``It is apparent that the textile and clothing sector in India will be undertremendous pressure to survive in the new world scenario without fundamentalchanges and it will be increasingly exposed to imports, and exports willface increasing resistance,'' a study by Roland Berger, an internationaltextile consulting organisation has said.

As differential lower duty enjoyed by member countries within trading blockswill act as a source of cost advantage, India not being part of anysignificant group and the threat from the South Asia preferential tradearrangement (Sapta) trading region would be an area of concern, the studysaid.

The problem of cheap import of textile item would be compounded by India'sdecision to remove quantitative restriction (QR) by 2002 and substantialreduction in import duties, Berger said, adding the over-regulation of thesector would further cripple the ability of the domestic industry to resistcompetition.

The study sponsored by the Confederation of the Indian Industry (CII) said,``the threat is greatest from East Asian economies that have establishedsignificant scale in synthetics and modern high volume weaving facilities.In the garment sector, the removal of licence constraints combined with thereduction in tariffs would result in imports of value-added garments fromthe developed countries and that of lower cost garments through liberalcross-border trade flows from low-cost neighbouring countries, Bergersaid.

The study has forecast an investment requirement of a whopping Rs 72,000crore in the next five years to enable India gain a global market share ofsix per cent in garments. According to Roland and Berger, the main areas ofinvestment would be weaving, garmenting and processing, spinning andknitting sectors.

``Requirement of this scale of investments is a clear indication that Indiacould not make all the investment efforts on its own. There is a strong casefor attracting foreign investment in this sector to supplement the effortsof the domestic industry,'' Berger said.

In its efforts to boost exports of textile items, India should enhance theshare of made-ups as no significant increase in the volume of the yarnsector was expected in the coming years, the study said. In order to achievea growth level of 20 per cent per annum, the role of synthetic and blendedgarments would have to be raised as the growth in cotton garments willbecome difficult, Berger study said.

The study has also advocated de-regulation of the retail sector for thedevelopment of the entire garment sector, saying, ``supporting factors forthe development of organised garment retailing are comparable and possiblystronger than for food retailing.'' Calling for drastic changes in thegovernment policy towards the textile sector, including dereservation of theknitting and garments sectors, Berger said removal of investment ceiling inthe SSI sector would go a long way in removing the impediments for growth inthe textiles sector.

``The de-reservation of knitting and garments is crucial to ensure thatdomestic companies are able to exploit domestic market potential andhandloom must focus on value-added artisan products to realise betterprice,'' the study said.

``Simultaneously, regulation of the cotton yarn sector requires to bereduced, considering that the controls were established to support thehandloom sector, which is now declining in importance,'' it said. The Rolandand Berger study has also underlined the need for making Indian companiescompetitive in the global arena as a critical factor for raising the shareof garment exports from the country.

The study has suggested ``cotton crown'' as a brand for Indian clothesabroad linking companies with best financial and technical capabilities topopularise quality products overseas.

The study has also forecast that with the implementation of the agreement ontextiles and clothing (ATC) by 2005, the trade opportunities in clothing wasset to touch 350 billion dollars by 2005 compared to just 240 billiondollars worth of textiles.