National Fibre Policy 2010-11

Ministry of Textiles
Government of India
Dated June 7, 2010

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 CONTENTS

1. Overview

2. Aim and Objectives

3. Projection of Fibre Demand – 2014-15; 2019-20

4. Gap Analysis

5. Major Policy Interventions required to meet the Gap

a. Cotton and Organic and Speciality Cotton

b. Man Made Fibre and Speciality Fibres

c. Jute

d. Wool

e. Silk

f. Other Natural Fibre

6. Financing Requirements

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 Overview

1. The National Fibre Policy has been designed with a decadal perspective of
2010-20 and seeks to place India firmly on the World Fibre map by strengthening
the existing policy framework and providing institutional and technological
support for rapid Fibre growth in the country in the coming decade. The projected
growth trajectories envisaged under the National Fibre Policy are ambitious and
would benefit all stake holders in the Textile Industry value chain.

2. The National Fibre Policy seeks to build a strong and vibrant textile industry
competent of producing quality cloth at acceptable price, increasingly contributing
to enhanced employment provision and competing for an increased share of global
market. The Fibre neutral policy seeks to balance the existing disparities within the
complete range of fibres by providing additional fiscal and non fiscal incentives for
sustainable growth of all fibres and be competitive in the international market.

3. The policy framework has been built keeping in mind the potential growth
of technical textiles both for domestic and international demands. Special attention
has been drawn to promote the lesser known specialty man made fibres and other
natural fibres. The domestic fibre consumption ratio in India at present is 41:59
(FY09) between man-made fibres and cotton, while it is almost 60:40 globally.
The global fibre consumption trend in future is likely to further tilt in favour of
man-made fibres as there is a limitation to growth of cotton world wide on account
of limited availability of land for cotton cultivation. Given that the future demand
is expected to be largely in favour of man-made fibre based textiles; special
attention is required to boost the consumption and production of man-made fibres
in India.

4. Investments needed for modernization and technology upgradation have

been envisaged through continuation of the TUFS scheme while promoting greater
downstream integration. The policy also envisages extension of the TUFS scheme
to Man Made Fibres production and Technical Textiles.

5. The Handloom Sector plays a vital role in the economy. In terms of

employment, the Sector is next only to agriculture and provides employment to the
weaker sections of the society, with 86 % handloom weavers/workers living in
rural and semi-urban areas. The National Fibre Policy addresses increasing the

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demand for raw materials for handloom weavers keeping in view the projected
growth rates of the handloom sector.

6. The key elements of the National Fibre Policy thus include the following:
a) Cotton production is envisaged to rise at a growth rate of 4.7 percent from
319 lakh bales in 2010-11 to 483 lakh bales in 2019-20; Cotton
Consumption is envisaged to increase to 413 lakh bales by 2019-20 with 70
lakh bales being surplus;

b) Man Made Fibres and Speciality Fibres domestic demand will rise at a
growth rate of 8 percent per annum from 3.9 billion kgs in 2015 to 6 billion
kgs in 2020;

c) Jute production will rise at a growth rate of 3.6 percent from 94 lakh bales
in 2010-11 to 130 lakh bales in 2019-20;

d) Wool consumption is projected to nearly double from 114.2 million kgs in

2009-10 to 260.8 million kgs in 2020.

7. The National Fibre Policy also envisages significant institutional

strengthening mechanisms in the form of the following:

a) A Inter Ministerial Committee of Secretaries headed by Textiles

Secretary to calibrate cotton exports to ensure improved supply chain
management for domestic consumption, Electronic data exchange
between Customs Department and Textiles Commissioner for monitoring
cotton and yarn export shipments;

b) Establishment of a Yarn Advisory Board for formulation of a Yarn

Balance sheet to ensure adequate yarn availability for handlooms and
garments sector;

c) Launching of a Technology Mission on Technical Textiles and creation

of centres of excellence in the identified sub groups of technical textiles;

d) Creation of a Jute Development Fund for R&D efforts in modern

machinery development of Jute sector;

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 e) Setting up of an MMF advisory council with all stakeholders to monitor
excise duty and other concessions and take an integrated approach to
solving the problems of MMF producers;

f) Adopting a Mission Mode approach and establishing an Inter Ministerial

Board for promotion of Organic, Suvin and ELS cotton sector;

g) Restructuring the Central Wool Board on the lines of the Central Silk
Board to effectively implement the various schemes and policies and
achieve desired objectives;

h) A Focus Fibre Focus State approach would be adopted for development

of Other Natural Fibres in the Country.

Aims and Objectives

8. The Indian Textiles and Garments sector is envisaging a long term growth
trajectory, which entails huge requirements of fibres (natural as well as man-
made). In order to augment the value-added segments of the textiles value chain, it
is extremely important to boost the fibre availability in the country and resolve all
inherent issues associated with different fibres. There is a growing concern that the
fibre sector requires special attention, especially in view of the fact that presently
the fibre consumption in India is in the ratio of 59:41 between cotton and man
made fibres as against 40:60 ratio world wide. Considering the worldwide trends
and demand for consumer products made of MMF and growing demand for
farmland for food crops, it is expected that the country would witness a similar
trend-growth in the coming years

9. With a view to strengthen the fibre economy of the country and make Indian
textiles and garments sector competitive in the near, medium as well as long-term;
Ministry of Textiles, Government of India constituted a Working Group to
formulate a National Fibre Policy for Textiles and Garments sector of India.
Within the Working Group, 8 sub groups were formed viz. Cotton, Man-made
fibres, Jute, Silk, Wool, Other Natural fibres, Speciality fibres (Technical
Textiles), and Speciality (Suvin and Organic) Cotton. The constitution of each
Sub-group comprised of a Convener from the Government‟s side and a Co-
Convener from the Industry side along with other members, representing officials

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from concerned Ministries, Boards, Associations and majority representatives of
the Industry/ Sector.

10. The recommendations made by all Sub-groups were directed towards the
objective of formulating a fibre policy that will be fibre neutral and would seek to
enhance the production and availability of fibres in India to ensure sustained
growth for the textile value chain. Recommendations have been made to correct
fiscal anomalies and policy limitations that are currently present in the textile eco-
system, with a view to ensure a balanced growth of the textile industry in the
future. The Sub-groups representing fibres which currently have limited production
in India (Speciality fibres and Other Natural fibres) have recommended policy
interventions towards developing a conducive environment to facilitate growth and
development of such fibres.

11. This draft policy paper based on the report of the working group invites public
comments in the Ministry‟s efforts to provide a conducive environment for
enabling the Indian textile industry to realise its full potential and achieve global
excellence. It endeavours to ensure balanced growth of the entire sector by
promoting all the fibres equally and equitably. The policy envisages an enhanced
income and employment generation capacity of the textile industry. It aims to
improve industry‟s competitiveness and brand image in the world market for its
products.
12. The National Fibre Policy has the following aims and objectives:
 Augmenting investment and providing support on both fiscal and non-fiscal
front to increase fibre availability in the country and facilitate high growth
and competitiveness of the textile sector;
 Focusing on improving quality of the fibre produced in India;
 Devising means to augmenting remuneration of all the stakeholders within
the fibre eco-system;
 Correcting fiscal anomalies and policy limitations that are currently present
in the fibre eco-system in order to ensure balanced growth of the textile
industry;
 Providing assistance for building capacity in both industry segment and
human capital required for processing the expected surge in the fibre
production;
 Supporting modernisation and technological up-gradation of various
segments of the industry, to increase its competitiveness;
 Addressing the problem of infrastructure bottlenecks.

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 Projection of Fibre Production – 2014-15 and 2019-20

13. The long term projections on consumption and production of fibres and the
estimated investment requirement for the textile value chain have been presented
below:

COTTON FIBRE SCENARIO

14. Cotton production in India has more than doubled in a span of 7 years. Cotton
production reached a peak of 307.0 lakh bales during 2007-08 from 140.0 lakh
bales in 2000-01 but it fell to 290.0 lakh bales in 2008-09. The gradual increase in
cotton production over the years can largely be attributed to the phenomenal
increase in the yield of cotton. The introduction of BT cotton seeds has played a
catalytic role in enhancing cotton production in India. The consumption of cotton
by the textile mills and small-scale spinning units has witnessed sustained increase
since 2001-02, except in 2002-03 when the total domestic consumption declined.
Domestic consumption of cotton fibre increased at a CAGR of 7.0% rising from
168.8 lakh bales in 2002-03 to 236.9 lakh bales during 2007-08, and fell to 229
lakh bales in 2008-09. Cotton consumption has witnessed a sustained increase
since 2003-04 onwards due to growing demand for Indian textiles and
subsequently, there has been considerable expansion and modernisation of the
textile mills. Even though the Indian cotton consumption has increased at a rapid
pace in the last few years, it has not kept pace with the growth in domestic cotton
production, which has led to a surplus of production since 2003-2004. As a result,
India has emerged as one of the top exporters of raw cotton in the world. Currently,
India is the second-largest exporter of cotton after the US. In order to boost cotton
exports, the Indian government liberalised raw cotton exports since July 2001,
doing away with the system of allocation of cotton export quota in favour of
different agencies and traders. Over the years, India‟s cotton export has been
growing at an impressive rate, except for FY05, when exports dipped. In FY08,
India exported 88.5 lakh bales of cotton. India‟s exports during 2008-09 have been
estimated to have declined to 35 lakh bales. Garment exports are witnessing a
strong revival following the global economic recession and it is expected that the
resurgence would be robust and sustained in the coming years.

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 FUTURE OUTLOOK OF INDIA’S COTTON PRODUCTION AND CONSUMPTION
15. Cotton production largely depends on the area under cotton production and
productivity. Considering the issues pertaining to food security and land pressures,
the area under cotton production is assumed to be largely constant at the current
level. Thus, the future production is expected to be driven by improvement in
cotton yield. Yield is assumed to grow at 4.7%. The final scenario for 2020 is
encapsulated in the table below.

Future Outlook for Cotton Production and

Consumption(figures in lakh bales)
Year Production Consumption Surplus
2010-11 319 267 52
2014-15 384 323 61
2019-20 483 413 70

16. In the years to come, the robust increase in domestic consumption is likely
to drive down the surplus in cotton. Therefore, it is essential that there is greater
focus on enhancing domestic production of cotton significantly to cater to the
expected increase in domestic demand.

MAN-MADE FIBRES

17. Analysis of the world Textile and Garment production vividly brings out that
India‟s failure to harness the potential of Man Made Fibres has proved to be a
limiting factor in attaining a dominant position it deserves in the international
Textiles and Clothing sector.

18. India is the second largest producer of man-made fibres in the world (World
Fibre Report 2008) with presence of large plants having state-of-the art
technology. MMF textiles constitute almost two-third of the domestic textile
market. However, India‟s share in global exports of value-added textiles of man-
made fibres is miniscule at around 2.25% in 2008 (India‟s MMF exports were US$
3.3 billion as against global exports of US$ 146.7 billion). Hence, the domestic
MMF: cotton fibre consumption ratio in India is 41:59 (FY09) while it is the

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reverse globally. The share of man-made fibres in total fibre consumption has risen
from 25% in early nineties to 41% at present. However, since quota abolition, the
share of MMF in India‟s fibre consumption has almost stagnated at around 40% on
account of rising cotton production and international demand for cotton by textile
manufacturers to cater to export demand from global markets.

