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Textile policy seeks to prepare exporters for post-quota regime

The government today announced a new five-year export quota policy for textiles and garments.

Quotas allotted under various entitlement schemes were left largely unchanged.

The policy envisages modernisation of textiles units in tune with the quotas alloted to them.

"The new policy aims at continuity, stability and at the same time making the exporter more competitive so as to face the challenges of the post-quota regime starting from January 2005," Textiles Minister Kashiram Rana said.

The Multi-Fibre Arrangement or MFA, which is not governed by the multilateral trading regime of the World Trade Organistion, ends in 2004.

Quotas under the MFA for the last 25 years have governed exports of textiles and clothing from India to the European Union, Canada and the United States.

A quota in essence, the new Export Entitlement Policy for garments, yarn fabrics and made-ups is valid from January 1, 2000 to December 31, 2004.

"The policy also aims at dovetailing the technology upgradation fund scheme with the quota policy so as to give a further boost to modernisation and upgradation of the industry, making it more competitive in the arena of international trade," Rana said.

The scheme incorporates assistance of up to Rs 250 billion to the industry over a period of five years.

There is a need to enter the countries not covered by quota restrictions and to further boost apparel exports to such markets. However, non-quota yarn exports have increased considerably, the policy noted.

Textiles sector accounts for about 67 per cent of India's exports. The country exported textiles valued at $6.25 billion in April-September 1999 ($6.09 billion in the same period in 1998).

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