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NEW DELHI, JUN 9 (TickerNews Service): The Indian government plans an investment of Rs 1.76 trillion in the next 10 years to increase natural and man-made fibre production, Textiles Minister Dayanidhi Maran said Wednesday.
The investment plan is set out in the draft copy of National Fibre Policy that was put on the ministry's website a day earlier.
Yarn spinning mills alone would use a big chunk of Rs 635.25 billion of the total outlay, Maran told reporters detailing main features of the NFP.
The balance is proposed to be used to modernise and expand the capacity of weaving, knitting, processing and garments industries, Maran said.
He emphasized the urgent need for capacity expansion and modernisation to encash the rising demand for textiles from western countries whose textiles output have come down because of labour shortage and high production cost.
"Textile mills and spinning factories are moving (to) markets where labour costs are low," Maran said, stressing that new policy aims to take advantage of this trend in developed countries.
India's textile industry is the world's second largest, accounting for 14% of total industrial production and 4% of the GDP.
It is also the world's second largest cotton producer, next to U.S.A.
"The (new fibre) policy would help our domestic textile industry grow manifold," Maran said without detailing numbers.
The proposed fibre policy gives priority to growth and production of cotton fibre.
RUSH FOR COTTON EXPORTS
Cotton exports have become attractive because of the large gap between export and domestic prices, said Maran, proposing to increase the export duty to discourage cotton and cotton yarn exports.
Currently, the government regulates cotton exports. Besides, a duty of Rs 2,500 per 1 tonne is levied on cotton exports.
"A decision (on the duty hike) is expected soon," he said.
The duty hike would be decided by the revenue department in consultation with the commerce and industries and the textiles ministries.
Maran said the recent spurt in cotton exports was also due to 15% fall in China's cotton production.
Government plans to moderate cotton exports so that the carry forward stock at the beginning of the next season in September there is an opening stock of 5 million bales (1 bale is 170 kg).
Despite opposition from farm lobbies, the government wants to discourage cotton exports, as it wants cotton to be used domestically and export mostly value-added products.
As part of that aim, the government has also withdrawn incentive on cotton exports by withdrawing the 7.67% Duty Entitlement Passbook Scheme.
In Oct-Apr--the first seven months of the current cotton year--India exported 7.36 million bales, up nearly 280% from the year earlier period, according to the website of the textile commissioner.
SPURT IN COTTON PRICE
Last month, cotton was trading at Rs 29,800 a candy (1 candy is 356 kg), the highest level in the 2009-10 (Sep-Aug) season because of tight domestic supply and strong overseas demand.
As with cotton, the government also seeks to discourage the export of yarn through measures such as yarn export registration and verification.
Under the proposed policy, government would aim at improving quality of cotton fibre and warehousing facilities, and marketing and branding of cotton as envisaged, he said. (End)
09 June, 2010 by admin