19. India‟s capacities for man-made fibres currently stand at 3.4 billion kg,
which is around 6.6% of global MMF capacities. India‟s total production of man-
made fibres stood at 2.5 billion kg in FY09, of which exports constituted 10.1% at
0.25 billion kg. and imports constituted 0.12 billion kg. Indian man-made fibre
industry is largely polyester dominated, which constitutes over 83% of total man-
made fibre production.

20. While man-made fibre production is highly concentrated, with limited

players engaged in manufacturing of MMF, the value added MMF textiles
manufacture is primarily in the decentralised sector, with presence of large number
of small and medium enterprises. Production of MMF fabrics has grown from 21
billion square meters in FY05 to 23.9 billion square meters in FY09. While in the
domestic market, MMF textiles and garments are dominant (65.70), cotton textiles
are predominant in the export markets (over 80%).

21. Given the changing consumption pattern in favour of man-made fibre based
textiles, there is a need to assess the medium term and long term demand for man-
made fibres in India. The demand for man-made fibre depends upon the demand f
or yarn and fabrics, which in turn depends upon the consumption of finished
textiles namely apparel and made-ups.
22. Considering future GDP growth of 8%, the domestic demand for man-made
fibres/ filament yarns is estimated at 3.9 billion kg in FY15 and about 6 billion kg
in FY20. Adjusting to this the likely exports and imports of MMF, the overall
MMF requirement is estimated at 4.2 billion kg for FY15 and 6.48 billion kg for
FY20. This implies capacity additions of about 1.8 billion kg (FY15) and 4.6
billion kg (FY20), which would require an investment of over Rs 90 billion by
FY15 and Rs 230 billion by FY20.The PFY has a majority share in the MMF fibre
demand and the country share in PSF is weak.

Future Outlook for MMF/filament yarn demand (million kg)

Fibre 2015 2020
PSF 1,105.80 1,638.20
VSF 372.5 546.1

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 ASF 133.3 180
PPSF 3.9 6
PFY 2,129.20 3,366.30
VFY 66.7 96
NFY 47.1 72
PPFY 62.7 96
Total MMF domestic demand 3,921.10 6,000.60
(+) Exports 470.5 720.1
(-) Imports 156.8 240.0
Total MMF requirement 4,234.8 6,480.6

SPECIALITY FIBRES AND TECHNICAL TEXTILES

23. Technical Textiles are “textile materials and products used primarily for
their technical performance and functional properties rather than their aesthetic or
decorative characteristics”. Some of the terms used for Technical Textiles include
“industrial textiles”, “functional textiles”, “performance textiles”, “engineering
textiles”, “invisible textiles” and “hi-tech textiles”. Technical Textiles are used
individually to satisfy a specific function (fire retardant fabric used in the uniforms
of firemen) or as a component of another product for enhancing its strength,
performance or other functional properties (tyre cord fabrics used in automobile
tyres). They are also sometimes used as accessories in processes to manufacture
other products (paper maker felt in paper mills). Some examples of Technical
Textiles in our day-to-day life include- tea bags, interlinings in clothes, carpets,
wall coverings, sanitary napkins, baby diapers, mattresses, and blankets amongst
others. Technical Textiles have a very important role in nation‟s security and
infrastructure development and nation building in general. Some examples are -
geo-textiles for long lasting roads, environment/ soil protection fabrics used in
disaster management, protective clothing (such as bullet proof vests) for security
personnel, fire-retardant fabrics for public places etc.

24. With globalisation of Indian economy and the rise in the expectations &
capacity of the middle class, the market size for technical textiles have shown a
healthy growth of 18% during 01-02 to 2007-08 and is expected to grow at 11%

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per annum till 2012-13 and thereafter at 6-8% per annum till 2020 naturally.
However, if government interventions take place in the form of a stimulus the
growth of technical textiles industry can be estimated at 12-15% per annum till
2020.

25. Speciality fibres are special man-made fibres used for manufacture in
Technical Textiles. The requirement / consumption of speciality fibres therefore
have direct correlation with the manufacturing base of technical textiles in the
country and its growth.

26. The proposed policy interventions in speciality fibre sector would enable the
technical textiles sector to attract an investment of Rs 5,000 crores by 2012; to
create additional employment opportunities for 12 lakhs persons by 2012 and to
grow at 12-15% CAGR.

27. A comprehensive Technology Mission of Technical Textiles is also

proposed to be launched.

JUTE

28. Jute is a rotational crop which is grown once a year between March / April
and July / August. It provides sustenance to more than 44 lakh people including
jute farmers, workmen, labourers and self employed artisans and weavers,
especially in the Eastern and North-eastern parts of the country, where it is the
mainstay of agro based industries. Jute being a natural, environment friendly fibre
the current scenario of environment consciousness has opened a new potential for
the sector, which can be exploited by entering into new markets and new products.

29. The production of raw jute has been stagnating at around 95 lakh bales
during the last 10 years. With the proposed interventions in the farm & agriculture
sector for increase in yield, it is expected that the production would increase to
around 115 lakh bales by 2015 and to around 130 lakh bales by 2020 (CAGR =
3.2%). The production of jute goods too has registered a marginal growth of 0.1%
in the last 10 years. With higher availability of raw jute and by modernization of
jute industry, the jute goods production is projected to increase from present 16
lakh MT to 20 lakh MT by 2015 and 22 lakh MT by 2020 (CAGR = 3.2%).
Product mix of jute goods is also expected to change, with less dependence on
Sacking (presently 70%) to 60% by 2015 and 50% by 2020.
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 SILK
30. Total Raw Silk production showed a growth of about 6.6% in 2009-10
after a period of stagnation during 2006-07 to 2009-10. Mulberry Raw silk, which
constitutes almost 83% of India‟s total raw silk production, showed a growth of
4.6% during the same period and production of Vanya Silk jumped by 16%. In
spite of several limiting factors, the silk industry in India has shown a growth of
over 5% over last 10 years, the export of silk goods in terms of quantity has shown
a growth of over 6%, while imports (mostly from China) continue to grow at about
3% over this period.

31. Total Raw Silk production showed a growth of about 7.2% in 2009-10 over
2008-09 after a period of stagnation during 2006-07 to 2009-10. Mulberry Raw
silk, which constitutes almost 83% of India‟s total raw silk production, showed a
growth of 4.6% during the same period and production Vanya Silk jumped by
22%. In spite of several limiting factors the silk industry in India has shown a
growth of over 5% over last 10 years, while the export of silk goods in terms of
quantity has shown a growth of over 6%, and imports continue to grow at about
3% over this period. Raw silk production is projected to grow at an average rate of
4.5% during the year 2010-2015 and 5.0% during 2015-20. The domestic
consumption of raw silk is also expected to grow at 3.5% and 4.0% during the
corresponding period.

WOOL

32. In the next decade, consumption of raw wool is estimated to double, from
114.2 million kg in 2008-09 to 260.8 million kg by 2019-20 mainly on account of
normal annual rise in domestic demand on account of increasing population further
fuelled by rising incomes and over all higher standards of living. Besides, rise in
consumption of raw wool is also expected due to increase in exports of woolen
products manufactured from raw wool. During the period between 2009-10 and
2014-15, raw wool consumption is expected to grow at a CAGR of 7.8%; this
growth rate is expected to be maintained during the period between 2015-16 and
2019-20 as well.

33. It is expected that exports of woolen products will continue with their strong
growth. This rise is expected to be on account of world economy growth, lower

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manufacturing cost due to availability of cheap labour force at home, availability
of new markets and expected drop in exports of woolen products from some of the
competitors and India rushing in to fill the vacuum so created. During the period
between 2009-10 and 2014-15, exports of woolen yarn, fabrics and made-ups are
expected to record a CAGR of 11.6%, while during the period 2015-16 to 2019-20,
exports are likely to post higher CAGR of 13.9%. As per our estimates, the exports
of readymade wool garments would post a CAGR of 19.1% during 2009-10 to
2014-15. The growth momentum is expected to accelerate during the following
five years and exports are projected to record a CAGR of 21.5% during the period
between 2015-16 and 2019-20.

OTHER NATURAL FIBRES

34. Other Natural Fibres (Banana, Pineapple, Agave/ Sisal, Hemp/ Nettle and
Flax) would provide revenues of Rs 2,786.5 million per annum after a period of 5
years and provided that the policy recommendations are implemented. The
projection on future potential of other natural fibres is provided in the table below.

Return per year (Rs

Fibre Million)
Banana 1,123.5
Pineapple 933
Agave/ Sisal 160
Hemp/Nettle 240
Flax 330
Total 2,786.5

SPECIALITY (ORGANIC, SUVIN AND ELS) COTTON

35. While it may be difficult to arrive at robust forecasts of future production of
Organic cotton (given the paucity in available data), simply extrapolating from
current levels would give an indication of the potential of this fibre. Given that
approximately 200,000 hectares under Organic cotton cultivation yields 500,000
bales currently, if the area were to go up to 500,000 hectares by 2015 (as estimated

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by experts), the potential output would be approximately 1,250,000 bales. This is
under the assumption that no Government intervention would be made for
supporting this sector. However, if support was provided to this sector, it is
possible that the total output of Organic cotton touches 2,000,000 bales by the year
2015, as the area under cultivation could increase to over 600,000 hectares and
significant improvement in yield is also achieved.

36. Currently, India has the distinction of being the world‟s largest producer of
organic cotton and accounts for almost 51% of the world Organic cotton
production. Organic cotton fibre is considered extremely important to Indian
agronomy as organic cultivation is the only sustainable tool, available today, to
revitalise the depleted / fast depleting agricultural lands of the country. It also
possesses the unique advantage of having a highly evolved end to end value
addition chain, which no other cotton producing country has. This home grown
advantage needs to be sustained without loss of momentum and credibility.
Therefore the organic cotton sector deserves special attention by the government of
India. While considerable progress has been made in Organic cotton production in
India, the sector still encounters certain issues and challenges. Also, the organic
cotton sector in India is still in its infantile stage and it is in a stage where it needs
support to mature and become independent and sustainable.
37. Suvin cotton is the Jewel in the Indian cotton crown. The king of cotton and
India‟s pride “Suvin” variety was released in 1979 by cross breeding Sujatha
(Indian cotton variety) with St.Vincent (Sea-Island cotton variety). Suvin is the
finest cotton being produced in India and has no parallel and alternative in the
world today. It is the only commercially available fibre in the world today with
spinnability up to 240s count. The highest production of Suvin was 36,000 bales
(170 kg), achieved in the year 1989-90. However, the production of Suvin has
depleted steadily over the years and currently stands at 300 MT i.e. around 1250
bales. It will be a national loss to let a world renowned fibre to phase itself out, for
lack of initiatives.

