The Hindu Business Line : `Consolidation of apparel sector will drive exports'

CONSOLIDATION of the apparel industry currently remaining disintegrated should gain momentum with the abolition of quota regime and would enable India accelerate its textile and clothing exports in the seamless global textile trade, according to Mr T.C. Venkat Subramanian, Chairman and Managing Director of Exim Bank of India.

Delivering key note address at the inauguration of `Comptex 2005', the two-day conference of the textile industry here on Friday, Mr Subramanian said that as per his bank's recent study export of clothing would drive export potential and India with China and Pakistan among others would be major gainers in the quota-free trade regime, thanks to the advantages of multi-fibre, production capacity and cost-based advantages.

His bank had estimated that though the immediate prospect of the free-textile trade would mark in drop in export prices for the Indian shippers, the short term (between now and 2006) and long term (by 2014) gains would be for India garnering a higher market share in the US and EU.

With 90 per cent of garment exports coming from the SSI sector, the dereservation of garment from SSI and the compulsion to consolidate apparel sector to achieve the desired scale of operation would propel huge investment needs which is estimated in the order of Rs 1,50,000 crore.

One has to ponder, according to the Exim Bank Chairman, whether this level of investment could come through internal generation or from overseas funding.

As for the Chinese export competitive prowess in global textile trade, he felt that the Chinese currency continued to remain undervalued to an extent of 20 per cent thanks to the value of the yuan frozen to the dollar.

The moment China allowed its currency to float, there would be yuan appreciation by at least 20 per cent.

Mr Manikam Ramasami, Chairman CII (SR)'s textiles sub-committee, giving a overview of the theme of the textile conference `sustainable global competitiveness of textile industry' said that the investment into textile in the country was being considered on a modular way copying models of the neighbouring countries whereas it should be thought of need based and on innovative technologies.

He suggested that the role of the handloom sector in the country should be redefined as this sector could no more be linked to volume production but instead it should be encouraged to opt for heritage clothing by scientifically codifying its textile pattern.

This would turn the handloom sector more competitive in today's trade environment, he felt.

Mr Vijay Venkataswamy, Chairman of Southern India Mills Association which is co-sponsoring conference, pointed out that the opened up global textile trade has imparted a new dimension in market competition and the competition is no more between supplying countries but it is between supplying companies and the prices of the products are determined by the retailers

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