Govt eyes Australia, Africa to boost textile exports

It is chasing a target of doubling exports in 10 years and is working on a new policy to promote value addition

The Union textiles ministry is looking at Australia, the Commonwealth  of Independent States and Africa to boost exports through bilateral agreements as free trade agreements (FTAs) with the European Union and the US are delayed.

The ministry is chasing a target of doubling textile exports in 10 years and is working on a new textiles policy to promote value-addition.

Guidelines had been finalised for a revised Textile Upgradation Fund Scheme and these would be placed before the Cabinet, Textiles Secretary Rashmi Verma said on the sidelines of the India International Handwoven Fair in Chennai.

Textile exports are unlikely to reach their 2015-16 target of $47.5 billion (Rs 3.17 lakh crore) because the figure was $32 billion (Rs 2.14 lakh crore) till December. Last year, India’s textile exports were $42 billion (Rs 2.81 lakh crore), which was in large part cotton and yarn.

“We might be a little short of target, but by and large we will achieve it,” Verma said and added since India did not have FTAs with the US and the EU, the sector was at a big disadvantage compared to Bangladesh and Vietnam. These countries export textiles to the West at zero duty while Indian exporters face duties of 10-14 per cent.

The ministry has proposed relaxation in labour laws to allow women to work at night.

“The simplified textile policy is also ready. We are in the process of sending it to Cabinet. We should be able to bring it out in two months’ time,” Verma said. The policy focuses on increasing the contribution of value-added products from the current 25 per cent.

“We are trying to balance the value chain so that value addition can take place within the country. The share of raw material will come down when the overall exports grow,” she added.

Verma said most incentives or subsidies offered by the ministry were related to production. Those related to processing and skilling would be continued, she added.

A meeting of all stakeholders would be held next month to take stock of India’s commitments to the World Trade Organization, Verma said. It will review the subsidies that can be phased out.