In a proactive move, the Government is preparing a series of measures that will benefit the Textiles industry and remove clogs to increase its competitive against the Chinese when trade restrictions on China will be lifted by 2008.
Among the slew of measures to be presented to a Group of Ministers (GoM) will be:
-- Duty free import of furnace oil for textile units in pre-identified clusters
-- Continue with the Additional Excise Duty regime instead of value added tax to avoid complex calculations of various inputs at different stages
-- Treating textile industry as a public utility service to enable equitable handling of industrial disputes
-- Flexibility in labor laws covering textile export units including a 100-day minimum employment guarantee by industries
-- Raise weekly work rate to 60 hours that will provide flexibility for overtime but also protect laborers from over-exploitation
While these positive steps are being considered, a bear market is eclipsing the raw cotton market. The Government projects a 24.25 million bales (1 bale = 170 kilograms) of cotton production and that productivity per hectare has risen from 399 kilograms to 463. Experts say that the availability of lower cost cotton from the United States has cornered most export market -- primarily China. With that country buying cheaper American cotton and not releasing new orders, there is an excess supply causing sluggishness in the market.