GAP ANALYSIS
38. The Indian T&G industry is complex in structure, with the presence of
numerous small-scale, decentralised and fragmented units along with some large-
sized integrated enterprises, also known as composite mills. While the small-scale
sector is largely unorganised and labour-intensive, large-scale enterprises on the
other hand are mostly organised and capital-intensive. In the last few years, the
industry has witnessed considerable expansion, integration and technological up-

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gradation due to potential growth opportunities in the export as well as domestic
market.
39. Capacity installation and utilisation in the industry has also improved
considerably over the past few years. The domestic textile industry comprises of
1608 spinning mills and 200 composite mills, with an installed capacity of 35.61
million spindles (of which 30 million spindles are in operation), 4,48,000 Open
End Rotors and 69,000 looms in the organised sector along with another 1219
small scale spinning units with 4.00 million spindles and about 1,57,226 Rotors in
the small scale decentralised sector. The capacity utilisation in the spinning sector
of the organised textile mill industry ranged between 80 to 93% while the capacity
utilisation in the weaving sector of the organised textile mill industry ranged
between 41 to 63%.
40. India‟s strength lies in the production of cotton yarn, which accounts for
around 74% of total spun yarn production in India. The production of cotton yarn
in India has recorded an annual average growth rate of around 6.5% between
FY05-FY09. While there has been a sustained improvement in cotton yarn
production since FY05, the yarn production witnessed marginal decline of
1.69% in the FY09 as compared to an increase of 4.42% in FY08
41. The dismantling of Multi fibre Agreement (MFA) in 2005 has provided a
boost to India‟s yarn exports. India is a net exporter of cotton yarn. In 2007-08,
India registered 8.3% growth and 9.9% de-growth in exports and imports
respectively.
42. India manufactures a large variety of fabrics, with a range of finishes, width,
and designs. India‟s cloth production is mostly in the form of cotton or blended
cloth. However, non-cotton cloth has gained prominence during the last 15 years,
and currently accounts for about 37.9% of country‟s total fabric production. At the
time of independence, the mill sector was the main producer of cloth in India.
However, the growth of the powerloom and handloom sectors, aided through
government incentives, has led to a steep decline in the share of the mill sector in
India‟s overall cloth production. The share of mill sector in cloth production has
gone down from over 70.0% in the 1950s to less than 6.0% in FY97 and to a mere
3.3%, currently. On the other hand, fabric production in powerloom and handloom
sectors has grown considerably; currently, these account for about 74.4% of India‟s
total cloth production. The production of knitted fabrics in the hosiery segment has
also increased in recent times; currently, hosiery accounts for 22% of total cloth
production in India. The slowdown in the global economy from 2007 to 2009
impacted the growth of textiles industry in India. Government provided a fiscal
stimulus and incentives in the foreign trade policy, along with increased plan

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allocations for the textiles sector including enhanced allocations under the
Technology Upgradation Funds Scheme (TUFS). These enabling measures helped
the Textile industry to face the recessionary conditions. In the year 2010, cotton
and cotton yarn exports and garment exports have recovered significantly.
43. Cotton Cloth production in India has witnessed sustained increase since
2003-04 before witnessing a marginal decline in 2008-09. While the production in
hosiery and mill sectors experienced modest increase, production in power looms
and handlooms declined compared to the previous year. The decline in cotton
textile during 2008-09 could be attributed to a confluence of factors like higher
price of cotton, high interest rates and slowdown in demand in domestic as well as
international markets.

44. Given that the production of cotton fibre, as well as MMF fibre and filament
yarn is expected to witness a substantial increase in the next 10 years, the installed
capacity for value addition under the textile value chain also needs to witness
substantial improvement to absorb the expected increase in fibre production. It is
estimated that the Textiles Industry would require investments worth Rs 188,000
Crores during FY10-FY20 for creating the required capacity along the textile value
chain on the basis of estimate of the increased fibre production. The segment wise
projected investment requirement is presented in the below table:

Investment requirement till 2020 (Rs cr) (For All Fibres)

Spinning 63,525

Weaving 38,485

Knitting 12,499

Processing 26,695

Garments 35,305

Technical Textiles 11,500

Grand total 188,010

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45. The Industry needs an investment of Rs. 176,510 crores till 2020 to cater to
demand growth. The spinning, weaving and processing segments would require a
significant portion of this investment. These segments are capital intensive and are
also characterized by low returns, thus heightening the need to incentivize
investments.
46. Huge additional capacities are required in the man-made fibre industry in the
wake of future demand. However, the MMF industry is capital intensive with long
gestation period. Thus, it is desired that incentives are provided to the industry to
accelerate the process of capacity build-up, to ensure adequate supply of fibres to
the user industry.

47. At present, TUFS is not applicable to manufacture of synthetic fibres as the

sector falls under the ambit of Department of Chemicals and Petrochemicals. If
TUFS is available to manufacturers of synthetic fibres as well, it would aid in
reducing the capital cost and hence the capital servicing charges such as
depreciation and interest on debt taken for capital equipment purchase. Thus
industry players want certain allocation of funds under TUFS for synthetic fibre
manufacturing.

Enhancing Investment along the Textile Value Chain

48. Increased availability of cotton fibre necessitates enhanced investment along

the textile value chain. The interest compensation of 5% available under the
Technology Upgradation Fund Scheme (TUFS) has helped in incentivizing
investments in the T&C industry. TUFS has had a major role to play in the growth
of the industry and increased investments in recent years in the sector. Given the
significant estimated investments required for the textile value chain, it is therefore
recommended that the Technology Upgradation Fund Scheme be continued, so that
the industry may avail of the benefits under it.

49. Ministry of Textiles will restructure the Technology Upgradation Fund Scheme
in the following manner.

Sector Interest Reimbursement/ Capital Subsidy/ MMS norms

Spinning 4% IR for replacement/ modernization of spinning mills;

5% IR for spinning mills with matching capacity in weaving/
knitting;

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 2% IR for additional capacity of spindles/ stand alone spinning
mills

Weaving 5% IR and 10% capital subsidy on brand new shuttle-less looms;

5% IR on second hand looms
Under 20% MMS – capital ceiling to be raised to Rs. 5 crores
from Rs. 2 crores and capital subsidy to be increased from Rs. 20
lac to Rs. 60 lac; for brand new shuttle less looms subsidy cap to
be kept at Rs. 1 crore

Processing 5% IR and 10% capital subsidy to be continued

For installation of CETPs 10% capital subsidy and 5% IR with
restrictions on discharge distance

Garmenting 5% IR and 10% capital benefits to be continued;

Coverage of 50% of land and buildings as other investments
eligible for units in backward areas while for units in other areas
the percentage to be kept at 25% of other investments

Technical 5% IR and 10% capital subsidy to be continued

Textiles

Silk Sector 25% capital subsidy on benchmarked machinery at par with

handloom sector

15% MMS Capital ceiling to be raised to Rs. 5 crores from Rs. 2 crores in
for SSI line with SSI units and subsidy cap to be increased from Rs. 15
sector lac to Rs. 45 lac

Benefits for Higher capital subsidy of 30% for SSI units

textile units
in NE States
/ J&K

Repayment Repayment period to be restricted to 7 years with 2 years

moratorium from current repayment period of 10 years including

18
period 2 years of moratorium/ implementation

Restructured/ Subsidy in restructured cases will be restricted to initial loan

Rescheduled repayment schedule
Cases

Sunset All sanctioned cases with first claim of subsidy prior to

clause 31/3/2012;
Ministry would approach CCEA for allocations under 12th Plan
separately

50. The industry needs an investment of Rs. 54,000 crores by 2011-12, and an
additional Rs. 145,000 crores in the XII plan period to cater to the growth in
demand. A significant portion of this investment is required in the spinning,
weaving and processing segments.

Major Policy Initiatives Required to meet the Gap

Cotton

51. India will be a cotton surplus Nation in the next decade. For the Textiles
Ministry therefore, supply side management issues are of vital importance which
needs to be addressed in the National Fibre Policy to ensure adequate availability
and quality of spinnable cotton in the country.
52. The key issues involved in policy formulation include (a) cotton
contamination (b) improving quality (c) improving infrastructure (d) problem of
admixtures (e) need for establishing uniform standards (f) creation of testing
facilities and need for an Indian arbitration for imported cotton. The responsibility
for enhancing production rests with the Ministry of Agriculture. The policy
measures include creating an institutional framework for development of cotton
fibre, improving irrigation facilities and water harvesting and increasing awareness
amongst farmers for suitable agronomic practices.

Improving Supply Chain Management and Ensuring Cotton Security

53. After independence, most productive cotton lands became part of Pakistan
and Indian Union was left with short cotton production for large cotton based
Industry. This lead to serious shortage of cotton and India turned from an exporting
19
country to a net Importer of long staple cotton. Cotton security for domestic
industry became a paramount need.
54. However, with various Governmental measures and agriculture extension
schemes to grow more cotton in the Country through Intensive Cotton
Development Program in 1971-72 and setting up of Technology Mission on Cotton
in 2000 coupled with release of Bt seeds for Commercial cultivation in 2002-03;
the cotton production of the Country reached a record level of 307 lakhs bales in
2007-08. With these developments, India became the 2nd largest producer,
consumer and exporter of cotton in the world. Minimum Support Price (MSP)
Mechanism safeguards the interest of cotton growers in the wake of fall in kapas
prices.
Cotton Export: Self Sufficiency in Cotton
55. Initially, cotton exports from India during the nineties were governed by
long-term cotton export Policy of the Government of India. As per this policy,
quota of 5 lakhs cotton bales including short staple non-spinnable Bengal Deshi
used to be released in the beginning of the season depending upon the availability
of surplus cotton. Thereafter the additional export quota used to be released in a
phased manner depending upon the availability of surplus cotton after meeting the
domestic consumption needs. A major portion of the quota was given to CCI.
Some portion of this quota was also allocated to Co-operative Institutions like
NAFED, HAFED, MarkFed, Maharashtra Federation etc. Since some of these
institutes did not possess sufficient basic infrastructure & marketing expertise;
therefore, CCI was facilitating in liquidating their quota. In late 1990s, residual
quota was also given to private traders in small quantities. During this quota
system, Textile Commissioner‟s Office was tasked with undertaking registration of
export contract. CCI, NAFED and other State Federation were under obligation to
give a Legal Undertaking (LUD) while private traders had to give Bank Guarantee
to ensure performance of Export Contracts. Now Maharashtra Federation,
GUJFED, RAJFED and mostly other State Federation have become defunct and
are not involved in cotton marketing any more.
56. The Government of India with effect from July 2, 2001 had liberalized
cotton exports from the country and placed the same under Open General License
(OGL). Thus, the system of allocation of cotton export quotas in favour of different
Agencies including CCI was dispensed with.
57. Cotton exports from India which used to be around 5 to 6 lakhs bales upto
1985-86, reached to the level of 13 lakhs bales in 1986-87. Thereafter, there were
only meager exports from the country except for the year 1992-93 and 1996-97. In

20
2005-06, exports were 47 lakhs bales and touched the highest level of 88.50 lakhs
bales in 2007-08.
58. In 2009-10, the actual export shipment from the Country is reported to the
extent of 73.28 lakhs bales. An additional 3.12 lakh bales are being shipped to
Bangladesh and Pakistan. Considering the cotton consumption of the Country as
260 lakhs bales, the carry over stocks shall be around 34 lakh bales, which is
equivalent to 45 days consumption only. Thus, carry over stock for next Cotton
Season shall be around 14.3 % of cotton production of 292 lakhs bales estimated
for Cotton Season 2009-10, resulting in very tight supply position of cotton for
Indian Textile Mills.
59. In the medium and long term, the stock to use ratio would be a determinant
of the exportable surplus. The National Fibre Policy thus seeks to improve supply
chain management with calibration of cotton exports and putting in place credible
and transparent institutional mechanisms for ensuring India‟s cotton security
commensurate with the growth envisaged in the sector.
60. In order to avoid repetition of such a situation (09-10) of over exports
resulting in shortages & disruption of supply of cotton to domestic textile industry,
tangible steps have been considered under the National Fibre Policy for future to
ensure regular supply of quality cotton to Industry till the end of every cotton
season.
61. The National Fibre Policy envisages the following policy measures:
 Though CCI is a major player for MSP operations, the National Fibre Policy
envisages CCI to undertake commercial operations so as to ensure secured
supply of cotton to textile mills at competitive prices. This shall obviate the
possibility of cartelization for individual gains;

 After projecting cotton consumption of domestic mills vis-à-vis expected

cotton production, availability of surplus cotton would be ascertained by
Cotton Advisory Board. An Inter Ministerial Committee of Secretaries under
the Chairmanship of Textiles Secretary would, based on recommendations
of Cotton Advisory Board and other factors; consider exportable surplus of
cotton from the country and also ensuring the prescribed carry over stock at
the end of season;

 Textiles Ministry in consultation with ISRO/ Department of Space would

put in place improved crop mapping of cotton so as clearly identify
production and acreage;
21
  In consultation with Department of Revenue, Textiles Ministry would put in
place an electronic data exchange system, that would ensure that every
Shipping/ Dry port provides a platform for data exchange on cotton
shipments on a weekly basis to the Textiles Commissioner.

