A report earlier this week from Indian Minister of State for Textiles Smt. Panabakka Lakshmi indicated that, following a weak fiscal 2011-12, the Indian textile industry was seeing a resurgence in fiscal 2012-13.
By way of justification for this optimism, Lakshmi pointed to the recent increase in the price of cotton yarn, a commodity whose rapid, 2011 decline in value left many textile industry players with overpriced inventories that tied up capital throughout the year. However, Lakshmi has stated that as the price of cotton yarn rebounds and the rupee undergoes a timely depreciation, Indian textile manufacturers will see a healthy, yearlong resurgence.
In addition to the rising price of cotton yarn, Lakshmi touted the Indian government’s ongoing textile industry enrichment programs as further cause for optimism.
Both the Technology Upgradation Funds Scheme (TUFS) and the Scheme for Integrated Textile Parks (SITP) have received funding boosts for 2012-13, a result of the Textile Ministry’s plan allocation budget being expanded from Rs. 8,000 crore to Rs. 15,404 crore, per the terms of India’s 11th Five-Year Plan.
The TUFS program incentivizes investment in India’s textile industry by offering an interest reimbursement scheme for textile investors, whereas the SITP program helps to establish physical infrastructure for use by textile manufacturers.
Lakshmi also endorsed the government’s debt restructuring plans as being beneficial to the textile industry. Last year, the Indian government approved debt restructuring for some 307 textile mills and 200 ready-made garment (RMG) factories. The loans eligible for restructuring are to be selected by banks on a case-by-case basis.
Lakshmi stated that cotton yarn production in India has already shown a resurgence from its anemic, 2011-12 levels, though the minister did not offer figures to support this claim.