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INDUSTRY & SERVICES

TEXTILES

The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country.

During 2009-10,Indian textiles industry is pegged at US$ 55 billion, 64% of which services domestic demand. The textiles industry accounts for 14% of industrial production; employs 35 million people and accounts for nearly 12% share of the country's total exports basket.

The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.

The Indian textiles industry is extremely varied, with the hand-spun and hand-woven sector at one end of the spectrum, and the capital intensive, sophisticated mill sector at the other. The decentralized powerlooms/ hosiery and knitting sectors form the largest section of the TextilesSector. The close linkage of the Industry to agriculture and the ancient culture, and traditions of the country make the Indian textiles sector unique in comparison with the textiles industry of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country.

The major sub-sectors that comprise the textiles sector include the organized Cotton/ Man-Made Fibre Textiles Mill Industry, the Man-made Fibre/ Filament Yarn Industry, the Wool and Woollen Textiles Industry, the Sericulture and Silk Textiles Industry, Handlooms, Handicrafts, the Jute and Jute Textiles Industry, and Textiles Exports.

Exports

Exports of textiles and clothing products from India have increased steadily over the last few years, particularly after 2004 when textiles exports quota were discontinued.The exports basket consists of a wide range of items comprising readymade garments, cotton textiles, handloom textiles, man-made fibre textiles, wool and woolen goods, silk,jute and handicrafts including carpets.

India's textiles products, including handlooms and handicrafts, are exported to more than a hundred countries. However, the USA and the EU, account for about two-third of India's textiles exports. The other major export destinations are Canada, U.A.E., Japan, Saudi Arabia, Republic of Korea, Bangladesh,Turkey, etc.

The Government fixed the target for 2008-09 at US $ 26.55 billion an increase of 20% over the actual performance of US$ 22.14 billion in 2007-08, for export of textiles.However, no targets were fixed for 2009-2010.

During 2009-10 (April- December) India exported Textiles & Clothing items worth US$ 15.91 billion as against US$ 15.59 billion in the corresponding period of financial year 2008-09.The share of textile exports in total exports has increased from 10.78 per cent to 12.04 per cent during April- December’ 2009 as against April- December’ 2008.

Sector Wise Analysis

Cotton Sector

Cotton is one of the principal crops of the country and is the major raw material for domestic textile industry. It provides sustenance to million of farmers as also the workers involved in
cotton industry, right from processing to trading of cotton. The Indian textile industry consumes a diverse range of fibres and yarn, but is predominantly cotton based.

The ratio of the use of cotton to manmade fibres and filament yarns by the domestic industry is about 56:46. Indian Textile Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textile industry also plays a pivotal role through its contribution to industrial output, employment generation and the export earnings of the country. It contributes about 14% to the industrial production, 4% to the GDP and 14.42% to the country's export earnings. The textile sector is the second largest provider of employment after agriculture. Hence, growth and all around development of cotton and cotton industry has a vital bearing on the overall development of the Indian economy.

Indian Cotton Varities

India is the only country to grow all four species of cultivated cotton Gossypium arboreum and herbaceum (Asian cotton), G.barbadense (Egyptian cotton) and G.hirsutum (American Upland cotton). Gossypium hirsutum represents 90% of the hybrid cotton production in India and all the current Bt cotton hybrids are G.hirsutuim. India produces large number of cotton varieties and hybrids. Though the number of varieties in cultivation exceeds seventy-five, 98% of the production is contributed by about 25 varieties only.

Cotton production and productivity

Cotton is produced in India in three zones viz., Northern zone comprising the States of Punjab, Haryana and Rajasthan, Central zone comprising the States of Maharashtra, Madhya Pradesh and Gujarat and Southern zone comprising the States of Andhra Pradesh, Karnataka and Tamil Nadu. Besides these nine States, cotton cultivation has gained momentum in the eastern State of Orissa.

During cotton season 2008-09, country once again harvested higher cotton production for the fifth consecutive year at 4.93 million metric tons (equivalent to 29.0 million bales of 170 kgs each).

