Washington: The United States sees opportunities for growth in its trade and investment in India's textile and apparel industry following New Delhi's decision to allow up to 100 per cent foreign investment in the sector without any export obligation.

The US International Trade Commission (ITC) has published a study on India's national textile policy 2000 in which the ITC cites the opening of the country's apparel sector.

It examines India's textile and apparel industry in terms of structural anomalies and other key factors that inhibit its growth and competitiveness, government programs designed to help improve its competitiveness and product sectors that offer opportunities for increased US trade and investment.

An ITC release says ITC but they generate its staff research studies do not reflect the views of the US International Trade Commission or of any individual commissioner.

As India steps into a quota free regime by January 1 2005 and removes market access barriers at home under its World Trade Organisation (WTO) commitments, it points out the Indian government has taken measures to enhance the competitiveness of the Indian textile and apparel industry.

It says these measures include establishing a $ 6 billion Technology Upgradation Fund to upgrade the technology at subsidised interest rates, allowing foreign investment of up to 51 per cent in the textile industry and creating a $ 16 million “cotton technology mission” to increase research on improving cotton productivity and quality.

The study notes that the Indian government's recently unveiled National Textile Policy 2000 (NTP 2000) opens the country's apparel sector to large firms and allows up to 100 per cent foreign investment in the sector without any export obligation.

It says the goal of the NTP 2000 is to improve the global competitiveness of the Indian textile and apparel industry and enable the industry to quadruple its exports to $ 50 billion by 2010.

The NTP 2000 also aims to liberalise remaining controls and regulations, eliminate targeted tax and fiscal benefits for small firms and encourage strategic alliances with international textile firms to set up large integrated mills and processing facilities.

The study highlights the importance of the textile and apparel industry to the Indian economy, accounting for four per cent of the country's gross domestic product (GDP), 20 per cent of industrial output and the largest source of foreign exchange earnings at slightly more than 30 per cent of India's export earnings.

India Abroad News Service

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