The government announced a new policy for textiles, oldest of the old economy industries. The new National Textile Policy 2000 provides for a slew of deregulation measures such as freedom for the domestic large industry and foreign investors to enter the garment manufacturing sector. The policy, which received Cabinet approval last week, is designed to maintain the pre-eminent position of the textiles sector in the Indian economy, its overall exports and employment. If the policy works the textile sector, which even today is the single largest forex earner at $11 billion a year, will deliver exports worth $ 50 billion a year by 2010 – a target almost as ambitious as the $50 billion that the new economy IT sector is projected to bring in by 2008.
The new textile policy recasts the 1985 version in the light of the changes in the domestic industrial environment and the global trade regime. Textile Minister Kashiram Rana termed the Cabinet’s approval of the policy as a “landmark” decision, aimed at promoting a vibrant and dynamic Indian textile sector which would be able to compete internationally and withstand the pressure of imports in the domestic market.
Mr. Rana said the policy provides for a “growth-oriented” excise and customs duty structure and a number of promotional measures covering all segments including jute, silk, fibre, fabric, garments and handicrafts.
The garment sector will be taken out of the small-scale industry (SSI) reservation list, allowing the entry of medium and large-scale industries and foreign investment. There will be no limit on investment and the clearance of foreign direct investment (FDI) will be government by the existing policy. FDI will not involve any export obligation.
Textile Minister Mr. Kashiram Rana said the entire duty structure would now be reviewed to promote the industry and the new year’s Budget was expected to reflect the new... [continues]
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