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| Issue date:15/10/2009 |
| ATA Journal for Asia on Textile & Apparel - Oct 2009 Issue |
| Source:Journal for Asia on Textile & Apparel |
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by Ajay Sinha
With a total market size of US$52 billion (including domestic household consumption at US$32 billion and exports at US$20 billion), the textile and apparel industry is one of the economic pillars of India, directly employing over 33.17 million people, the second largest provider of employment after agriculture. A number of industry associations were, therefore, founded to represent the industry’s interests and to foster its development.
CITI provides feedback to government policies
The Confederation of Indian Textile Industry (CITI) was first formed as the Indian Cotton Mills’ Federation (ICMF) in 1958, representing the organized textile units in spinning and composite sectors comprising mills producing cotton yarns, blended and man-made spun yarns, fabrics and home furnishings.
The need for an umbrella organization representing the entire textile chain was felt by various segments of the industry so as to properly project the potentials, problems and requirements of the industry in a holistic and comprehensive way within the country and internationally.
After extensive consultations, ICMF initiated the process of establishing an umbrella organization for the textile industry in 2000 with a broad base of member associations, in addition to independent weavers and processors, and later textile segments other than cotton spinning. New members included manufacturers of technical textiles and garments. The name of ICMF was subsequently changed to CITI in 2005 to better reflect the wide range of textile segments it represents.
Today, the confederation encompasses numerous important sub-sectors of the Indian textile industry with a number of associate members and corporate members.
While talking to ATA Journal, the current CITI Chairman, Rajendra Kumar Dalmia, highlighted the efforts made by CITI to provide feedback that have helped shape government initiatives like the Technology Upgradation Fund Scheme (TUFS), the Technology Mission on Cotton, the Debt Restructuring Package and significant rationalization of the excise duty structure for the textile and apparel sector in the country.
The Confederation has also sub-committees on market access, investment and skill development for monitoring development and activities relating to the respective subjects and to give focused attention to topical issues facing its members and provide proper feedback to government, Mr Dalmia said.
In regard to the recent budget, Mr Dalmia said: “The initial sentiments were a mixed one. The budget has taken care of some of the immediate needs of the industry, but a lot more needs to be done.”
“The substantial allocation of Rs 3140 crore for TUFS is expected to clear the entire backlog in the scheme so far, though additional allocation will be necessary for the remaining months of the current year,” he said, adding that on the tax rationalization front, the extension of 2% interest subvention for export credit up to the end of the fiscal is a welcome feature of the government budget.
Mr Dalmia, however, was concerned over the doubling of the excise burden on man-made fibers, which would lead to cost escalations and fall in demand in both domestic and international markets.
He said that CITI had brought this to the notice of the Ministry of Textiles, which agreed to take up the issue with the Finance Ministry. “In our post budget memorandum, we have repeated our pre-budget request that excise duty on man-made fibres may be removed in order to encourage higher utilisation of man-made fibres by the textile and clothing industry,” he said.
Key textile-related areas in Union Budget Proposal FY09-10
‧ Excise duty on manmade fibre and yarn to be increased from 4% to 8%
‧ The scheme of optional excise duty of 4% for pure cotton to be restored
‧ Excise duty for man-made and natural fibres other than pure cotton, beyond the fibre and yarn stage, to be increased from 4% to 8%
‧ an interest subvention of 2% on pre-shipment credit for oriented export sectors including textiles being extended to March 31, 2010
‧ Increased allocation for integrated textile parks |
In addition, he commented that the Foreign Trade Policy (FTP) announced by the government this August received a mixed reaction from the Indian textile and apparel industry and exporters.
“Although the primary objective laid out in the policy is to arrest the exports decline and provide additional incentives to sectors severely impacted by the global slowdown, the cosmetic measures included in the policy may not give requisite relief to the textile and clothing industry, which has been one of the worst victims of the global economic crisis,” said Mr Dalmia.
“CITI had given a series of important suggestions in its meetings with the Department of Commerce and the Ministry of Textiles, prior to the announcement of the policy. Unfortunately, apart from including a few more countries in the Focus Market Scheme (FMS), none of the important suggestions submitted by CITI was incorporated in the FTP. Inclusion of the 17 technical textile products in the Focus Product Scheme is a welcome step, however, production facilities in many of these products remain to be established in the country,” he concluded.
CITI Secretary General, D K Nair, encouraged the industry players to pay increased attention on innovation, especially for product diversification and marketing. He said that while the international markets would recover from the present slowdown, sooner or later, the Indian textile and apparel industry needed to upgrade so as to recover along with the markets.
Looking for new apparel export markets: AEPC says
Apparel Export Promotion Council (AEPC) is the official body in India that provides assistance to Indian apparel exporters as well as importers/international buyers who choose India as their preferred sourcing destination for garment products. It is an active body in India for the promotion and facilitation of apparel manufacturing and exports.
AEPC considers Japan, Russia and China as some potential apparel export destinations |
AEPC’s Chairman, Rakesh Vaid, said that AEPC serves as a one-stop shop for information, advice, technical guidance, workforce and market intelligence for Indian apparel exporters. Members have access to updated trade statistics, potential markets, information on international fairs and assistance in participating at these fairs. It also plays a large role in identifying new markets and leading trade delegations to various countries.
“In recent years, AEPC has worked tirelessly in integrating the entire industry, starting at the grass-root level of training the workforce and supplying a steady stream of manpower to the industry; identifying the best countries to source machinery and other infrastructure and brokering several path breaking deals for its members; and helping exporters to showcase their best at home fairs as well as be highly visible at international fairs in the world,” said Mr Vaid.
He added that AEPC showcases the best of India’s apparel export capabilities through the prestigious India International Garment Fair twice a year, playing host to over 350 exhibitors displaying exotic, haute, contemporary clothing products.
Rakesh Vaid, AEPC’s Chairman |
In face of the current slowdown in the trade due to the global economic recession, he called for a shifting strategy away from India’s traditional markets, and AEPC identified non-traditional markets of Japan, Russia, China, Turkey, South Africa, Brazil, Argentina, to reduce dependence on the US and the EU. He believed that the Indian apparel industry should work to increase the share of these markets from the current 12-15% over the next five years.
Meanwhile, AEPC organized a number of awareness programmes on the recently signed India-ASEAN free trade agreement.
He also noted a recent IMF forecast that the global recession had seen its worst and there were signs of recovery in the US in these months. Nonetheless, the Indian apparel export was reported to have declined at 8-15%, indicating that the industry was still under pressure.
In addition, the APEC actively participated in the formulation of the new Foreign Trade Policy 2009-2014. He recommended more attention on apparel development in the policy making. The council also suggested strengthening of the Market Linked Focus Products Scheme (MLFPS), duty free imports of critical inputs and more.
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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