Exports

As a part of measures to boost cotton trade, the Government of India had liberalized raw cotton exports since July 2001, dispensing with the system of allocation of cotton export quota in favour of different agencies and traders.Exports of cotton from the country are under Open General Licence (OGL) since July 2001. During the year 2008-09, the cotton exports from the country reached at US$ 850 million including 35 lakh bales.

The details of exports of cotton during last three years and projection of 2009-10,are given below:

Year
Qty. (in lakh bales of 170 kgs each)
Value (in US$ million)
2006-07
58.00 1170
2007-08
88.50 1850
2008-09
35.00 850
2009-10 (Estimated) 55.00 NA

Quantity figures as per Cotton Advisory Board (CAB)
Value figures as per DGCIS Kolkata

Source: Annual Report 2009-10,Ministry of Textiles

Man-Made Staple Fibre and Filament Yarn

The production of man-made staple fibre industry is expected to increase by 19% during 2009-10. The production of all the Manmade staple fibres except polypropylene staple fibre are expected to record a positive growth in 2009-10 as compared to previous year. Viscose, Polyster and Acrylic staple fibre are expected to increase by 29%, 16%, 20% respectively while Polypropylene staple fibre is expected to decrease by about 6% in 2009-10.

The total production of man-made filament yarn is expected to increase by 7% during 2009-10. The production of viscose, nylon and polyester filament yarn are expected to increase by 1%, 6% and 8% respectively.

The installed capacity and details of production of man-made staple fibre and filament yarn are given below:

Type
No.of Units
Installed Capacity
(TPA)as on 30.12.2009 (P)
Production (Mn. Kg.)
 
 
 
2007-08
2008-09
(P)
2009-10
(Apr-Dec) (P)
2009-10 (P)
STAPLE FIBRE
Viscose
6
418.68
279.90
232.75
220.86
301.00
Polyester
15
1182.73
879.61
750.11
653.54
870.54
Acrylic
8
153.00
81.23
79.51
72.08
95.22
Polypropylene
3
8.70
3.43
3.43
2.37
3.24
Total
32
1763.11
1244.17
1065.80
948.85
1270.00
FILAMENT YARN
Viscose
7 80.10 51.07 42.42 32.02 42.86
Nylon# 11 32.00 27.62 28.07 22.40 29.66
Polyester##
43 2013.49 1420.14 1332.09 1081.48 1436.46
Polypropylene#
13 17.63 10.51 15.08 11.34 14.87
Total
74 2143.22 1509.34 1417.66 1147.24 1523.85

P-Provisional

#=The exclusive capacity of N.F.Y. and P.P.F.Y.
## = The Capacity under Broad Banding Scheme has been indicated against P.F.Y.

Source: Annual Report 2009-10,Ministry of Textiles

Jute and Jute Textiles

The Jute industry occupies an important place in the national economy. It is one of the major industries in the eastern region, particularly in West Bengal. Jute, the golden fibre,meets all the standards for 'safe' packaging in view of being a natural, renewable, biodegradable and eco-friendly product.

The total area under jute cultivation in India varies between 6.38 lakh hectares to 10 lakh hectares, which is the highest in the world. This constitutes 0.6 per cent of the total area sown during the Kharif crop season. There is no significant change in area under jute cultivation since 1992-93 onwards.

Jute is an important cash crop, which is as an intercrop before paddy transplantation in most parts of the country. This has significant contribution to the farm income of a large section of rural households. Production of raw jute and mesta has witnessed a steady increase since 1951-52. It was 13.2 lakh M.T. in Jute year 1990-91 (July-June), which rose to 14.76 lakh M.T. in the Jute year 2008-09.

Globally, India is the largest producer and second largest exporter of jute goods and this sector supports the livelihood of about 40 lakh farm families, and provides direct and indirect employment to 4 lakh workers. There are 78 Jute mills in the country. Of these 61 are in West Bengal, 3 each in Bihar and Uttar Pradesh, 7 in Andhra Pradesh, and one each in Assam, Orissa, Tripura and Chhattisgarh.

Exports

The exports of Jute and Jute Products during current financial year 2009-10(upto October 2009) is estimated at US$ 1 billion.Cumulative exports during April-October 2009 is of the order of 75,999 M.Ton.

