Thakersey visits this week to ITMF "primarily to know what's in store for Indian players in the next millennium" when the quota system is being dismantled by 2004-5. He'll go to Zurich but is not too happy with things on the home front. "The lopsided policies of government has prevented the industry taking its due place in the global market," he tells The Financial Express. Excerpts:

On domestic textile exports and how they compare with the global trade

Exports of textiles,excluding jute, handicrafts and coir was placed at $10.530 billion in 1997-98 and targeted to touch $12.045 billion this year, but will be difficult. The performance till June is said to be just around $2.520 billion. Against this, the global trade in textiles in 1997 was $155.28 billion and $176 billion for clothing. Combined trade in textiles and clothing by 2004 is expected to reach $495 billion by 2004. If we aim to increase our share in the global trade from three to five per cent, India will have to achieve exports of $25 billion. After taking into account value addition, this may be achieved.

Additional production of export-worthy fabrics of around 6,000 square metres will have to be generated in the weaving/knitting sectors.

On whether powerloom and small-scale sectors will help achieve targets

There's large weaving capacity in the powerloom sector, thanks to the supportive policies of the small scale sector. However, if we are to meet the tall, but achievable, export target the industrywill require to install sophisticated machinery, the lead for which will have to come form the organised sector as the small scale sector will not be able to do so.

However, the organised sector currently finds itself constrained by the lopsided policies of both the central and the state governments.

On what is expected of the government to achieve targeted exports

First and foremost, the government will have to identify whether it intends to consider textiles exports a thrust area. Only then will it be able to consider export-boosting policies in totality and not piecemeal. The Textiles Upgradation Fund (TUF) and the supposedly financing activities to the textiles sector under this merely will not help, for, there are various anomalies in the TUF's provisions and the lending norms too are very tough.

At least one provision under TUF could be mentioned here which calls for investing in imported machineries which are decades old in the international markets.

Also, there is undue protectiongiven to powerlooms in the small-scale sector at the cost of composite mills in the organised sector. The players in small-scale sector not only evade taxes to be competitive, but will also not be able to meet the demands of global markets. Because of these policies, composite mills are facing closure and promoters of leading mills are moving out of the sector to other more profitable sectors.

Because of the lack of common policy for all sectors of the textiles industry, fiscal distortions are rampant. The current excise structure for textiles is replete with numerous exemptions and concessions to various segments in the small scale sector.

On steps to be taken to achieve international standards in textiles

For this we will have to reconsider the policy framework as a whole, while also consider the issue of mergers and acquisition. Looking at the fragmented and disintegrated structure of the industry it will take some time for this to set in. However, a beginning can be made by creating textileclusters by collaborating and cooperating with upstream and downstream sectors in the industry. Such experiments have succeeded in countries like Italy, Honk Kong, Japan and South Korea.

Above all, the garments sector which is reserved for small scale sector has to be dereserved for big players in the organised sector if we are to compete in the international markets. There are no sectoral reservations in countries like Bangladesh, China, Pakistan, Sri Lanka, Turkey and South Korea which are our main competitors. Emerging suppliers like Bangla Desh, Sri Lanka and Vietnam are forging ahead in grabbing larger shares in global clothing exports.

On India's place within the emerging trading blocs

There are very few, if ever, friends that India can bank upon in the international market. India, not a member of any trading bloc, not even SAARC, is in a very disadvantageous position. Almost 60 per cent of global trade in textiles/clothing is accounted by USA and EEC which have their own trading blocs. USAhas its own preferential treaty with NAFTA countries, while EEC has it with its members. Because of these the trade between these blocs has gone up considerably.

It is because of this that Indian government will have to consider an integrated action plan to give a boost to the textiles exports. The industry has been repeatedly pressing for a level playing field to encounter the emerging challenges. But nothing significant has been done so far at the ground level.

On quota issues that hamper textile export growth

Till quotas are eliminated by 2005, the government needs to allocate quotas for EEC on the basis of square metres and not on kilograms. Fabrics which can realise over Rs 30 per sq metres are deprived of quotas as the allocation system is based on kg. Chinese quota allocation policy favours high value exports.

On the rising textiles imports

The overall imports of textiles is rising and are currently placed at Rs 1,836 crore. Rising clandestine imports of textiles areunder-invoiced from some of the SAARC countries itself and the government is appraised of the facts with figures.