Financial Daily from THE HINDU group of publications
Thursday, Mar 25, 2004
Financial Daily from THE HINDU group of publications Thursday, Mar 25, 2004 |
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Industry & Economy
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Textiles `EOUs must be converted to domestic tariff area units' K.R. Srivats
New Delhi , March 24 THE Northern India Textile Mills' Association (NITMA) has urged the Government to ease the "de-bonding burden" on textile and apparel units operating under the export-oriented units (EOUs) scheme to enable such units to convert themselves into domestic tariff area (DTA) units. "With the opening up of the economy and impending removal of quotas in the next nine months, there is no economic relevance for concepts like EOUs. There may be perhaps relevance for a concept like SEZ (special economic zone). The Government must allow a meaningful way to get the EOUs converted into DTA units," said Mr Sachit Jain, President, NITMA. He held that the concepts like EOU scheme were definitely relevant when the economy was controlled. Mr Jain said that garments would now onwards lead the textile industry and apparel segments. "In India, traditionally the textile and apparel industry have been seeing each other as rivals. Each sector has viewed the other with suspicion and questioned their respective motives," he said. As a result, the textile industry focused on export of yarn and fabrics and the apparel industry on earning profits through quota and imported fabrics. This, he said, has to change and is already changing. "Some large textile companies have already ventured into the apparel field and garment exporters have backward integrated into knitted fabrics and some have even moved back to spinning. This has led to the appreciation of the need of each of the sectors. The coming quota-free regime from 2005 will necessitate much closer cooperation between the two sectors in order to achieve the fast shrinking lead times," the NITMA President said at the annual general meeting of the association.
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