Incentives to Jute Sector

(a) Extension of Duty Entitlement Pass Book (DEPB) benefits to Jute products

The Director General of Foreign Trade w.e.f August 27, 2009, revised the DEPB rates of the jute products as shown in below table:

Product Code:90
Product Group: Miscellaneous
S.No
Description
DEPB Rate (%)
Value Cap for DEPB entitlement
24 Jute Soil Saver
5
-
25 Jute Yarn / Jute Twine
4
-
26

a. Hessian Cloth

b. Hessian made-up

5

6

US$ 0.89/Kg

US$ 1.22/Kg

27

a. Sacking Cloth

b. Sacking made-up

6

6

US$ 0.67/ Kg

US$ 0.89/ Kg

Product Group : Plastics
S.No
Description
DEPB Rate (%)
Value Cap for DEPB entitlement
1 Hessian Bags with LDPE/HDPE/PP liner/Lamination and with/without Zipper/Handle
3
US$ 3.88/Kg.
2 Jute Bags with HDPE liner/ LDPEliner/ Lamination with/without Zipper/Handle
3
US$ 3.88/Kg
3 PVC fabricated bags (made 5–from PVC leather cloth backed jute and polypropelene)
5
-
4 Poly jute bags
3
-

(b) Technology Upgradation Fund Scheme (TUFS)

The Scheme provides a focal point for modernization efforts through technology upgradation in the industry. The salient features of the Scheme are as follows:

Under the Technology Upgradation Fund Scheme (TUFS), interest reimbursement of 5% on the interest actually charged by identified financial institutions on sanctioned projects is permissible and technology upgradation ordinarily means induction of state-of-the-art or near state-of-the-art technology;

The Industrial Finance Corporation of India (IFCI) is the Nodal Agency for Jute sector; and Other than term loans, a number of instruments like Deferred Payment Guarantee Schemes (DPG), lease finance, non-convertible debentures,hire purchase scheme operated by NSIC, etc. have also been additionally covered under the scheme.

(C) Jute Technology Mission (JTM)

The Government approved the Jute Technology Mission (JTM) in 2006,with four mini-missions constituents;the Department of Agricultural Research & Education.Ministry of Agriculture, launched the Mini Mission I of the JTM in 2006. Department of Agriculture & Cooperation, Ministry of Agriculture,launched the Mini-Mission II of JTM in 2006. The Mini Mission III & IV of JTM were launched by the Ministry of Textiles in 2007.

The objectives of JTM are:

  • To improve yield and quality of jute fibre;

  • To strengthen existing infrastructure for development and supply of quality seeds;

  • Improvement of quality of fibre through better methods of retting and extraction technologies;

  • To increase the supply of quality raw material to the jute industry at reasonable prices and to develop efficient market linkage for raw jute;

  • To modernize, technologically upgrade, improve productivity,diversify and develop human resource for the jute industry and

  • To develop and commercialise innovative technology for diversified use of jute and allied fibres.

(d) Non Plan Schemes of Jute Manufactures Development Council (JMDC)

Jute Manufactures Development Council,by virtue of the JMDC Act 1983 and Jute Manufactures Cess Act, 1983, receives collections of Cess on Jute and is mandated to undertake the following activities:

  • Facilitate development work related to jute agriculture with respect to improvement of quality and increase in the yield of jute.

  • Promotes of better marketing and sale of jute.

  • Improves productivity and efficiency of the jute industry.

  • Promotes standardization of jute manufactures.

  • Market development.

  • Sponsors scientific, technological and economic research.

  • Collects and disseminaties information to all the stakeholders in Jute industry,growers, and exporters.

Sericulture and Silk Textile

India continues to be the Second largest producer of silk in the World. Among the four varieties of silk produced, Mulberry accounts for 85% (15610 MT),Eri 11.1% (2038 MT), Tasar 3.3% (603 MT) and Muga 0.6% (119MT) of the total raw silk production in the country.

Sericulture is an important labour-intensive and agro-based cottage industry, providing gainful occupation to around 6.3 million persons in rural and semi-urban areas in India. Of these, a sizeable number of workers belong to the economically weaker sections of society.

