The Hindu Business Line : `Reforms, modernisation must to drive textile sector'

CHINA and Pakistan may completely capture the country's global textile market share of 4 per cent following the phasing out of the multi-fibre agreement (MFA) from January 1, if India fails to take precautionary measures in initiating massive reforms and modernisation drive to strengthen its textile sector.

The aforesaid conclusions have been drawn following the completion of a study on `Textile sector of India: Strengths, weaknesses, opportunities and threat in the quota-free regime' conducted by the Associated Chambers of Commerce and Industry (Assocham).

Releasing the study here today, the Assocham President, Mr Mahendra K. Sanghi, cautioned that the country needs to introduce massive reforms and modernisation drive for its textile sector, failing which China and Pakistan will deprive India of its existing market share of textile exports in the overseas market.

In case adequate safeguards are not observed, "Thailand too will emerge as still another major competitor for Indian textile industry as there is every possibility that the proposed Indo-Thai Free Trade Agreement could provide scope to dump cheap textiles goods into India from a third country," he said.

According to the study, while the US, European Union, UAE, Canada, Bangladesh, Saudi Arabia, Republic of Korea, Russia and Japan are among the top importers of Indian textile goods other markets are also being explored.

As the industry grows, opportunities for suppliers to the industry are also growing.

Assocham is of the view that MFA phase-out could bring a huge increase in the country's annual exports and make it the big winner in the global market, after China.

This breakthrough will occur, however, only if the Government accelerates the pace of reform and local manufacturers adopt measures to improve their competitiveness.

With reforms, India can achieve a potential size of $ 100 billion by 2010 including a $50 billion domestic market. This would create 10 million job opportunities, five million direct jobs in textile industry and five million jobs in the allied sectors.

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