Speaking to The Financial Express, at length among other issues, Ganesh Kumar Gupta, chairman of SRTEPC feels that post-credit denominated in foreign currency (PSCFC) introduced by the earlier finance minister Manmohan Singh should be re-introduced to boost synthetic exports. Excerpts:

On itsIndian textile show to be held in Sri Lanka
The council has always been associated with trade and other promotional activities both in India and abroad which is one of the main activities of the council. At present, we are planning to organise an exclusive Indian textile show in Sri Lanka. This is in association with the High Commission of India, and the fair will be held next month between September 9 and September 11 at the Hotel Oberoi in Colombo. About 25 Indian companies will participate in the show with their latest range of synthetic, rayon and blended textile items including fabrics, made-ups and yarns. A delegation from the country would be visiting Sri Lanka on the occasion of the show and would hold interactive meetings with the country's ministers of international development and trade and chairmen of leading textile associations. The objective of the show is to create an awareness about the wide range of Indian synthetic and blended textiles, apart from exports.

On the recent fall inPOY imports
There has been a fall recently in the imports of POY in India. At present, POY is available in abundance in the country and at cheaper prices than imported ones. The price differential coupled with the lack of demand were the reasons for the fall in the domestic demand for POY. At present, there is no stability in prices and there is no steady market for it in the country. Earlier, when the prices registered an upward trend, the industry hoped that the market would stabilise, but contrary to our beliefs it has only deteriorated further.

On synthetic fibres that has displaced the use of cotton at home
Earlier cotton used to be the most wanted fibre around the globe. But at present, with the emergence of different varieties of synthetic textiles, cotton as well as silk are getting displaced. Globally about 60 per cent of the trade is done in synthetics alone and this is on the rise now. In the long run, synthetics would emerge the most sought after material.

Of course, this willhave a negative impact on the cotton industry, like there would a fall in production and prices, resulting in the closure of the few more mills.

On competing with other international players on exports
Exports from the country are doing well at the moment and as far as quality is concerned, we are at par with our competitors.

But still we are not in position to compete with other countries like Thailand, Taiwan, Korea and Pakistan as their products are cheaper, price-wise. In the long run, unless our products are cheaper, or to be precise, priced at par with competing countries, India doesn't have a chance in the global markets.

At present due to the price factor all the export promotion activities have gone haywire. Post-export finances in other countries are comparatively cheap, resulting in their products selling in the international markets

On the performance of domestic man-made fabrics
Even though most man-made fabrics are doing well in the country the same is not the casewith yarn.

Man-made fabric mills in Surat and Silvasa are facing problems. Policies and procedural hassles are the biggest problems faced by this sector. The induction of a new policy on December 16, 1998-compounded levy-is at present playing havoc with this industry. The policy fails to explain how the yarn excise duties will be refunded to exporters. The export duties have not yet been refunded, resulting in considerable losses to an exporter. Even other levies like excise, state taxes and octroi aren't refunded either.

Apart from this, other cumbersome procedures coupled with slowdown in the domestic market is also hampering the growth prospects of this sector.

On the crossing-the-floor by Indian synthetics and rayon exporters to domestic trading
Earlier domestic traders were keen to become exporters, but now the tables have turned and exporters prefer trading to exporting. But at present policy changes which hamper trade has made an exporter wary of committments.Apart from the policy andprocedural hassles which takes months to get clarified, there are other risk factors. An exporter is not sure whether the government would withdraw the present benefits, or hike taxes and duties after a commitment is made to the buyer and this has happened in the past causing commitment failures to clients besides dishonour and financial losses. Interest rates are also very high in the country and the government charges about 20 per cent of the bill when it is overdue.

On the labour costs in the country
The labour costs in the country are relatively higher, compared to our competitors like Pakistan, Thailand and Korea, but this doesn't affect our industry. Most of our production units being mechanised is not at all labour-oriented and utilises only minimum labour.

On anti-dumping and anti-subsidiary duty investigations instituted by the EU and Turkey
The anti-dumping and anti-subsidiary duty investigations by the European Union (EU) on Indian products, has been awarded in our favour.The EU is under the impression that the government of India is giving subsidiaries to the country's exporters, which is not true. The government is only paying the expenses incurred by an exporter when certain goods are exported. These are not subsidies, even under the Duty Entitlement Pass Book (DEPB) scheme we are only getting a part of the duty. This is reimbursed by every country in the world. Turkey is also planning to slash anti-dumping and subsidiary duties on various duties on our products. We are planning to fight against this and has recently appointed a lawyer for the same. I feel that the Government of India, on diplomatic level, should convince these countries that these investigations are uncalled for. On your recent suggestions to the government to re-introduce post-shipment credit denominated in foreign currency (PSCFC)

The present rate applicable for export finance is 10 per cent for one to 90 day periods and 12 per cent for 90 to 180 days, which is very high. The overdue interest is alsovery high at about 20 per cent.

When Manmohan Singh was the finance minister (1991-1995), he introduced the PSCFC schme, under which post-finance was available at 6.5 per cent. During this period, the exports from the country touched its zenith. I really feel that with the re-introduction of this scheme, exports from India would rise, especially that of synthetics and other man-made fibres. In my opinion the Reserve Bank of India and the government should review the situation and come up with new policy to help the industry or re-introduce PSCFC.