Investment In India'S Textile Industry Will Reach US $55 Billion In 2010.

According to the study of India Federation of Commerce and industry (ASSOCHAM), India's domestic textile industry is currently facing all kinds of challenges and opportunities. If the reform accelerates, the investment may reach 55 billion US dollars in 2010 and create 65 million 400 thousand jobs, and its annual compound growth rate (CAGR) may increase to 22%.

A study by ASSOCHAM pointed out that due to various bottlenecks, the estimated investment in 2010 will be reduced from $55 billion to $16 billion 900 million, and job opportunities will be reduced from 19 million to 19 million.

ASSOCHAM President Mr. Venugopal N. Dhoot announced the results of the study, saying that 22% of CAGR in 2010 will fall to 6% unless the textile industry actively promotes reform.

The textile industry attracted 330 billion rupees in the fiscal year 2006 to 07, an increase of 51% over the previous year's 218 billion 500 million rupees.

The total scale of the textile industry is 47 billion US dollars, the domestic market is US $30 billion, and the export market is US $17 billion.

Mr. Dhoot said rupee's strong influence has already affected the competitiveness of the textile industry, reducing its profits and weakening its international competitiveness.

If the reform continues to be postponed, the glory of the textile industry will never return.

The president of ASSOCHAM said that the consumption tax on man-made fiber products was 8%, but its raw material consumption tax was 16%.

The tax on the means of production can be loans in accordance with the central value-added tax (CENVAT), and the structural pformation of tax results in the superposition of credit.

Therefore, the government should flatten the tax rate so that textile manufacturers can make use of unused funds.

The import tariff of PTA is 7.5%, and it should be abolished. Because no import factor is involved, the 4% tariff added to textiles and clothing should be returned to the exporter.

The study suggested that some existing arrangements, such as TUFS, should be amended. The report said that the funds approved for the arrangement could not be refunded by the government.

Therefore, the approval funds under this arrangement should be raised.

Spinning enterprises and integrated textile mills are the main beneficiaries of the textile industry.

The benefits of this arrangement should be extended to the processing industry and the clothing industry, because in the textile manufacturing chain, the value-added products of these industries are the highest and earn the most foreign exchange.

The Ministry of textiles should ensure that the STIP textile garden project should be completed in time. At the same time, the textile industry should be further opened, the import tariffs on textile machinery and equipment should be reduced, and import tariffs would be reduced to zero in the next 4-5 years.

The research report also pointed out that there are many arrangements in the textile industry.

These arrangements should be re examined and classified under an umbrella, which can reduce barriers to procedures and offices, increase efficiency and reduce costs.

No arrangements should be abolished, and appropriate budgets should be provided to outstanding arrangements.

The lack of infrastructure in the textile industry has increased the cost of pportation and paction, resulting in the textile industry losing competitiveness and weak logistics.

The Association recommends reducing interest on export loans, paying attention to export insurance, speeding up the liquidation of consumption tax, and accelerating the refund of central sales tax. These measures will be used as a cushion to help exporters increase export earnings.

The textile industry continues to attract new investment for production capacity expansion, modern technology and machine installation.

Although the 100%FDI automated channel has been approved, foreign direct investment is at its lowest level.

Global producers and private capital should be encouraged to invest in small businesses to promote the scale of investment in the textile industry.

Another bottleneck is the form of labor law reform.

The textile industry was severely restricted by the labor law. Labor law weakened the competitiveness of the textile industry and delayed the reform of the textile industry.