Exports

The earnings from Silk Exports during the years 2007-08, 2008-09 and 2009-10 (up to
April-May,2009)are shown below-

Value in US$ million
S.No.
Items of Export
2007-08
2008-09

2009-10 (P)

(Apr-May)

1
Natural Silk Yarn Fabrics Madeups
421.13
472.19
47.32
2
Readymade Garments
165.68
218.95
44.69
3
Silk Carpets
16.00
13.02
1.63
4
Silk Waste
2.69
1.16
0.02
Total
605.5
705.32
93.66

Source: Annual Report 2009-10,Ministry of Textiles

Handlooms

Handloom forms a precious part of the generational legacy and exemplifies the richness and
diversity of our country and the artistry of the weavers. Tradition of weaving by hand is a part of the country's cultural ethos.

As an economic activity, handloom is the 2nd largest employment provider next only to agriculture. The sector with 60.40% about 35 lakh handlooms provides employment to 65 lakh persons.Production in the handloom sector recorded a figure of 6677 million sq. meters in the year 2008-09, which is about 21.55% over the production figure of 5493 million sqr. meters recorded in the year 2003-04.

During 2009-10 (Provisional) production in the handloom sector is reported to be 3942 million sqr.meters (April to October, 2009) as compared to 3875 million sqr. meters during the corresponding period of 2008-09.The sector accounts for 15.9% of the total cloth produced in the country excluding hosiery, khadi, wool and silk during 2008-09.

The table below shows the Cloth Production by Handloom Sector the years 2003-04 to 2009-10 (Apr-Oct):

Year
Cloth Production Handloom
Share of Handloom in the total cloth production
Ratio of
Handloom to Powerloom
(in terms of
production cloth)
Total Cloth Production*
2003-04 5493 16.2 1:4.91 33874
2004-05 5722 16.1 1:4.95 35573
2005-06 6108 15.9 1:5.01 38390
2006-07 6536 15.9 1:5.03 41161
2007-08 6943 16.0 1:4.97 43265
2008-09 6677 15.9 1:5.04 42121
2009-10 (Apr-Oct) 3942 14.7 1:5.55 26844

*The total cloth production includes Handloom, Powerloom and Mill Sector excluding hosiery,khadi, wool and silk.

Handicrafts

The Handicrafts Sector plays a significant & important role in the country's economy. It provides employment to a vast segment of craftpersons in rural & semi urban areas and generates substantial foreign exchange for the country, while preserving its cultural heritage. Handicrafts have great potential, as they hold the key for sustaining not only the existing set of millions of artisans spread over length and breadth of the country, but also for the increasingly large number of new entrants in the crafts activity. Presently, handicrafts contribute substantially to employment generation and exports. This sector has witnessed a significant growth of 3% annually, and efforts are being augmented on the core issues for the development of the sector.

  • Providing Infrastructural support for production & Exports
    
  • Improve quality & product diversification with more awareness for both stakeholders & consumer.
    
  • A greater role for NGO as implementing partners and participation of private resources both human and financial.

Wool and Woollen Textiles

The wool and woollen textiles industry is a rural based, export oriented industry in which the organized sector, the decentralized sector,and the rural sector complement each other. The country is the seventh largest producer of wool and contributes 1.8% to total world production.Of the total production of raw wool, 5% is apparel grade, 85% carpet grade, and 10% coarse grade. Rajasthan (44 percent), Jammu & Kashmir(13 percent),Karnataka (12 percent) alongwith Gujarat, Uttar Pradesh, Andhra Pradesh, Haryana (23 percent) are the major wool producing states in the country.

There are 718 woollen units in the organized sector, and a large number of units in the small scale sector. Ludhiana alone accounts for 225-240 units in the decentralized hosiery and shawl sector.

The installed capacity of the industry is about 6.04 lakh worsted spindles, and 4.37 lakh non-worsted spindles. Wool combing capacity is around 30 million kg., whereas, the synthetic fibre combing capacity is 3.57 million kg. There are approximately 7,228 powerlooms in this industry.

A small quantity of specialty fibre is obtained from Pashmina goats and Angora rabbits. There are 958 woolen units in the country, the majority of which are in the small scale sector. During the XIth Five Year Plan period (2007-12).The Government is implementing the following Schemes for the holistic growth and development of Wool Sector:(i) Integrated Wool Improvement & Development Programme (IWIDP), (ii) Quality Processing of Wool and (iii) Social Security Scheme. The Schemes are being administered in the major wool producing States by the Central Wool Development Board (CWDB), Jodhpur, through respective State Government Organizations / NGOs, Societies,Cooperatives, etc.

