With the free market on the anvil, India is betting on capturing a much larger chunk of the global textiles market, at the expense of some fellow Asian nations. Last year, the Indian textile exports to the European Union amounted to 3.7 bn euros, almost 38 per cent of the entire Indian exports of 9.8 bn euros to the EU. The exports, after growing at 8 per cent in 1997, had plateaued at almost the same level,largely due to the depreciation of the Asian currencies that rendered Indian exports more expensive.

Despite this, a large number of complaints were received by the EC from various EU textile manufacturers -- mainly from France and Portugal -- that the Indians had been dumping their products. The EC initiated action on several of these casesand recommended to the Council of Ministers -- the body that has to take the final decision on levying any anti-dumping or anti-subsidy duties. Of these, only in one case, involving unbleached grey cotton fabric, did the council reject the recommendation and refused to impose the duty.

The going may continue to be tough for the Indian textile industry for some time to come. However, there is already light at the end of the tunnel. The current MultiFibre Agreement that governs the global textile trade is scheduled to come to an end in 2004, greatly liberalising this trade.

Currently, each textile exporter has a certain quota that limits the amount of exports that its industry can make into a particular market.

``This quota has proved to be a double edged sword. While it guarantees you a market, it also limits the extent to which you can exploit the market,'' says an Indian textiles ministry official, who was recently touring Paris to participate in the International Textile Machinery Expo.

Agreestextiles secretary, Shyamal Ghosh, ``China last year exported nearly 30 bn dollars of garments alone and our total textile exports were barely 13 bn dollars. There is no reason why we can not do as well as them. Indian textiles are very competitive and we can edge out countries like Korea and Taiwan but we can touch their quotas and hence our exports don't do as well as they could in a free market.'' And it is just with that aim in mind that the Indian government has launched an ambitious programme that will see Indian exports rise sharply in the years to come. With the quotas set to vanish in 2004, India sees a huge opportunity for a quantum jump in exports to gain a huge market share in the EU region.

The first stage was to identify the problem with Indian exports. That is quality and value addition. ``Our costs are fine. The labour costs, the cost of raw material is all competitive. Our manufacturers lose out due to technology and due to high cost of capital. We are trying to solve this problemimmediately,'' says Ghosh. To help the textile industry become technological up to date, the government has launched the Technology Upgradation Fund Scheme that will provide capital at globally competitive rates to companies wishing to update their technology. The scheme will give a five per cent break on interest costs and Ghosh estimates that as much as 250 bn rupees could be disbursed through this scheme that is set to continue till March 2004.

With new technology, the Indian manufacturers can not only ensure higherproductivity but also move higher into the value chain. Our future export growth has to come from more value rather than just more volumes, asserts Ghosh.