AEPC chairman Bharat Goyal said here that processing units should be given incentives in the form of 100 per cent depreciation from the first year of installation and allowed to import machineries free of duty. Also, sales tax and income tax exemptions and disbursement of interest free loans up to 50 per cent of the investment payable in easy instalment should be provided.

The urgent need to modernise textile processing industry in the country is being widely acknowledged even among textile ministry's planners. The Technology Upgradation Fund (TUF) too lays emphasis on this. However, the textile industry is yet to make any significant strides in charting out strategies to build up a world class processing industry.

Goyal, who was talking at the inaugural function of 8th India Knit Fair, said AEPC has also recommended for bringing down threshold limit of Rs one crore applicable for import of machinery by the garment industry under the zero per cent EPCG route to Rs 50 lakh. AEPC has suggested to the Centre to bring down export credit interest rates so that they are at par with those in competitor countries like China, Thailand, Indonesia, Malaysia, Vietnam and Philippines.

The AEPC chairman announced the Council's decision to provide Rs one crore towards the proposed Apparel Training and Development Centre (ATDC) in Tirupur. The Tirupur Exporters' Association (TEA) which mooted the idea would chip in Rs 1.50 crore towards the establishment of the centre. The first tranche of Rs 33 lakh would be disbursed soon, Goyal said.

Meanwhile, the textile industry's opposition to the suggestion that garment industry should no longer be under the SSI category found support from the local BJP Member of Parliament C P Radhakrishnan. The Sathyam Committee in its report on a new textile policy is reported to have suggested removal of reservation of the industry under the SSI category. Moreover, there is an opinion that continuation of the industry in the SSI category would hamper further modernisation.

Radhakrishnan, himself a knitwear exporter, urged the Tamil Nadu government to take up the matter seriously with the Centre. ``There should be some flexibility. The industry should continue to enjoy the reservation. A ceiling can be fixed if needed,'' he added. The industry fears that entry of organised players would force the smaller ones out of business.