Cotton Textiles are amongst the select few items in the textile and clothing basket that have shown positive growth in Exports during the current fiscal year 2012-2013. Current trends in exports indicate that they will surpass the target of US$ 9 billion set for the sector and reach US $ 9.56 billion. Overall growth in exports during fiscal 2012-2013 is expected to be around nine per cent over the previous year against the backdrop of adverse market conditions in European Union & USA.
The textile industry seems to have fully recovered from the losses it has incurred in the previous years when there was a severe volatility in the national and international markets. Capacity expansion is once again beginning to happen. The Union Budget 2013-14, has given for modernisation and expansion of the textile industry.
Robust export growth is very essential for the financial health of the textile industry. For a profitable textile industry, it is very important to have continuous additional capacity creation required for the huge potential we have today, by way of becoming the most cost efficient manufacturers of cotton textiles and start towards achieving a growth rate of 20 per cent. The Textiles Ministry and the Commerce Ministry have been extremely appreciative of the efforts by Texprocil and have been considering various efforts made by Texprocil positively.
The following policy interventions will enable greater increase in exports:
(i) Notifying export benefits under Focus Product Scheme & Market Linked Focus Product Scheme at two digit level HS Code for Home Textile Sector instead of six digit or eight digit levels. This will also ensure against unwanted exclusions.
(ii) Treating “Cut & Sew” products like Garment, Madeups & Bags on par for all export promotion benefits. Just as jewellery exports does not discriminate between ‘bangles’ and ‘necklaces’, we feel exports of ‘cut and sew’ products should not differentiate between garments and home textiles.
(iii) Ensure that Indian Cotton is made available at international prices or lower. In this connection Government procurement agencies should not hold undue inventories of Cotton and unwittingly contribute to increase in domestic prices to the disadvantage of exports.
(iv) Importing cotton at higher International prices would only exacerbate the current account deficits (CAD), at a time when the country needs to increase exports and reduce CAD.
Domestic cotton prices are ruling at three to five per cent higher than International prices in spite of India having surplus cotton overall. This is due to artificial scarcity in the market created by procurement agencies holding over 20 lakh bales cotton procured during November-December 2012 and January 2013. Private traders are also holding large inventories.
Texprocil has requested the Government to request CCI and NAFED to start selling their large inventory to remove the artificial shortage and restor4e international price parity which is most important to help maintain export momentum