Indian industrial groups call for early reform of the textile industry
An industrial group in India recently called for accelerating the reform of the country’s textile industry, encouraging investment of US$55 billion to assist the Indian textile industry to grow by 22% by 2010. However, the Indian Chamber of Commerce and Industry also warned that unless the existing problems of the Indian textile industry can be solved in time, the investment in the next three years may fall to 16 billion U.S. dollars, and the job opportunities will remain at 19 million. A study proposed by the Indian Chamber of Commerce and Industry, 'Indian Textile Industry: Weaving the World's Cloth' pointed out that unless a strong reform of the Indian textile industry is carried out, the expected growth rate will decline by 6%. In the 2006-2007 fiscal year, the Indian textile industry invested 330 billion Indian rupees, a 51% increase from the 218.5 billion Indian rupees in the previous year. The study also pointed out that the overall market size of the Indian textile industry reached 47 billion U.S. dollars, the Indian domestic market was about 30 billion U.S. dollars, and the export market was about 17 billion U.S. dollars. However, VenugopalNDhoot, chairman of the Indian Chamber of Commerce and Industry, said that the continued appreciation of the ruble has reduced the profits of the industry, while also making companies face a more difficult competitive environment in the international market. Chairman Dhoot is calling on the Indian government to take on more responsibilities for the plight of the country’s textile industry, including lowering tariffs on raw materials and production equipment. The current import tariff rate for man-made fiber fabrics is 8%, and the import tax rate for man-made fiber raw materials is 16%. Chairman Dhoot stated that the Indian government should return the 4% import tariff on textiles and clothing to exporters. The conclusion of the research report pointed out that the Indian textile industry urgently needs new investment to expand assets, seek more modern technologies, and add equipment. The research report also pointed out that global manufacturers and private equity funds should be encouraged to invest in Indian small-scale manufacturing, and at the same time improve India’s stringent labor regulations as soon as possible.