The Council felt that the consequences could be serious if the government failed to read the emerging global scenario following the formation of several regional trade blocs. "The cost advantages that our goods have will be eroded due to duty preferences given to countries of these regional blocs. The competition in the world market is intensifying with international prices coming under pressure. We are already feeling the pinch," Texprocil chairman T Kannan said.

According to Mr Kannan, the tendency to form such regional trade blocs, extension of preferential trade arrangements and emergence of new suppliers are threatening to erode India's market share. The same issue was earlier raised by others too, including the Tirupur Exporters Association (TEA).

The TEA had pointed out competition from countries enjoying preferential trade arrangements as a major reason for poor unit value realisations. The advantages enjoyed by countries within regional blocs vis-a-vis those outside resulted in trade imbalances.

In his plea to the government, the Texprocil chief has called for immediate rationalisation of domestic and export policies to harness the inherent advantages of the textile industry.

"Major textile exporting countries in the world like China, Pakistan, Thailand, Bangladesh, Sri Lanka and Korea have embarked on major restructuring programme to face the challenges ahead. We, being the largest producer of cotton, second largest producer of cotton yarn and the largest exporter of cotton yarn need visible results," he added.

Sounding an alarm bell on the deteriorating quality of cotton and fall in cotton production growth, the Council has sought the formation of a separate agency to ensure quality control of cotton and cotton seed at various stages. Extensive mixture of various seeds and high contamination levels forced the industry to import expensive cotton.

Among other things the Council has sought duty free import of wider width looms and import of used machinery under the EPCG scheme, reduction of import duty to 5 per cent (from 15 per cent) for textile machinery and special incentives to the processing industry through TUF.