High interest, raw material cost hit textile industry

All these factors, the Survey noted, lead to a decline in textile fabric production by 1.9 per cent to 54,966 million square metres in 2008-09.

The powerloom and handloom sector saw a decline in production by 3.1 per cent and 3.9 per cent, respectively, in 2008-09 over the year-ago period.

"Factors such as higher price of cotton, high interest rates, problems in credit availability and demand slowdown in major importing countries led to the decline in cotton textiles," the Survey said.

However, the hosiery industry saw a modest increase of 2.3 per cent and the mill sector registered a marginal growth rate of 0.8 per cent in the last fiscal compared to the previous year.

With export orders drying up and domestic demand slackening, the industry is going through difficult times. India's textile exports have declined by 5.31 per cent, Textile Minister Dayanidhi Maran said and assured that the government has initiated steps to mitigate the adverse impacts of slowdown in the sector.

"India's textile exports have marginally declined by 5.31 per cent during April-February 2008-09 over the corresponding period of previous financial year," Maran said in reply to a question in the Lok Sabha.

He assured the House that the government was constantly monitoring the situation and after analysing the impact of the stimulus packages, further appropriate action would be taken.

The manufacturing sector in India was facing the impact of the global economic slowdown, he said adding, the government is conscious of any possible job loss in the textile sector and has taken steps in the form of relief and concessions.

"These steps will mitigate the adverse impact of global economic slowdown on Indian textile industry. The government is constantly assessing the situation and will act positively whenever required," Maran said.

To a question about closure of NTC Mills, Maran said refabrication and revival was on to make these operative. Seven NTC Mills, including four in Mumbai, will be re-opened, he added.

"Factors of the slowdown are not under our control. The slowdown in the US and European Union markets had a tremendous impact," he said.

Maran informed the House that though there was a slowdown in exports, the domestic market was upbeat. He said two stimulus packages have been announced by the government. Under the 'Look East' policy, India was planning to explore the Japanese and Australian markets, Maran said.