62. The National Fibre Policy to the extent possible will seek to eliminate export
shipments to bonded warehouses in non consumption countries and shall be
instrumental in getting better per unit export realization, which shall ultimately
benefit cotton growers of the country Government would also seek to introduce a
separate price index for Indian cotton.

Cotton Yarn

63. Textiles Ministry would also initiate necessary policy interventions for
greater monitoring and streamlining of yarn exports to ensure adequate availability
to the handloom and garment sector. 2009-10 has witnessed significant price
surges in the yarn industry that has resulted in significant distortions in the supply
chain to the handlooms and garments sector. The policy interventions envisaged by
the Ministry of Textiles to stabilize prices of cotton yarn for improved supply chain
management for textile yardage, handloom weavers and garment sector are the
following:
 Yarn export registration which has commenced from April 2010 would
be firmly established as an institutional strengthening mechanism.
 A Yarn Advisory Board would be established to formulate a Yarn
Balance Sheet for the Country. The Yarn Advisory Board comprising of
representatives of stakeholders, ministries of Government of India and
the Industry would function on the lines of the Cotton Advisory Board
and would be an enabling mechanism for considered policy making to
ensure adequate supplies to downstream industry;
 Ministry of Textiles would intensify the Test Check of Hank Yarn
Obligations through the Textiles Commissioner to ensure that the
industry fully adopts the prescribed norms for ensuring adequate
availability of hank yarn to the handloom sector. The Ministry of Textiles
would advise the Textiles Commissioner to explore necessary legal and
regulatory options available under the Essential Commodities Act to
22
 ensure that the mandatory obligations of the Spinning Industry to the
Handlooms Sector are duly fulfilled.

 In addition to the above, Textiles Ministry has constituted a committee

under chairmanship of Development Commissioner (Handlooms) to
examine all issues of Hank Yarn Obligations to ensure adequate
availability of hank yarn to weavers. The Committee‟s recommendations
would be considered for future policy interventions.
 Appropriate fiscal measures on yarn would be considered in consultation
with Finance Ministry to improve domestic availability of yarn if the
trigger point prescribed for yarn exports by the Yarn Advisory Board is
breached.

Improving marketing and branding of Cotton

64. Grading of Kapas is imperative for improving the marketing and branding of
Kapas and lint. The grading system by an independent agency, regulated ware
housing system, better contracting system with risk management instruments, will
raise the dynamics of Indian cotton to a greater level of acceptance, fine image and
remarkable branding. The National Fibre Policy envisages the following policy
measures:
 A structured mechanism for promotion of cotton use would be developed, in
order to sustain domestic consumption on a long term basis, so as to
maintain the strength of cotton economy.
 Pilot projects for marketing of lint by the farmers, instead of kapas would be
considered. This would result in higher income to the farmers and accelerate
cotton production.
 The role and functions of Government agencies involved in marketing of
cotton fibre will be looked into for any reorientation of their role towards
inclusion of price stability.

Drawing Lessons from Other Countries

65. The sub group on cotton has conducted a detailed policy review of the
leading cotton producing countries. Some of the following policy interventions that
would be considered during the implementation phase of the National Fibre Policy
are the following:

23
 United States of America:
a) Direct Payments, Counter Cyclical Payments, Marketing Assistance Loans
and Loan Deficiency Payments with the objective of providing income
support to farmers;
b) Commodity certificates with an objective to speed up the process of
obtaining commodity loans;
c) Average crop revenue election program to reduce market risks by allowing
farmers to lock in revenue guarantee;
d) Recourse loans for seed cotton to enhance support to farmers of cotton
farming;
e) Special upland cotton marketing loan provisions to temporarily increase
cotton supplies into the country;
f) Upland cotton economic adjustment assistance to increase domestic
consumption;
g) Special competitive provisions for extra long staple cotton to increase
exports and maintain competitiveness in world markets;
h) Cotton price forecasting for better information dissemination and
i) Crop insurance and disaster assistance by establishment of a Risk
Management Agency to evaluate the Industry.

China:
a) Cotton Quality, Classification, system reform plan to align China‟s
classification with international standards and to create a system of scientific
testing process;
b) Multi Year Seed Subsidy program to stabilize the cotton planted area;
c) Transportation subsidy and targeted loans to financially assist domestic
marketing;
d) State Cotton Reserve Management Policy to support domestic cotton prices
and facilitate marketing of domestic cotton;
e) Quality credit assessment measures to strengthen inspection and quarantine
supervision of imported cotton;
f) Tariff rate quota to regulate the market and protect the interests of both
farmers and industry.

Brazil:
a) Premium to commercial buyers to supplement the supply of commodities in
the areas of the country considered to be deficient in agricultural production;
b) Equalization Premium to Farmers to compensate the farmers for currency
fluctuations;

24
 c) Premium Commercial buyers under a private sell option contract to signal
future price for the market and guarantee future income to the farmers;
d) Federal Government Acquisition to ensure purchase of product at a
minimum price determined by the Government with an aim to support the
farmers and commodity prices.

Pakistan:
a) Cotton Standardization system to earn better price in the international
market;
b) Clean cotton program to enable production of standardized and clean cotton;
c) Cotton fibre testing to encourage instrumental classification of cotton fibre;
d) Infrastructure and technological development to develop clusters with
amenities for testing product development and research and promotion of
ginning factories;
e) Focus in value addition to introduce BT cotton and production of long staple
cotton on priority basis;
f) Marketing insurance schemes and zero rating of exports to foster the export
of cotton fibre

Organic, Suvin and ELS Cotton

66. The policy on Organic & Suvin Cotton aims to ensure that the acreage under
Suvin fibre should not be allowed to decline further and prevent Suvin from
becoming extinct. This Policy suggests that a special subsidy package could be
developed in order to sustain the long duration crop and to keep alive the interest
of the current Suvin growers. Steps in this direction would include
a) Ensuring seed availability for organic, Suvin and ELS cotton;
b) Incentives to the farmers for sustaining organic cultivation;
c) Streamlining organic certification;
d) Adopting a Mission mode approach and establishing an Inter Ministerial Board,
for the Organic, Suvin and ELS Cotton Sector. The National Fibre Policy
recommends establishment of a Board for speciality cotton comprising of the
Ministries of Agriculture, Commerce and Textiles with the responsibility to
ascertain areas as organic zones/ refuge zones in Bt Cotton areas as per
regulations and ensure timely availability of variety seeds for this purpose.
e) A technology mission on speciality cotton would be developed.

25
 Fibre Availability for Handloom Sector
67. Handloom sector is next only to agriculture so far as employment is
concerned. During the 11th plan Rs. 1370 crores has been allocated for the
handloom sector out of which Rs.946 crores have been utilized till end 2009-10.

68. Handlooms are being positioned as a niche‟ product through innovative

brand promotion. for popularizing them amongst the youth and the up-market
consumers to use these products as a fashion statement.

69. With the brand promotion of hand woven fabrics used in conventional and
contemporary products such as home furnishings, bed, kitchen and table linen, the
handlooms are capable of providing both ethnic and contemporary products. The
handloom sector is likely to see a resurgence provided there is adequate
infrastructure support for timely production and marketing of quality handloom
products to meet the demands of the national and international markets.

70. The Handloom fabric production was continuously increasing at the growth
rate of 6 to 7% from the year 2004-05 to 2007-08 while there was a marginal
decline of 3.88% during 2008-09. This has happened due to global economic
recession and all the sectors including handlooms were affected. That said, the
sector witnessed a positive growth in cloth production during 2009-10 of 1.66 per
cent more than the previous year.

HANDLOOM Fabric Production (million Sq. mtr.)

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Cotton 5098 4519 4792 5236 5717 6076 5840 5819
Blended 118 117 146 145 99 123 118 147
100% 764 857 784 727 720 748 719 822
Non
Cotton
Total 5980 5493 5722 6108 6536 6947 6677 6788

The Cluster Approach

26
71. To provide financial/policy support and the necessary regulatory framework
that fosters the development of viable entities which enable artisans and micro
enterprises (individually and collectively), assistance for Infrastructure Support to
handloom clusters have been offered under the Cluster Approach, by setting up
new or upgrading the existing infrastructure to expedite production and improve
the product quality.

72. To make Handloom units sustainable and independent business units,

Common Facility Centers (CFC), have been set up and Dye houses have been
upgraded. Technological support by way of assistance in acquiring equipments
like reeds, healds, jacquards, and winding machines, has helped in increasing
productivity and has enhanced income generation.

73. Financial assistance from banks too has been facilitated to provide credit to
weavers now organized as SHGs / Consortia/ Producers‟ Companies. Social
security and welfare measures have also given adequate support to the life and
health which has added to enhance the productivity of the handloom weavers.

74. Handloom sector represents the rich cultural and traditional heritage unique
to India. Being a unique craft woven with dexterous hands, the unique skills need
to be protected from languishing. In the face of growing competitiveness in the
textile industry both in the national and international markets and the free trade
opportunities emerging in the post- MFA environment, a growing need has been
felt for adopting a holistic approach to facilitate the handloom weavers to meet the
challenges of the globalised environment.

75. Handloom weaving provides a source of livelihood for 45 lakh handloom

weavers. For their sustainable development, a focused approach has been adopted
for increase in production through the use of innovative yarns and fibres.
Developing new designs and product range of international market requirements is
the need of the day. This will give long term gains.

76. In fact, the new and innovative product range namely home furnishings, bed,
kitchen and table linen, made-ups, stoles and scarves have generated a great
international market demand. The potential and growing demand in the export
market can be tapped by providing good quality raw material at competitive rates

27
and adequate technological support for fulfilling the qualitative and quantitative
requirements for the export market.

77. The Hank Yarn Obligation Scheme ensures 40% Hank Yarn obligation to
the Handloom sector for their survival and development. However, it needs to be
reassessed depending on market demand from time to time.

78. Moreover the environment friendly nature of the handloom products makes
them easily accessible to countries with stringent Non-Tariff barriers. International
exposure of handloom products by showcasing the innovative and contemporary
designs is necessary. For this, e-marketing can ensure a sustained supply chain
management.

79. As per the estimates of Census (2009-10), the number of looms has declined
from 31.40 lakhs to 22.10 lakhs (vis-à-vis previous Census of 1995- 96) due to
competition from power looms and mills. Moreover, the number of weavers
engaged in handloom weaving has also reduced from 65 lakhs to an estimated
number of 45.5 lakhs. Handlooms sector continues to employ a good percentage of
the total textiles workforce and continues to need infrastructure and technology
support.

