'Next five years will see another IT revolution, in the industry of textiles'

Union Textile Minister Shankarsinh Vaghela says that the new WTO regime will benefit India, which should see US30 billion worth of textile exports in 10 years' time

Sanjay Kapoor Delhi

Coming from Gujarat, a state known for its handloom and textiles expertise, Shankarsinh Vaghela surely knows a thing or two about spin. So, it was only appropriate that he was given the opportunity to navigate the fortunes of the country's textile industry as it is poised to take advantage of the new World Trade Organisation (WTO) regime. Vaghela is confident that after the Multi-Fibre Agreement (MFA) and the quota regime melts away, India can follow up its information technology revolution with a sartorial revolution. Confident that India could earn US$ 30 billion from textile exports in the next 10 years, he also feels that China's being the new order's major beneficiary is not likely to impact India adversely, which has its own strengths.

Vaghela says that while the government is creating a buffer cushion for the small-scale textile and handloom sector, he does not rule out the possibility of their getting hurt in the long run.

How do you see the new WTO regime impacting India?

The next five years will see another IT revolution, this time in the industry of textiles. Today, textile exports stand at US$ 13 billion. I am confident that it will reach US$ 30 billion in the next 10 years, generating nearly 200,000 jobs.

In view of the WTO regime, we had undertaken a study of schemes in the textile sector so we could understand the drawbacks and shortcomings from which they had suffered. We have already undertaken corrective measures such as extending the limits of investments in small-scale industries from Rs 60 lakh to Rs one crore. We have also increased subsidy on handloom products from 12 per cent to 15 per cent. We have increased our support to many sectors. As a consequence, the industries that were connected with textile have seen a boom in the stockmarkets with share values of their stocks climbing from Rs 12 to Rs 112.

We also have an advantage in the fact that we signed the WTO agreement two years before China. Thus, we have not been burdened under the quota system for the past two years and remain ahead of China for two years at least. We must make the most of it.

Do you think China will hurt Indian textile growth?

There are problems. The major problem is the scale of production in the two countries. We will have to strive hard to reach their level. But we have an advantage - we have better credibility than China. Americans and people elsewhere trust Indian traders more than the Chinese. They are also keen to invest in India.

The difference in the political systems of the two countries also provides an advantage to us. China is not a democracy like India. A fear will always prevail as to what China's leaders are likely to do next. China also does not have a free and floating currency, which the US is insisting upon.

But they also have numerous advantages. Power and labour are cheap. We are trying to overcome the disadvantage in the power sector by encouraging captive power projects for the industry. Captive power projects are able to provide power supply at cheaper rates.

I recently visited the Apparel Park in Tirupur, Tamil Nadu. It is the first captive power project in Asia on such a massive scale. I was told that the cost of production was of Rs 2.90 per unit, as against the cost of production between Rs 4 and Rs 5 in the state sector power projects. The project was using diesel oil for power generation.