Indian textiles, popularly known as a sunrise industry, is now in the grip of uncertainties and is really passing through the worst-ever phase in its career in the absence of adequate policy support for its growth and sustenance. Several industry representations for monetary and fiscal reliefs have fallen on deaf ears. However, a section of the textile industry seems to draw comfort from the Central announcement that an inter-ministerial group will be set up after the forthcoming Central Budget to thoroughly analyse the problems faced by the different segments of the industry related to the high customs duty on synthetic fabrics and the need for labour utilisation beyond 60 hours a week, and find quick solutions for them. Mr. Ajit Kumar Seth, Cabinet Secretary, who made this disclosure on the sidelines of the recently-held India International Garment Fair in New Delhi, was categorical that the proposed committee will hold a meeting with industry representatives every three months to review the sector’s periodic progress.
Of major concern to the textile industry are the controversial entry of foreign direct investment (FDI) in multi-brand retail and the widespread power shortage. Reliance on FDI-driven growth is the order of the day, particularly among developing countries. The advantages accruing from a steady flow of FDI far outweigh the imaginary disadvantages like gradual elimination of SMEs from the scene. The reasons why MNCs like Wal-Mart are keen to establish themselves in a growing economy like India are the mounting personal income of the vast population and ever-increasing consumer spending. Based on the current growth, the domestic retail market in India, now estimated at $500 billion, is expected to touch the $1 trillion mark by 2020. The approved FDI policy in India comes with a lot of strings attached. While it would make the new entrants wary of the risks involved, those venturing into the market would only encourage the existing players to be more competitive in their approach, ultimately benefiting the consuming public at large. As for power shortage, the less said the better. Daily power shutdown has forced textile units all over the country to either cut down production or declare partial closure, leading to heavy under-utilisation of capacity.
The Government can only ill-efford to remain indifferent to the plight of the textile industry, the largest exchange earner for the country. Though there are no indications as to what the Finance Minister, Mr. P. Chidambaram, has up his sleeves for resuscitating it, the industry is looking forward to the forthcoming Union Budget with great expectations. Its optimism is based on the sustained efforts put in by Mr. Anand Sharma from day one of his taking over as the Commerce & Industry Minister for the textile sector’s revival as well as his close proximity to the Finance Ministry.