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Anna Peter

MUMBAI, Jan. 4

FEARS are growing that India's neighbours will overtake it in the textile exports race post-2005, according to Mr Senthil Kumar, Chairman of PDEXCIL (Powerloom Development and Export Promotion Council). This is because the domestic textile industry comprises mostly unorganised and small-scale players who are affected by high power (30-40 per cent higher than in China), capital costs and poor labour productivity.

Mr Senthil Kumar said if the Government put through programmes that help small weavers spot defects, improve the quality of fabrics and made-ups to be exported and increase productivity, the small sector could stand to gain substantially.

According to Ms Deepika Bhatnagar, Vice-Chairperson, Northern Region, PDEXCIL, "There are many dormant aspects that need to be taken care of ... and powerlooms are the chief factor in improving quality." The idea being mooted is the upgradation of existing powerlooms into semi-automatic looms and installation of new automatic, shuttle and shuttleless looms. The fact that the weaving sector operates on very low margins is also a plus. The Government has been asked to subsidise a modernisation programme for weavers.

On whether the Government would meet its target regarding the installation of powerlooms, Mr Senthil Kumar said in four months another 4,000 looms would have been installed. He added that post-2005, there would be a sufficient number of looms in place, due to which textile production would pick up considerably — making it unnecessary for any protective barriers to be put in place.

However, for this to happen, the Government would need to introduce special incentives to the weaving and processing sectors that would help make exports more competitive. He said such measures were necessary considering that there were no new investments from the organised sector and weavers could not afford Rs 50,000-1 lakh to import second-hand machines.

Of the total Rs 25,000 crore assistance to the textile industry, only Rs 100 crore had been disbursed to the weaving industry because its economic viability was in doubt. Mr Senthil Kumar said: "Banks do not encourage small proposals."

He added that the Technology Upgradation Fund only covered the import of machines that were 10 years old. Apart from India, there was much demand for second-hand machines from China, Pakistan, and even Bangladesh. Unfortunately, according to Mr Senthil Kumar, the Government did not seem to realise the urgency of the issues on hand.

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