NEW DELHI: A stitch in time saves nine, goes the famous saying, but the rapid rise in rupee value caught India's textile exporters almost off-guard in the year gone by as they struggled to remain globally competitive.
Textile firms not only fought the hardening rupee, but also had to bear high interest, raw material costs and poor infrastructure in the year they will not forget in a hurry.
While 2007 began on a promising note with government extending the popular Technology Upgradation Fund Scheme for the 11th plan period, the jubilation did not last long.
The over 12 per cent rise in rupee against the US dollar began eating into profits of textile exporters, with many units forced to down shutters as they failed to cope with the rupee rise. The sector, one of the biggest job generators, was among the worst-hit due to the decline in dollar value.
The government had set an export target of USD 25 billion for 2007-08. However, impact of an appreciating rupee was there for all to see when during the first quarter, exports of textiles and clothing declined over 14 per cent to USD 4.01 billion. In April alone, exports fell 18.23 per cent. Textile exports in 2006-07 stood at USD 18.73 billion, falling short of the targeted USD 19.73 billion by about five per cent.
Faced with declining profits and exports, textile exporters were forced to lay-off workers on a large scale.
"The entire textile and clothing industry is going through a grave crisis. About 35,000 jobs have been lost and the number may run into several lakh by the year-end if corrective measures are not taken," Confederation of Indian Textile Industry Chairman P D Patodia said. Exports would fall short of the target by USD 7 billion, he added
Falling margins and exports saw the industry indulge in hectic parleys with Commerce Minister Kamal Nath, Finance Minister P Chidambaram and even Prime Minister Manmohan Singh.
Of the over Rs 5,200 crore relief package doled out by the government for the exporting community, textile industry saw some succour in the form of upward revision of duty drawback and duty entitlement passbook scheme rates and import duty cuts on man-made fibres and their intermediates.
Textile firms not only fought the hardening rupee, but also had to bear high interest, raw material costs and poor infrastructure in the year they will not forget in a hurry.
While 2007 began on a promising note with government extending the popular Technology Upgradation Fund Scheme for the 11th plan period, the jubilation did not last long.
The over 12 per cent rise in rupee against the US dollar began eating into profits of textile exporters, with many units forced to down shutters as they failed to cope with the rupee rise. The sector, one of the biggest job generators, was among the worst-hit due to the decline in dollar value.
The government had set an export target of USD 25 billion for 2007-08. However, impact of an appreciating rupee was there for all to see when during the first quarter, exports of textiles and clothing declined over 14 per cent to USD 4.01 billion. In April alone, exports fell 18.23 per cent. Textile exports in 2006-07 stood at USD 18.73 billion, falling short of the targeted USD 19.73 billion by about five per cent.
Faced with declining profits and exports, textile exporters were forced to lay-off workers on a large scale.
"The entire textile and clothing industry is going through a grave crisis. About 35,000 jobs have been lost and the number may run into several lakh by the year-end if corrective measures are not taken," Confederation of Indian Textile Industry Chairman P D Patodia said. Exports would fall short of the target by USD 7 billion, he added
Falling margins and exports saw the industry indulge in hectic parleys with Commerce Minister Kamal Nath, Finance Minister P Chidambaram and even Prime Minister Manmohan Singh.
Of the over Rs 5,200 crore relief package doled out by the government for the exporting community, textile industry saw some succour in the form of upward revision of duty drawback and duty entitlement passbook scheme rates and import duty cuts on man-made fibres and their intermediates.
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