The Woollen industry broadly falls under-

Organised Sector

a) Composite Mills

b) Combing Units

c) Worsted and Non-Worsted Spinning Units

d) Knitwear and Woven Garment Units

e) Machine-made Carpet Manufacturing Units

Decentralised Sector

a) Hosiery and Knitting Units

b) Powerloom Units

c) Hand-made Carpets, Druggets, and Namadahs units

d) Independent Dyeing and Process Houses

Status of Wool & Woollen Textiles industry

Total no. of existing units in woollen industry including units in decentralized hosiery and shawl sector
958
Total no. of persons employed including persons associated in sheep rearing and farming sector and weavers in carpet sector
27 lakhs
Total production
US$ 1.88 billion
Total investment
US$ 4.44 billion (Excluding Carpet Sector)
Total Imports
US$ 228.93 billion*
Total Exports
US$ 1.27 billion*

* Woollen yarn & fabric, raw wool and woolen/synthetic rags.
** Woollen yarn fabric, made up set, RMG Wool, Carpet Handmade

Source: Annual Report 2009-10,Ministry of Textiles

Installed Capacity

i (a)
Wool Combing 30 Million Kg.
i (b) Synthetic fibre combing 3.57 Million Kg.
ii Worsted spindles 6.04 lakhs
iii Non-Worsted spindles 4.37 lakhs
iv Powerlooms 7228
v(a) Machine- made carpets 0.50 Mn. Sq. Meter
v(b) Hand-made carpets 9 Million . Sq Meter

Export Promotion Measures

Some of the steps taken by the Government during 2009 to support the textiles and garments industry include the following:

Scheme announced on 2nd January 2009

  • The DEPB Scheme extended till December 31,2009 and resored the rates at those prevailing prior to 5th November 2008.

  • Restored Duty Entitlement Pass Book (DEPB) Credit rates to those prevailing prior to 1st September 2008. However,no benefit to exporters of cotton textiles since there was no reduction the DEPB rates for cotton textiles.
    
  • Decided to remove the all- in- cost ceilings on External Commercial Borrowings.
    
  • Duty Drawback revised rates/value caps with retrospective effect i.e. w.e.f. 1st September 2008.
    
  • Increased value cap for Cotton yarn from US$ 0.18 per Kg to US$ 0.27 per kg for Grey yarn and from US$ 0.31 per kg to US$ 0.35 per kg for Dyed yarn.
    
  • Increased rate of Drawback for Cotton knitted fabrics from 4.5% to 5% and value cap from US$ 0.31 per kg to US$ 0.35 per kg.

Stimulus Package Scheme announced on 24th february 2009

Customs Duty - The facility of exemption from Basis Customs Duty on imports of Naptha for generation of Electric energy is being extend beyond 31st March 2009.

Excise Duty -

  • General Reduction in Excise Duty rates by 4% made w.e.f. 7th December 2008 is being extended beyond 31st March 2009.

  • Further reduction in the rate of Excise Duty by 2%; i.e. from 10% to 8%.

  • Retaining the rate of Central Excise Duty on goods currently attracting Ad-Valorem rates of 8% and 4% respectively.

Service Tax-The rate of Service Tax on taxable services has been reduced from 12% to 10%.

Exemption from Income Tax for SEZ/s-Removed the anomaly in computation of export profits with reference to the total turnover of the assesses in SEZ/s.

Scheme announced on 4th March 2009

The Government announced facility of refund of service tax paid on all input services, irrespective of whether they are consumed inside or outside the zone, to Special Economic Zones (SEZ) units and developers.Previously, the government exempted SEZ developers/units from paying a tax on services that were consumed within the zone.

Major achievements/ activities

  • ‘Jute Festival’ was organized by the Jute Manufactures Development Council (JMDC) at Dilli Haat,New Delhi on March 10, 2010, with a view to increasing awareness about Jute products among consumers.