80. The per loom productivity has improved due to up- gradation of looms and
training of weavers being provided by the Government. Looking ahead,
Handlooms sector has the potential to grow at a rate of 3-5 percent per annum.

81. The production cost of handloom products pre-dominantly constitutes of raw

material costs which varies from 40 to 60% depending upon the product.
Therefore, the availability of raw material at reasonable cost is of utmost
importance to the handloom sector

82. Given this scenario, the anticipated growth of 5% will translate into 1.14
lakh new looms taking the total installed looms upto 23 lakhs. This is likely to
generate employment for 3.3 lakh additional handloom weavers since one loom
provides employment to not only one handloom weaver but also to 02 ancillary
workers engaged in pre-loom and post-loom activities.

28
83. If, approximately 15% of domestic supply of cotton is likely to be utilized in
the handloom sector then, Handloom secto‟s cotton consumption would increase
by 30 lakh bales over the next decade.

84. Presently, 6788 million Sq.mtr. handloom fabric is produced annually by the
handloom sector on 22 lakh looms. With additional 1.14 lakh looms, almost 340
mlln.sq. mtrs. additional handloom fabric is likely to be produced every year.

Powerloom Sector
Upgradation of traditional powerlooms to high tech shuttle-less looms.

85. The share of decentralised powerloom sector is about 62% of the total fabric
production in the country. This sector is still a weak link in the textiles value chain
and has not reached the desired level of modernization. Out of 22.56 lakhs looms
in decentralised powerloom sector, there are only 1,02,854 shuttleless looms, rest
are mostly plain traditional looms. The productivity of the plain looms and the
quality of fabrics produced in these looms is much lower compared to that of
shuttleless looms and caters to the lower end of the value chain. Fabric production
in India has to move up in the value chain to cater to all segments of the clothing
industry and establish India as a producer of quality high end fabric producer and
remain competitive in the global market in terms of both, quality and price.
Therefore, it is essential to upgrade the plain traditional looms to high-tech
shuttleless looms in a time bound manner. It is proposed to upgrade/replace at
least 50 % of traditional looms to modern shuttleless looms by the end of 12 th
Plan.
86. Since shuttleless looms are very costly, it is difficult for the entrepreneurs in
the unorganised powerloom sector to replace the traditional looms with shuttleless
looms without adequate support and incentive from the Government. For the
upgradation of technology in textile industry, Govt. of India had introduced and
implemented Technology Upgradation Fund Scheme (TUFS) since 1-4-1999.
Under this scheme a lot of new investment has come in the modern machineries.
However, the decentralized power loom sector has not been able to take full
benefit of this Scheme due to fragmented nature and financial weakness of the
sector. It is, therefore, necessary to dovetail the Technology Upgradation Fund
Scheme with other schemes, such as Cluster development schemes and if
necessary, introduce new schemes to focus on modernisation of these looms.
29
Allocation under TUFS would also need augmentation to enable the decentralised
powerloom sector to migrate from the traditional plain looms to modern shuttleless
looms. This enable the sector achieve economies of scale and consistency in
production in terms of quality and volume. Installation of modern jacquard
machines and dobby machines would also be encouraged with necessary training
for skill development.
87. There is a need for appropriate capacity building in the machinery sector to
achieve the above objectives of replacing old traditional looms with modern
shuttleless looms in a time bound manner. Therefore, local manufacturing of high-
tech shuttleless looms would be encouraged by providing adequate incentives and
policy support so that our dependence on shuttleless looms is reduced so that our
dependence on import of shuttleless looms is reduced. In the interim period it is
desirable to reduce the import duty on shuttleless looms so that cost of installation
of such looms is reduced. These measures, along-with improvement in processing
facilities, would enable the Indian Textile Industry to become competitive in the
world market and shall be able to achieve it export potential.
88. Keeping in mind the objectives of cost reduction, quality improvement of
MMF in bulk and backward integration viz., establishing powerloom clusters of
man made textiles, developing adequate capacity for texturizing, twisting, winding
and sizing processes, efforts will be made to establish two mega clusters for
powerloom industry in man made textiles.

Speciality Fibres
Introduction
89. Technical Textiles are “textile materials and products used primarily for
their technical performance and functional properties rather than their aesthetic or
decorative characteristics”. Technical Textiles are used individually to satisfy a
specific function (fire retardant fabric used in the uniforms of firemen) or as a
component of another product for enhancing its strength, performance or other
functional properties (tyre cord fabrics used in automobile tyres). They are also
sometimes used as accessories in processes to manufacture other products (paper
maker felt in paper mills).

90. Based on the characteristics of the product, functional requirement and end-
use, the variety of Technical Textiles products have been classified into 12
segments as follows:

Segments of Technical Textiles

30
Segment Usage
Agrotech Agriculture, horticulture and forestry
Buildtech Building and construction
Clothtech Technical components of shoes and clothing
Geotech Geotextiles, civil engineering
Components of furniture, household textiles and floor
Hometech coverings
Indutech Filtration, cleaning and other industrial usage
Meditech Hygiene and medical
Mobiltech Automobiles, shipping, railways and aerospace
Oekotech Environmental protection
Packtech Packaging
Protech Personal and property protection
Sporttech Sport and leisure

91. Fibres used in Technical Textiles can be segregated into three categories:
 Regular/ Generic fibres,
 Speciality variants of regular/ generic fibres, and
 High tech/ high performance fibres

92. While the regular fibres like natural fibres and synthetic fibres (polyester,
viscose, nylon, polypropylene) account for 70% of the total fibre used in technical
textiles, speciality fibres constitute the remaining 30%. While speciality variants of
regular fibre constitute majority of speciality fibres (25% of the total 30%), the
high performance fibres constitute a small proportion, i.e. 5%.

93. This section on speciality fibres for the National Fibre Policy has focused
only on the 30% of these fibres, namely - speciality variants of regular fibre and hi-
tech/ high performance fibres.

31
Global Scenario – Technical Textiles

94. The global market size of Technical Textiles is estimated to be US$ 127.3
billion in 2005 (24 billion kg) in 2010. Amongst all the segments of Technical
Textiles, Mobiltech, Indutech and Sporttech are the more prominent ones which
collectively accounted for 56% of global market size.

95. Globally, production of segments in the textiles industry has reached a

saturation point and its manufacture has become extremely competitive due to shift
in production to low cost nations. Hence, these nations have shifted their focus on
manufacture of value added products namely Technical Textiles which offer good
margins and are technology intensive.

96. World consumption of fibres in Technical Textiles in 2005 was 22% of the
total fibres consumed. Of the total fibres consumed (19.68 mn tonnes), around 80%
comprised of MMFs and remaining comprised of natural fibres. It is expected that
the share of MMFs in total fibre consumption will further increase to 81.3% by
2010. Among various fibres, polyoliefin and polyester collectively accounted for
50% of total fibre consumed in Technical Textiles in 2005 followed by glass (15%)
and jute (14%). Specialized fibres like aramid and carbon account for 1% of fibres
consumed in Technical Textiles. Natural fibres find application in comparatively
less demanding applications like sacks, twine and carpet backing.

Indian Scenario

97. India is the second largest textiles economy in the world after China;
however, its contribution to the global technical textiles market is insignificant.
However, the growth of Small & Medium Enterprises in the Technical Textiles
Sector has been very significant. As on date there are 3000 units manufacturing
technical textiles in the country, of which about 90% are in SME sector; and
around 1,000 units have commenced production during the last 5 years. The
market size of Technical Textiles in India stands at Rs 417.6 billion (2008-09) and
it has grown at a CAGR of 9.6% from Rs 219.9 billion in 02-03. Packtech is the
largest segment accounting for a 35% share in overall market size of Technical
Textiles in India in FY08 followed by Clothtech (16.5%), Hometech (12%) and
Indutech (7.7%).

Segmental market size (Rs mn)

Segment 02-03 08-09 CAGR

32
 (%)
Agrotech 2,610 5,530 11.3
Buildtech 10,511 21,570 10.8
Clothtech 53,951 69,080 3.6
Geotech 1,100 2,720 13.8
Hometech 7,579 50,250 31.0
Indutech 26,220 32,060 2.9
Meditech 11,933 16,690 4.9
Mobiltech 12,764 31,830 13.9
Oekotech - 680 -
Packtech 35,877 146,300 22.2
Protech 3,475 13,020 20.8
Sporttech 53,898 28,510 -8.7
Total 219,917 417,560 9.6

98. The technical textiles segment in India has a potential to attract investment
and create additional employment opportunities in coming years. Investments of
Rs 5,000 crores are expected by 2012 and employment is expected to increase to
12 lakhs by 2012.

99. The technical textiles industry is expected to register a growth of 11% per
annum till 2012-13 and is likely to grow at 6-8% per annum till 2020 without any
policy interventions. However, if government interventions take place in the form
of regulatory push the growth of technical textiles industry can be estimated at 12-
15% per annum till 2020.

100. In India, indigenous production of fibres is limited and majority of specialty

fibres are imported to cater to growing demand. Among various fibres,
polypropylene and polyester account for 34.4% of total fibre consumption in
Technical Textiles. While jute has mostly been replaced by HDPE or
Polypropylene all over the world, India still uses jute in manufacturing of
33
packaging products due to mandatory packaging in jute materials Act. Also, other
traditional fibres like hemp, sisal and cotton are rapidly getting substituted by
synthetic fibres like polyester, polyethylene, nylon, etc due to better performance
and functional properties of these fibres.

101. Issues And Concerns Of Technical Textiles Sector

1. Low penetration: Technical textiles sector in India is at a nascent stage in
terms of market development. There is lack of awareness amongst the
entrepreneurs as well as consumers about the usage, benefits and high
growth potential. At present, the major deterrent for expansion of the sector
is low demand.

2. Lack of R&D: A major concern related to development of speciality fibres

is lack of indigenous research and development in the area of speciality
fibres. Further, the technology required for manufacturing of most of the
speciality fibres is proprietary and very expensive. High cost and low
demand have also deterred Indian players to develop speciality fibres
indigenously.

3. Absence of HSN codes: The HSN code classification for a number of

speciality fibres is not available at the eight-digit level, while for some of
the speciality fibres, such as meta-aramid and para-aramid fibre, the HSN
code is same. This creates difficulty in studying the trend in production,
imports and exports of the speciality fibres. Also, a number of speciality
fibres are clubbed together under the heading „Others‟, thus making it
impossible to study the trends of the individual speciality fibres.

4. Fiscal anomalies: There exist duty anomalies in the technical textiles

industry wherein an excise duty is levied on the raw material while the
finished product has been exempt from the duty. Some of the products
exhibiting such anomaly are – Baby diapers, Incontinence diapers and
Sanitary napkins. Anomaly also exists with respect to customs duties. One
of the customs duty related anomaly has been observed in case of aramid
yarn. Further, currently, the VAT rate in some states (like Tamil Nadu,
Karnataka) is different for the same products based on the base fibre used.
There also exists a discrepancy in fiscal treatment of nonwovens and other
textile products. Also, DEPB for nonwoven and converted products do not
find a mention and needs to be notified.

34
 5. Regulatory issues: One of the reasons for low penetration of technical
textiles, especially in the meditech segment is the existence of regulations
that discourage use of modern technical textile products. For instance, the
Indian Drugs & Cosmetics Act 1940 and Indian Pharmacopoeia recognize
only woven medical products, due to which the consumption of nonwoven
fabrics in medical area is very low. Similarly, in other segments like
geotech, absence of Indian standards has led to a low consumption of geo-
textiles over conventional methods. Further, the usage of fire retardant
textiles in public places is currently suggested in the National Building Code
(NBC) but is not mandatory.

