Textile players urged to benefit from an appreciating rupee

Indian textile players must adapt to the appreciating rupee, said A K Singh, secretary, ministry of textiles, unveiling the plans for TexSummit 2007 in Mumbai on Thursday.

He asked firms to cash in on the benefits of rupee appreciation by upgrading their plant and machinery through the technology upgradation fund scheme (TUFS).

Imported machinery constitutes approximately 71 per cent of the total cost of expansions and new plant set ups. Hence, the rupee appreciation is a benefiting factor for the textile industry in the long run, he added.

Singh said that even though exports have risen significantly in the past, the appreciating rupee has slowed it down. The industry has faced several hiccups in the past such as transaction costs, labour problems, state levies and the cost of power. Hence, the government is working on these issues to strengthen India's textile presence in the world, he added.

The industry exports both processed and unprocessed materials but the ministry urges players to export value-added products to get better realisations, in line with that of China.

The ministry of textiles is organising a two-day seminar between August 31 and September 1, 2007 in New Delhi to address the problems currently faced by the textile industry.

Meanwhile, the textile ministry has already approved 25 textile parks and five additional parks are in the process of receiving approval. This puts the total investment for parks at Rs 3000 crore in the 10th five year plan.

"However, the decision on the additional parks lies with the Cabinet. But, we are hopeful that they would be approved," Singh said.

The textile industry is growing at an annual growth rate of 9-10 per cent and is expected to touch 16 per cent in value terms with revenues of $115 billion by 2012.

The clothing and apparel sub-sector are expected to grow at a rate of 16 per cent in volume terms and 21 per cent in value terms, and textiles exports are expected to grow at a rate of 22 per cent in value terms by 2012.