  • ‘The Global India Textile Show (GITS 2010)-a 'Reverse Buyer Seller Meet’ was organized by the Powerloom Development & Export Promotion Council (PDEXCIL) at Coimbatore on March 26 & 27, 2010. The decentralised powerloom industry welcomed this event as a major marketing effort. Over 80 overseas buyers attended this meet.

  • A seminar on ‘Medical Textiles’ on 24th March 2010 at Vijayawada was organized by the ‘Centre of Excellence in Meditech’ of the South India Textile Research Association (SITRA), Coimbatore, with a view to promoting awareness amongst stakeholders.

  • IIT, Delhi and the Institution of Engineers India organized the 23rd Convention of Textile Engineers on March 26-27, 2010 in New Delhi on 'Innovations in textile products, processes and machines - Key to success and growth.'

  • The German Textile Machinery Manufacturers Association (VDMA) held two workshops in New Delhi and in Mumbai on 11th and 12th March, 2010 respectively to expose the Indian textile entrepreneurs to the state of the art German machinery, especially in the field of technical textiles. This is one step forward in creating greater collaboration between India and Germany in the field of textiles.

  • A Technical Textiles Summit on ‘Investment opportunities in emerging Indian market’ was organized by ASSOCHAM in New Delhi on March 19-20, 2010. The summit aimed at creating awareness about the immense prospects of technical textiles products in India.

  • Textile Association of India, Mumbai, organized an international seminar on ‘Organic Textiles - Ensuring Product Integrity’ on March 12, 2010.

  • A Silk Mark Expo was organized at Hyderabad during March 03-08, 2010. A total of 46 stalls displayed exclusive silk products from across the country. The Expo had about 9,000 visitors.

Interim Budget 2009-10

  • General rate of Central Excise Duty is reduced from 10% to 8%. As a result Central Excise Duty on Textile Machinery is reduced from 10% to 8%.

  • Rate of Service Tax on taxable services is reduced from 12% to 10%.

  • Major supplementary Trade Facilitation Measures announced on 26th February,2009 under Foreign Trade Policy 2009-2014.

  • US$ 72.08 billion provided under promotional schemes for leather,textiles etc., for exports made with effect from 1st April 2009. It is in the form of 2% duty credit scrip of free on board (FOB) value of exports under market linked focused product scheme exclusively for exports into US and EU.

  • Benefit of 5% duty credit script of FOB value of exports under Focus Product Scheme has been notified for exports of handmade carpets, in lieu of 3.5% benefit allowed earlier under VKGUY scheme (Vishesh Krishi and Gram Udyog Yojana).

  • Technical Textiles has been added under High-Tech Products Export Promotion Scheme and now entitled to duty credit scrip equivalent to 1.25% of FOB value of exports.

  • Under EPCG scheme, in case of decline in exports of a product by more than 5%, the export obligation of that product is to be reduced proportionately. This provision has been extended for the year 2009-10, for exports during 2008-09.

  • DEPB/Duty credit script utilization extended for payment of duty for import of restricted items also.

  • Procedure for claiming duty drawback refund and refund of terminal excise duty further simplified.

  • Re-credit of 4% Special Additional Duty (SAD), in case of payment of duty by incentive scheme scrips such as Vishesh Krishi And Gram Udyog Yojana (VKGUY), Focus product and Focus Market, was allowed.

  • Export obligation period against Advance Authorizations extended up to 36 months.

  • Permitted supply of intermediate product/s by the domestic producer directly from the factory to the port of shipment against Advance Intermediate Authorization.

  • Dispensed with the requirement of MODVAT/CENVAT certificate in cases where the Customs Notification itself prescribed for payment of CVD,inrespect of Advance Licences issued prior to 1st April 2002.

  • Export House - Reduced the threshold limit for recognizing Premier Trading Houses from US$ 2.22 billion in the preceding three years and current year to US$ 1.66 billion.

Policy Initiatives

National Textile Policy 2000

The Government has formulated a National Textile Policy (NTP) 2000 with the objective of facilitating the industry to attain and sustain a pre-eminent global standing in the manufacture and export of clothing. Through NTP 2000, the Government would endeavor to achieve the target of textile and apparel exports from the present level of US$11 billion to US$ 50 billion by 2010. The policy provides for setting up a venture capital fund for tapping knowledge-based entrepreneurs and assisting the private sector to set up specialized financial arrangements to fund the diverse needs of the textile industry.

