about production of higher value added knitwear items for exports from India in the post-quota textile regime governing global trade in textiles and clothing.

When contacted, the Apparel Export Promotion Council President, Mr A. Sakthivel, and one of the leading knitwear garment exporters from Tirupur in Tamil Nadu, told Business Line here that this move would impart a shot in the arm to the Rs 10,000 crore worth knitwear export industry from the country by encouraging huge investment inflows and churning out higher value-added knitwear items for exports.

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