E ven after a slash in import duty on cotton, the textile industry still seems to be reeling under high-cost pressures. To ease the tightened noose on input costs, the Confederation of Indian Textile Industry (CITI) has made representations with the union Ministry of Textiles for continuance of interest subvention on packing credit across the industry's value chain. The textile industry, which contributes around 17 percent to total exports, had been enjoying a 4-percent interest-rate reduction on packing credit.

However, with the Reserve Bank of India issuing a notice for a premature termination of the interest subvention from Sept. 30, 2008, onward - instead of from March 31, 2009, as announced previously - exporters will have to access credit at market rates. Textile exporters get a packing credit, which functions as their working capital on the basis of their order books around 180 days before shipment and 90 days after shipment.

The relative equilibrium in global fiber consumption is the object of constant change. In the recent past, reference was almost always made to a ratio of around 50:50 between natural and man-made fibers. At present, cotton only has a 37-percent share of global fiber consumption. The use of technical textiles and nonwovens plays an outstanding role in this connection. Experts predict that by 2010, man-made fibers will have a global market share of 72 percent; cotton, 26 percent; and wool, 2 percent. Long-staple fibers have enormous potential but are insufficiently exploited by the countries capable of producing them. Jute and other bast fibers are biodegradable and therefore enjoy a major sympathy bonus. This advantage should be used to a far greater extent by the respective governments. It can only be a matter of time before India's textile industry will awake from the actual economic situation. It's time to consolidate and get ready for the next upswing.

September/October 2008