6. Concerns over GST: Textile industry is concerned over the applicability of

GST as the industry involves a lot of inter-state transfers especially at the
fabric stage. As GST would be applicable on inter-state depot transfers, it
could lead to blockage of funds/cash flow issues as no credit would be
available on the finished goods stock at such depots, unless they are sold.
The same concern holds for imported goods as well. Another area of
concern is the treatment of stock transfers and job work under GST. It is
also not clear whether optional cenvat would be available for textile
industries under GST.

Objectives Of The Fibre Policy – Speciality Fibres

102. In India, indigenous production of speciality fibres is limited and majority of

specialty fibres are imported to cater to growing demand. Among various fibres,
polypropylene and polyester account for 34.4% of total fibre consumption in
Technical Textiles.

103. India has large plants and adequate capacities in regular synthetic fibres but
players have shied from the production of speciality fibres till date due to low
demand and lack of requisite technology. However, as India needs to increase its
share of technical textiles in the next 5-10 years, in this policy, due attention on the
indigenous development of speciality fibres in order to attain near self-sufficiency
in the key raw materials required for production of technical textiles is proposed.
Simultaneously, the policy also attempts to provide necessary impetus for
increasing the usage of technical textiles so as to bring our country at the same
technological level (in usage of technical textiles) as that of developed world.

35
Approach & Policy Interventions

104. There are numerous types of speciality fibres present globally, but not all are
of strategic importance from the policy attention point of view. A limited number
of speciality fibres have been identified that can be successfully developed in the
country and be useful to the industry and the economy in the future. List of the 23
speciality fibres as identified are:
 Meta Aramids
 Para Aramids
 FR Modacrylic
 Superabsorbant Fibre
 High Density Polyethylene (HDPE), High Modulus Polyethylene (HMPE)
 Carbon Fibre
 Polyphenylene sulfide Fibres (PPS)
 Glass Fibre
 Flame Retardant (FR) Viscose
 Flame Retardant (FR) Polyester
 High Tenacity/ Super high tenacity Nylon (more than 7 gpd)
 High Tenacity/ Super high tenacity Polyester (more than 7 gpd)
 High Tenacity/ Super high tenacity Polypropylene (more than 7 gpd)
 High Tenacity/ Super high tenacity Viscose (more than 7 gpd)
 Ceramic Fibre
 Polytetrafluoroethylene (PTFE)
 PBI Fibres
 PBO Fibres
 Anti-microbial/Anti-fungal/Anti-bacterial Fibres
 Phenolic Fibre
 Conductive Fibre
 Fibre for concrete re-enforcement
 Alginate Fibre

105. The indigenous development of speciality fibres is highly dependent upon the
demand for these fibres in the domestic market from the downstream industry, i.e.
the technical textile manufacturers. Thus, besides the recommendations for
speciality fibres, the policy also proposes specific fiscal and non-fiscal
recommendations for technical textile products with a view to increase their
consumption and production in India.

36
 106. The fiscal and non-fiscal recommendations for speciality fibres and technical
textiles are as below.

107. Fiscal Measures for Identified Speciality Fibres

1. Excise duty on focus speciality fibres to be reduced to incentivize the focus
speciality fibres;
2. Import duty and CVD on additives used in Flame retardant speciality fibres
and other speciality fibres to be removed;
3. Capital equipment used in the manufacture of identified speciality fibres to
be exempted from Custom duty
4. The government to consider introduction of a Special Incentive Package for
enabling Indian or foreign companies to set up manufacturing facilities for
speciality fibres, thereby strengthening the raw material base for Indian
technical textile industry

108. Fiscal Measures for Technical Textiles

1. Excise duty levied on nonwovens should be uniform with that levied on
other textiles.
2. Non-woven & converted products to be covered under DEPB scheme.
3. Excise duty on baby diapers, sanitary napkins and incontinence diapers to be
rationalised
4. The customs duty exemption to be allowed even to an independent
manufacturer of aramid fabric, which will be used for production of bullet-
proof jackets for defence and police personnel
5. State Governments would be pursued for uniform VAT/ GST rates for
technical textiles products irrespective of the base fibre used and irrespective
of the source of origin of the product, whether from domestic market or from
imports
6. Government to consider higher funding to provide incentives to encourage
development of downstream technical textiles industry, viz.- 25% capital
subsidy to be provided in lieu of 10% capital subsidy and 5% interest rate
subsidy to small & medium entrepreneurs (upto capital investment of Rs 2
crores) engaged in manufacture of technical textile products

109. Non-fiscal Measures for Identified Speciality Fibres

1. An R&D centre for speciality fibres with a funding of at least Rs 50 crores to
be set up at either NCL Pune, one of the IITs or UICT Mumbai
2. Incubation centres to be set-up for transfer of technology and acceptance of
innovative technologies by the industry
37
 3. Well-equipped laboratories to be set-up in the four Centres of Excellence to
extend support of the industry in fields of testing and development, as per
the requirements
4. Specific HS codes for Speciality fibres whose HS codes could not be
identified to be notified. Also, converted products of non-woven to be
prescribed a specific HSN code.

110. Non-fiscal Measures for Technical Textiles

1. Standards to be notified for specific segments of Technical Textiles where
standardization is required on a priority basis include Geotech, Buildtech,
Protech, Meditech, and Agrotech
2. Ministries to issue guidelines which would increase the level of adoption and
awareness levels of Technical Textile products and aid in creation of a large
market for these products in India. Some specific initiatives and support
required from other ministries include:
 Mandatory usage of fire retardant fabrics in exhibition centres, cinema
halls and other public places
 Mandatory usage of fire retardant apparel for fire-fighting personnel
 Increased usage of geo-synthetics in infrastructure development projects
 Increased usage of nonwoven disposable Meditech products in medical
institutions and hospitals

3. In order to boost the consumption of Technical Textile in India, following

measures to be undertaken by concerned Ministries to increase the level of
awareness of Technical Textiles:
 Participation in medical fairs to promote the usage of Meditech products
(especially nonwoven single use products)
 Organization of symposiums, road shows in different parts of India so as
to familiarize people with the application and benefits of products
 Creation of framework for partnership in rural areas
 Creation of specific programs for end use application to educate users
about benefits of the products
 Incorporation of new generation medical textiles manufactured from
MMFs and their blends in Indian Pharmacopoeia and change in Schedule
F-2 of Indian Drugs & Cosmetics Act
 Infrastructure projects could be modified to DBOT from BOT to
emphasize more on initial design so as to enhance usage of latest material
and technology relating to geotextiles

38
  Various Ministries could make amendments in certain existing
Policies/Acts/Guidelines to directly/indirectly boost the growth of
Technical Textiles in India

4. Technology Mission on Technical Textiles to be initiated at the earliest as it

will boost domestic production as well as consumption of Technical Textiles
in the country;

5. In order to meet the stringent and critical performance related requirements

of Technical Textile products in the international markets, it is
recommended that world class testing facilities to be promoted to be set-up
in India. These facilities will assist in accurately evaluating the products to
meet international requirements;

6. Technical textiles to be included in the syllabus and curriculum of

educational institutions at B.Tech/B.E. and higher levels in all related
branches of engineering and technology, architecture and medicine to ensure
availability of skilled manpower over the long-term.

Man Made Fibres

111. To meet the objectives of attaining high growth and increasing the
competitiveness of Indian textile industry, a special emphasis is required on
improving the competitiveness of Indian man-made fibres and textiles industry as
it can drive the growth of the industry in future, both in domestic as well as export
markets. This requires addressing of issues and constraints faced by the industry at
present:

 Lack of global competitiveness: Indian man-made fibres textile industry

has not been able to create a mark in the global textiles market post
dismantling of textile quotas even though cotton textiles industry has
witnessed a substantial growth. Since dismantling of quotas (2005 onwards),
Indian cotton apparel exports to the world have grown at about 10.7%
CAGR, while MMF apparel exports have witnessed a decline.

 Limited number of players: There are only a few big players

manufacturing man-made fibres in India. The industry follows a pricing
policy on import parity basis at landed cost. However, MMF producers
export man-made fibres at lower prices than in the domestic market.
39
  Levy of anti-dumping duties: Indian MMF textile manufacturers are also
faced with higher fibre prices as against their global counterparts on account
of levy of anti-dumping duties on imports of majority of man-made fibres.
This in turn affects the availability of fibres to MMF textile manufacturers at
competitive prices.

112. Addressing the above and other concerns of the industry following
recommendations are being made:

(1) A fibre - neutral excise policy is recommended i.e. all textiles and fibres
should attract the same excise duty i.e. 4% optional. A major concern area
has been the historical discrimination of man-made fibres and textiles
against cotton and cotton textiles in the form of higher excise duties.
Although there has been substantial reduction in excise duties on man-
made fibres and textiles during the last 10 years, the current duties on
MMF and MMF textiles are still high; while cotton is exempt from excise
duty, MMF attracts excise duty of 10%. Further, while MMF textiles
attract a mandatory CENVAT of 10%, cotton textiles have an optional
CENVAT of 4%. Any reduction in excise duties on MMF and MMF
textiles will have a highly positive impact on the growth of MMF
consumption.

(2) Customs duty exemption is recommended for specialized MMF which are
not produced indigenously. Various specialised man-made fibres (like
acetate/ tri-acetate, cuprammonium filament yarn, nylon 66, nylon 11,
Spandex, etc) are not being manufactured in India despite having huge
potential and thus have to be imported by the weavers.

(3) Customs duty exemption on raw materials and additives that are
primarily imported.

(4) Export oriented incentives should be provided to manufacturers of MMF

textiles and garments for a limited period to neutralize the impact of cost-
disadvantage vis-à-vis exporters in competing countries. This could
include higher drawback rates and inclusion of processed fabrics, made-
ups and garments made of man-made fibres under the Focus Product

40
 Scheme. A Graduation Scheme for three years would be introduced under
the Focus Product Scheme with benefits of 10% in first year, 7% in second
year and 3% in third year. This scheme would cover man-made textiles and
garments.

(5) Schemes for capacity expansion and up-gradation of machinery

At present, TUFS is available to the textile industry for up-gradation of
machinery. However, under TUFS, all the segments of the textile industry
including VSF and VFY are covered except manufacturing of synthetic
fibres and yarn (i.e., PSF, PFY, NFY, ASF, PPSF, PPFY etc.) as the latter is
administered by the Ministry of Chemicals and Petrochemicals. Given that
man-made fibres are used by the textiles industry, incentives provided to
MMF industry for technological up-gradation will ultimately benefit the user
industry.

a) It is recommended that synthetic fibres should be covered under TUFS with

fund support from their administrative Ministry i.e. Department of
Chemicals and Petrochemicals.
b) The machinery for manufacture of synthetic fibres post polymerisation may
be covered under TUFS.
c) The post polymerisation machinery may be benchmarked by TAMC in
consultation with proposed advisory council on MMF.
d) To encourage setting up of small size units, particularly from chips the
restriction on term loan and also on capital cost may be fixed by IMSC in
consultation with TAMC and proposed advisory council.

113. The coverage under TUFS will result in attracting more investments, entry of
more players, increasing the availability of MMF at competitive prices.

Setting up of MMF advisory council

114. An MMF advisory council with all the stakeholders may be set up to note,
advice and also to take an integrated approach to solving the problems of MMF
producers and users of MMF and to accelerate their growth.