Vision of the policy

Endowed as the Indian Textile Industry is with multifaceted advantages, the policy of the Government is to develop a strong and vibrant industry that can:

  • Produce cloth of good quality at acceptable prices to meet the growing needs of the people;
  • Increasingly contribute to the provision of sustainable employment and the economic growth of the nation; and
  • Compete with confidence for an increasing share of the global market.

Objectives of the policy

The objectives of the policy are to:

  • Facilitate the Textile Industry to attain and sustain a pre-eminent global standing in the manufacture and export of clothing;
  • Equip the Industry to withstand pressures of import penetration and maintain a dominant presence in the domestic market;
  • Liberalise controls and regulations so that the different segments of the textile industry are enabled to perform in a greater competitive environment;
  • Enable the industry to build world class state-of-the-art manufacturing capabilities in conformity with environmental standards, and for this purpose to encourage both Foreign Direct Investment as well as research and development in the sector;
  • Develop a strong multi-fibre base with thrust of product upgradation and diversification;
  • Sustain and strengthen the traditional knowledge, skills and capabilities of our weavers and craftspeople;
  • Enrich human resource skills and capabilities, with special emphasis on those working in the decentralised sectors of the Industry; and for this purpose to revitalise the Institutional structure;
  • Expand productive employment by enabling the growth of the industry, with particular effort directed to enhancing the benefits to the north east region;
  • Make Information Technology (IT), an integral part of the entire value chain of textile production and thereby facilitate the industry to achieve international standards in terms of quality, design and marketing and;
  • Involve and ensure the active co-operation and partnership of the State Governments, Financial Institutions, Entrepreneurs, Farmers and Non-Governmental Organisations in the fulfillment of these objectives.

Full text of the policy

Natonal Jute Policy 2005

The Government has announced comprehensive National Jute Policy 2005 with a view to develop a strong and vibrant jute sector. The policy enunciates that the approach for the jute sector will be directed towards reviving the jute economy through supportive measures such as research and development, technology upgradation, creation of infrastructure for storage and marketing of raw jute and product and marketing development activities for jute and diversified jute products.

Vision of the policy

Endowed as the Indian Jute Sector is with multifaceted advantages, it shall be the policy of the Government to develop a strong and vibrant sector that can:

  • Ensure remunerative prices to the jute farmers in the country;
  • Produce good quality fibre and products to meet the growing needs of the country and international buyers;
  • Increasingly contribute to the provision of sustainable employment and the economic growth of the nation; and
  • Compete with confidence for an increasing share of the global market.

Objectives of the policy

The objectives of the policy are to :

  • Enable millions of jute farmers to produce better quality jute fibre for value added diversified jute products and enable them to enhance per hectare yield of raw jute substantially;
  • Facilitate the Jute Sector to attain and sustain a pre-eminent global standing in the manufacture and export of jute products;
  • Enable the jute industry to build world class state-of-the-art manufacturing capabilities in conformity with environmental standards, and, for this purpose, to encourage Foreign Direct Investment, as well as research and development in the sector;
  • Sustain and strengthen the traditional knowledge, skills, and capabilities of our weavers and craftspeople engaged in the manufacture of traditional as well as innovative jute products;
  • Expand productive employment by enabling the growth of the industry;
  • Make Information Technology (IT), an integral part of the entire value chain of jute and the production of jute goods, and thereby facilitate the industry to achieve international standards in terms of quality, design, and marketing;
  • Increase the quantity of exports of jute and jute products by achieving a CAGR of 15% per annum;
  • Involve and ensure the active co-operation and partnership of State Governments, Financial Institutions, Entrepreneurs, and Farmers’ Organisations in the fulfillment of these objectives.

Full text of the policy

FDI Policy

As per the present policy of Government of India, 100 percent FDI is freely allowed in spinning, weaving, processing, garments and knitting sector under the automatic route for both new ventures and existing companies except in cases where industrial license is required on account of location of such units falling in a locatioanlly restricted area. In respect of such proposals, government approval is required.

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