The country's textile industry needs Rs 1,94,000 crore during the next five years to meet its domestic and international market challenges, says a report prepared by Confederation of Indian Textile Industry (CITI), which outlines a vision statement for the textile sector.
The investment could be raised with a 30:70 debt: equity financing, suggests the report, which points out that the investments are critical to achieve the target of capturing a market worth $ 110 billion by financial year 2012. The current domestic household consumption and exports account for $ 52 billion.
The report says that India’s share in the export market will increase from current 4 per cent to about 7 per cent by 2012.
Investment in the textile industry is expected to generate additional 14 million jobs of various classes and skills. According to the report, the sector would provide a direct employment opportunity to six million people with 4.4 million in the apparel sector, while indirect employment through allied sectors is likely to be eight million.
In order to attract foreign direct investment in the sector, the government should urgently address infrastructure constraints and transaction costs with a focus on reducing the cost of doing business in the country, the report says, while suggesting the introduction of certain measures for labour flexibility.
The report has said that as per the conditions of India’s entry into World Trade Organisation, developed countries can apply selective quotas on China until December 31. “This provides us, perhaps, with a last window of opportunity to establish credentials and put the (domestic textile) industry on a firm footing,” the report says.