115. Such a scenario would result in high growth of man-made fibres and textiles
industry, thereby contributing to higher revenues, increase in employment
generation, and higher foreign exchange earnings. Financial implications of these

41
recommendations would be balanced by the intangible benefits and cascading
effect in the economy.

Generic Recommendations

Consultation with Ministry of Textiles for Anti dumping duties

116. At present, there are apprehensions amongst MMF textile players that often
anti-dumping duties are levied on man-made fibres without adequate consultation
with the concerned user industry. In order to redress the grievances of the user
industry, it is recommended that introduction of anti-dumping duties on man-made
fibres must involve consultation with the Ministry of textiles to truly reflect the
concerns of the user industry. At present this is restricted to Department of
Chemicals and Petrochemicals.

Institutional support for initiating anti-dumping proceedings

117. The users of man-made fibre generally constitute small players who are not
able to initiate anti-dumping proceedings for their products, as it involves huge
costs. Thus, there is a need for introduction of an institutional mechanism to
provide support (financial and other) to industry associations to initiate and defend
the anti-dumping proceedings / safe guard duties.

Priority in gas allocation to processing units

118. MMF manufacturing and processing units are generally more energy intensive
and thus to ensure cleaner environment, it is recommended that these units should
be given a priority under the gas allocation policy, at par with the power sector.
This would reduce their dependence on coal and thus contribute towards greener
environment.

JUTE
Preamble
119. Government recognizes the significance of jute in India‟s economy, which
provides sustenance to more than 44 lakh people including jute farmers, workmen,
labourers and self employed artisans and weavers, especially in the Eastern and
North-eastern parts of the country, where it is the mainstay of agro based
industries. It has been recognized that jute and allied fibres occupy a unique
position as eco-friendly, biodegradable renewable natural fibres with substantial
42
value addition at each stage of processing. The policy aims to enhance the welfare
and well-being of farmers, farm labour, workers, particularly those in the
unorganized sector and assure a secure future for their families in every respect
through offering remunerative earnings across the value chain. The policy also
aims to increase the use of jute in new areas in order to ensure a sustainable growth
of the sector and as a measure towards environment protection.

Current Scenario
120. Jute is a rotational crop which is grown once a year between March / April
and July / August (90 – 110 days). There are different grades of jute viz. TD 1 to
TD 8 (Tossa variety) and W1 to W8 (White variety) and six grades of Mesta M1 to
M6. Tossa Daisee (TD) jute is the most commonly used by industry .TD 4 and TD
5 constitute of almost 60% of the total jute production. The present production
level of raw jute in the country averages at about 95 lakh bales comprising about
85 lakh bales of jute and about 10 lakh bales of Mesta. (1 bale=180 KG). However,
growth in raw jute production has remained flat in the last 10 years and the area
under cultivation has witnessed a decline.

121. The Prices of raw jute have been very volatile, across the seasons as well as
within the year with lower prices at the start of the jute season and higher prices at
the end of the season. During the last two years, the prices have shown an
exceptional increase due to increase in demand of jute goods and stagnation in
supply.

122. The jute industry has grown marginally at a CAGR of 0.1% in volume since
1999, but it has grown in value terms largely because the costs have increased over
the years. Sacking and Hessian has been the mainstay of the Jute industry
constituting around 82% of total production of jute goods. Domestic consumption
of jute goods contributes to around 87% of the production. Sacking is the key
product in the domestic market and yarn and hessian are key products in export
market. However the share of sacking in exports has been going up while the share
of Hessian and yarn has been coming down.

123. The world production of jute fibre was 2668.20 thousand tons in 2007-08 of
which India‟s production was 1642.30 thousand tons i.e. around 62 percent. Other
producers are Bangladesh (37%) and Myanmar (1%). India is the leading producer
of jute products. It produces about 70% of the world's estimated production.

124. The global export jute products were 832.7 thousand tons in the year 2007 out
of which India's share was 175.6 thousand tons which is about 21 percent. Other
43
major exporters of jute products include Bangladesh which is having a market
share of 66%. Over the last five years, the share of Indian exports in World trade
has been coming down in tonnage terms.

Issues Faced By Jute Sector

125. The constraints faced by the jute sector leading to the present problems are
identified as follows-
(A) Agriculture
(a) Lack of adequate availability of certified seeds
(b) No major breakthrough in development of HYV seeds.
(c) Lack of awareness of HYV seeds developed so far.
(d) Low incidence of mechanised farming.
(e) Poor price realisation to farmers.
(f) Increase in preference for alternate crops.
(g) Shortage of farm labour
(h) Volatility in prices and ineffective price stabilization mechanism

(B) Demand constraints

(a) Dominance of single product – sacking.
(b) Dominance of domestic consumption. Domestic consumption is
dominated by sacking for packing of reserved products.
(c) Stagnant volumes for non-sacking products.
(d) Absence of institutionalized marketing effort at an industry level
(e) Lack of awareness about jute in developed nations.
(f) Price competitiveness of jute products vis-à-vis their rival products.

(C) Technological issues of Industry

(a) Jute industry predominantly produces traditional products like sacking and
hessian using age old technology.
(b) Stagnant worker and machine productivity leading to the high conversion
cost.
(c) No major technological breakthrough that has been widely adopted by the
jute industry after the change from rove to sliver spinning system in early
1960‟s.
(d) Poor work culture within the mills, lack of proper training for operation,
maintenance and poor working conditions etc.
(e) Slow adoption of advanced technologies.

Vision For Jute Sector

44
126. Jute is a natural, environment friendly fibre. The current scenario of
environment consciousness has opened a new potential for the sector, which can be
exploited by entering into new markets and new products. Endowed as the Indian
Jute Sector is with multifaceted advantages, it shall be the policy of the
Government to develop a strong and vibrant sector that can:
1. Compete with confidence in the domestic and global market and become self
sustaining;
2. Ensure remunerative returns to the jute farmers.
3. Produce good quality fibre and products to meet the requirements of the
domestic and international demand; and
4. Increasingly contribute to sustainable employment and the economic growth
of the nation.

127. Objectives Of The National Fibre Policy On Jute

1. Enable the jute industry to build and adopt world-class state-of-the-art
manufacturing capabilities in conformity with environmental standards;
2. Facilitate the Jute Sector to attain and sustain an eminent share in the global
and domestic market of technical textiles;
3. Enable jute farmers to produce better quality jute fibre and to enhance yield
of raw jute substantially and facilitate skill development and upgradation of
the workforce of the industry;
4. Sustain and strengthen the traditional knowledge, skills, and capabilities of
our weavers and craftspeople engaged in the manufacture of traditional as
well as innovative jute products;
5. Encourage stakeholders to collaborate, develop mechanisms and undertake
activities that assist in bringing about overall development of the jute sector;
6. Make Information and Communication Technology, an integral part of the
entire value chain of jute and the production of jute goods, and thereby
facilitate the industry to achieve international standards in terms of quality,
design, and marketing;

Thrust Areas Of The National Fibre Policy On Jute

128. In furtherance of the above objectives, the strategic thrust will be for a new
Commodity Development Strategy incorporating the following:

(A) In order to increase the productivity & improve the quality of jute fibre,
following approach needs to be followed:
1. Increase availability of certified seeds and improve distribution of the same
through government agencies / channels.
45
 2. R & D for development of new variety of seeds involving reputed seed
companies.
3. Develop and adopt new retting practices or other methods for extraction of
the fibre from the jute plants to ensure quality upgradation of the fibre,
reduce the water requirement and make the process less physically
demanding for the farmers.
4. Increase penetration of new farm techniques by conducting awareness
programme.
5. Empower the growers, improve the marketing systems and infrastructure
and develop buffer stock of jute seeds.
6. Encourage contract farming for jute as well as Organic Jute.
7. Use of modern crop assessment techniques, such as satellite imagery for
deciding government interventions.

(B) Improve the existing marketing systems and infrastructure to improve farm
remuneration by-
1. Organising the growers into self help groups and empowering them to
address their issues will go a long way in reducing the volatility in raw jute
prices and ensuring better returns to them.
2. Taking up with state governments to strictly implement the provisions of
APMC act to increase the volume of trade of raw jute in the premises of
market yards.

(C) Stabilising Raw Jute Prices and ensuring raw jute security for manufacturers
and market by developing buffer stock of raw jute with Jute Corporation of India.

(D) Providing Incentives to Jute Industry for modernisation:

129. The government has been providing 100% reservation for packing Sugar &
Food-grain in Jute since 2005. This has provided an assured market for jute
sacking and thus sustenance of the sector. Further, Government agencies, that
procure 60% of the sacking produced by the industry buys jute sacks on an
administered price mechanism based on Tariff Commission formula. The
stagnation in efficiency criteria in the Tariff Commission formula has left no
incentives with the jute industry to modernise and reduce the conversion costs.
Therefore, it shall be the policy of the government that while continuing the
protection to the industry (by way of reservation in JPM Act) gradually induct
efficiency criteria in the administered pricing formula to ensure that the mills
modernize their processes progressively during this period. This would be
undertaken by the following measures-
46
 a) The man days taken for pricing the government purchase would
progressively be reduced from the present level to the best (top quartile) man
days achieved in the industry by the end of the third year.
b) The raw jute to jute bag conversion ratio would be progressively reduced
from the present levels to the best (top quartile) conversion ratio achieved in
the industry, by the end of the third year.
c) From the fourth year onwards pricing will be based on the best (top quartile)
achieved parameter in all the parameters used to determine the pricing.

(E) Market Development of Jute Diversified Products:

130. The JPM Act provides an assured market to the jute used in packaging due to
which, 60% of the market for jute products is sacking. The government shall
endeavour to reduce the dependence of the industry on sacking by on one side
gradually reducing the level of reservation, while on the other promote and develop
markets for non-traditional products such as geo-textiles, composites etc. The
government shall further promote marketing of jute diversified products such as
carry bags, furnishings, etc.

131. In the interest of equity, inclusive growth to the rural economy and artisans,
the government shall intensify its support to Small and Micro-enterprises, NGOs
and SHGs that produce & market jute diversified products. They would be
developed to be substantial consumers of non-sacking jute products, and thus
provide alternate market for jute products.

