Welspun Group seeks government plan to encourage textile exports

India is self-sufficient in textiles as the textile industry is one of the major contributors for India’s export basket contributing 12% of India’s total foreign exchange receipts and is not dependent on imports. This was projected by then Planning Commission that Textile exports will grow by 12% in coming years. In light of this, it becomes necessary to encourage textile exports, said B K Goenka, Chairman of Welspun.

Welspun expects proposal to encourage textile export from government wherein the interest rates for Textile exporters should be capped at 7% as it will significantly reduce the interest payment burden of textile exporter and attract more and more investments.

As textiles is identified a priority sector for encouraging investments. Cost of credit is a major concern for Indian Textile Industry. To ease this burden, the Government had launched “Interest Subvention Scheme” which was discontinued in 2014. This scheme needs to be continued for next 3 to 5 years.

India’s share in world textile market is mere 4% as compared to China’s 35%. The Industry needs to focus on achieving larger share in global markets. To achieve this, Textile industry needs investments in Large Scale Industries (LSI) and mega textile projects.

Also the perennial complexities in getting TUF refunds make the process time taking. Exporters are required to file the claims through banks to Textile Commissioner’s Office (TxC) and in turn will be submitted to Ministry of Textiles. On availability of required funds from Ministry of Finance, Ministry of Textiles will approve claims and send it to Pay and Accounts office, who will give credit to banks. Finally banks distribute funds to respective exporters. This entire process takes around 5 to 6 months. Exporters lose working capital for this period.

As textile Industry is the second largest employment generator after Agriculture. Skill development has been identified as one of thrust areas by the Government of India. Welspun propose that Textile Ministry should devise a policy for developing multiskilling institutes through Public Private Partnership (PPP). Current scheme for skill development devised by Textile Ministry does not give reimbursement of expenditure on Infrastructure for training institutes, which should be given in the future. Training Syllabus should be made common across the country which will make beneficiary employable across the country.