(F) Enhancing the scope and funding in Jute Technology Mission for-
1. Creation of a Jute Development Fund for R&D efforts in modern machinery
development in Jute Sector.
2. Modernization of industry and adoption of new Technology
3. Improve working conditions at the shop floor, develop better work culture
and adopt better maintenance practices.
4. Skill Development and Upgradation of the Workforce:
5. Export Market Development:
6. Product Development and Marketing:
7. Strengthening of informal sector for production of Jute Diversified Products

SILK
132. In spite of significant improvement in production in 2009-10, gap between
demand and supply is likely to remain in the medium term horizon. The National
Fibre Policy recommendations for the Indian Silk Industry are aimed at bridging
47
the gap between and domestic supply both in terms of quality and quantity, and at
reducing the country‟s dependence on import of raw silk, while maintaining a
balance between the interests of all stakeholders in the value chain, including
farmers, reelers, twisters, weavers and value- added producers. These objectives
are designed to be achieved through a set of Fiscal and Non Fiscal Measures,
focussed R&D efforts and field extension work. The policy recommendations in
this report are so designed to encourage sericulture activities, improve the
quality and output of fibre by intensive R&D and extension activities, and to
establish economies of scale through modernisation and clusterization of various
pre- and post- cocoon activities, thereby promoting competitiveness of Indian Silk
Industry in the global market.
Fiscal Measures
133. Duty exemption on Silk Machinery till 2015
Indian silk industry is essentially in the cottage and small-scale sector, working
with crude processes and outdated technologies. One of the ways to meet these
challenges is to import latest technology/equipments suitable for Indian conditions
at affordable prices. Under the Chapter No. 84 of customs tariff the Govt. has
provided a concessional duty of 5% under Sl. No 252 of Appendix-A (List-32) on
Silk machinery such as Automatic Silk Reeling, Silk Weaving, Twisting, Arm
Dyeing, Fabric Dyeing, Finishing Machinery, etc. It is desirable that the silk
machinery should be exempted from duty for at least 5 years, i.e. till 2015, as it
would aid in modernisation of post-cocoon stage and make the sector more
competitive. Following are the list of machineries to be considered under 0 % duty
scheme till the year 2015.
1. Automatic silk reeling machinery & its supporting equipments (Including
cocoon drying chamber)
2. Automatic Dupion silk reeling machinery & its supporting equipments
(Including cocoon drying chamber)
3. Silk twisting (Two for One or Three for One or up twisters) & its supporting
preparatory machinery such as Hank to bobbin cone winding machine/
silk doubling machine/ rewinding machine for bobbin to hank/Twist
setting chamber.
4. Shuttleless looms for silk (including high speed weaving looms with
electronic jacquard attachment)
5. Sectional Warping machine suitable for silk
6. Computer aided design system for silk weaving
7. Silk wet processing Machinery like Arm dyeing machines for hank
degumming & dyeing/Winch dyeing machine/Package dyeing machine

48
 for cone & cheese/Automatic dyeing jigger/Jumbo Jigger with or without
liquor circulation/Jet dyeing machine/soft flow dyeing machine/ sample
dyeing machine/Semi automatic flat bed screen printing machine/Rotary
Printing machine/ fabric digital printing machine/Silk Calendaring
machine/ Stentering Machine/ Decatizing machine other fabric finishing
equipments
8. Warp & Weft knitting machine for silk (Circular Knitting machine /warp
Knitting machine /Flat bed Knitting machine /socks knitting machine)
9. Silk Sewing & its supporting machinery such as fabric lay cutting machine/
Button stitch sewing machine /stud machine, software for Pattern making/
Chain stitching machine/loop making sewing machine/Power operated flat
lock/over lock machine. Zigzag flat bed sewing machine/Decorative
stitching machine/ /double stitch sewing machine/Button hole making
machine /Silk embroidery machine.

134. Rationalisation of the duty structure:

The basic customs duty on various silk products starting from the basic raw
materials i.e. raw silk is proposed to be rationalised so that parity could be
maintained in the import duty structure on the raw silk and its derivatives such as
raw silk (including dupion silk), twisted (thrown) silk and silk fabrics etc. to
provide an opportunity to convert the raw silk into value added finished products.
Basic customs duty on raw silk is proposed to be lowered to 25%, keeping in view
the overall duty structure of silk goods in India and other countries, and demand
supply gap in the country, while protecting the interests of the sericulture and
reeling sector.
135. Export incentives
Silk Products (including silk fabric, garments and made-ups) should be covered
under Focus Product Scheme so that the duty scrip or similar other benefits
provided to exporters to compensate the transport and other costs shall apply to all
silk products. Sericulture is an agro based industry, employing poor women who
form weaker section of the society in the villages. Cocoon production is cottage
based and conversion of cocoons to finished products is cottage based. Further,
export products made from Tassar, Eri, Muga need to be categorized as “Minor
Forest produce and their value added products”. Mulberry Raw Silk is a village
based cottage industry, thus on this basis silk Industry products should be included
under the Vishesh Krishi & Gram Udyog Yojana.
135(a). Mechanisms would be put in place for ensuring availability of raw silk to
the domestic weavers and producers of value added products. Efforts will be made
49
to get Silk Fabrics, Garments and Made-ups included in Focus Product
Schemes and to get sericulture products included in VKGUY.
135. Introduction of price support scheme
A “Price Support Scheme” (PSS) will be formulated for the benefit of sericulture
farmers in the country, taking into consideration the suggestions/situation of all the
silk producing States for Mulberry Reeling Cocoons. The Scheme will be
applicable to only commercial mulberry cocoons transacted in the Cocoon Markets
and Purchasing Centres in the respective States and will be operated only in the
designated Cocoon Markets/ Purchasing centres under respective Department of
Sericulture of the states. This scheme will come into effect only when the market
situation continues to have low prices than the normal prices for the cocoons for a
period not less than a week. The farmers will be eligible to get the incentive
amount to a maximum of Rs15/kg of cocoon paid against the lot put for sale during
the period which is declared as “eligible to get the PSS incentive” based on the
average price of cocoons per kg. The amount will be shared equally between the
Central and state governments.

Non-fiscal measures

137. Increased thrust on R&D for scientific ways of increasing silk

productivity & quality
137 (a) Domestic production of silk needs to be augmented through constant up-
gradation of sericulture technology and productivity improvement through
research, skill enhancement and modernization to match to the international
standards. Sustained R&D efforts are recommended for systematic development
and strengthening of silkworm seed production in all the sectors ensuring healthy
commercial seed and guaranteed production. Efforts will be made to improvement
in productivity of silkworm food plants through soil enrichment adopting eco-
friendly measures and to Develop mechanization in sericulture farming and
silkworm rearing to reduce labour inputs. Modernizing the silk production and
processing to improve the yield quality and precision to arrive at the desired output
will be a priority. Centrally sponsored programmes for R&D and extension works
through Central Silk Board and State Sericulture Departments shall be
strengthened and monitored to achieve these objectives. R & D by private players
will be encouraged. Besides, public private partnerships (PPP) can be explored in
the R&D areas (especially for the development of cocoon seeds for bivoltine
races).

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137(b) The existing and potential areas for developing sericulture in the country
would be mapped through ISRO remote sensing satellite images and schemes
will be implemented in a concerted manner in non-traditional new areas as well.
CSB has taken up collaborative project with North Eastern Space Application
Centre (NESAC) to map and identify the potential areas for development of food
plants for mulberry and vanya sericulture in the non-traditional States. The study,
in addition to 8 north eastern States, will cover other non traditional sericulture
states viz Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Himachal Pradesh,
Maharashtra, Uttar Pradesh, Kerala, Punjab, Uttarakhand and Orissa.
138. Strengthening of extension activities
138 (a) Extension staff functioning under the control of Director of Sericulture or
related departments under the state governments would be trained on latest
technologies and other developments in the sericulture at regular intervals.
Extension activities would also be promoted through NGOs, Krishi Vigyan
Kendras and Agricultural Universities in addition to CSB. To take up sericulture
extension work in non traditional and new potential areas, additional requirement
of staff needs to be assessed and proper arrangements are to be made to cover such
additional areas. Training institutes available in the states may be strengthened to
take up training programmes for sericulture staff in pre-cocoon and post-cocoon
sectors. Infrastructure facilities may be provided to take up such training courses
and localised research work at these training institutes.
138(b). At present, sericulture activities upto reeling are handled by sericulture
departments and activities beyond reeling are handled by handloom departments in
most of the states. Proper structural arrangements may be made in each state to
provide single window facility to the stakeholders.
139. Quality-based pricing and incentive system
There is need for introduction of advanced systems of quality-based pricing
mechanism for cocoons for appropriate and better price realization by the cocoon
growers. This is likely to result in sizeable difference in terms of returns to attract
Bivoltine cultivation. It is suggested that the current scheme should be modified to
provide higher incentive for production of better quality of Bivoltine silk i.e
3Aand above grade.
The eligibility criteria for providing incentive shall be based on Testing & Grading
of raw silk following standard testing procedures. The test results are to be
confirmed from the CSB testing institutions/concerned state department/ i.e. the
Bivoltine raw silk which falls 2A Grade & below should be eligible for an amount
of Rs.100/kg and the raw silk which falls 3A grade & above should be provided
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with an additional incentive of Rs. 50 per kg (to be shared by state & Centre, as at
present).
140 Extension of benefits to the Agriculture and allied Activities to
Sericulture Sector
Sericulture involves food plant cultivation which is an agricultural activity while
silkworm rearing is similar to livestock farming and reeling and other processing
activity is a small cottage industry practiced by a large chunk of people below
poverty line. It is therefore necessary to treat sericulture at par with agriculture and
allied activities and the post cocoon part at par with the small and village /cottage
industries to bring parity in extending all benefits such as:
 Implementation of various schemes like Rashtriya Krishi Vikas Yojana
(RKVY)
 Priority lending by banks and exemption from collateral security for availing
loans
 Subsidy on seeds & fertilizers
 Inclusion of sericulture under the purview of National Calamity Fund, and
 Similar other benefits enjoyed by Agriculture and Allied Sectors
Rashtriya Krishi Vikas Yojana (RKVY) was introduced during XI Plan as an
Additional Central Assistance Scheme to incentivise the States to draw up plans
for Agriculture and Allied sectors to supplement state specific strategies including
special schemes for beneficiaries of land reforms.As a result of efforts of the
Ministry of Textiles, Sericulture and post cocoon activities upto the stage of
production of Yarn and marketing has been recently approved under the RKVY
and allied schemes to provide much needed support to this sector. The benefits of
the focus areas of Rashtriya Krishi Vikas Yojana can be availed to (i) improve
sericulture extension system, (ii) silkworm seed base, (iii) sericulture
mechanization, (iv) enhancement of soil health, (v) development of rain fed
sericulture, (vi) integrated pest management, (vii) development of market
infrastructure, (viii) promotion of Seri enterprise, (ix) support to nonfarm activities,
(x) special schemes to beneficiaries of land reforms such as marginal and small
farmers etc. to maximize returns to the sericulture farmers. The states would be
urged to utilise the benefits of the scheme to incentivise the sector.
141. Dovetailing Sericulture with other programmes/ funding agencies to tap
resources

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Sericulture should also be included as priority sector in other flagship programmes
of the Government such as MGNREGS, SGSY for providing necessary labour
input, infrastructure and skill development. For instance, MGNREGS includes
raising plantations in order to strengthen forest based livelihoods and improving
conservation of natural resources. Rising of Tasar host tree plantations can be
included under this scheme to transform large tracts of unproductive fallow lands
into long-term assets of local people. Subsequently these families can also be
supported further to earn their livelihoods by Tasar silkworm rearing in their
plantations. As plantation raising is a highly labour intensive activity, large scale
promotion of Tasar host tree plantations would generate employment opportunities
at a significant scale under MGNREGS. At present only a few states, viz. Orissa,
Andhra Pradesh and Jharkand, have utilised MGNREGS for sericulture. All other
states should also promote sericulture under the MGNREGS and thus facilitate
creation of sustainable livelihoods for poorer households and revenue earning for
all the states.
Sericulture should be listed as priority sector for external funding through
agencies like World Bank, Swiss Agency for Development and Cooperation, JICA,
UNDP, UNIDO, FAO etc. who have earlier funded sericulture projects in India
considering the merits of this sector in improving the rural economy.

142. Catalytic Development Programmes to be continued with some

modifications
The Catalytic Development Programme (CDP) is a centrally sponsored scheme
continued from IX and X Plans with certain modifications and inputs aiming
towards employment generation, quality and productivity improvement and
technology up-gradation. CDP is a unique and effective tool for the transfer of
technology developed by the research institutes to the filled without much
dissemination loss. The scheme is being implemented by the Central Silk Board in
collaboration with 26 states with matching share of the state and equity
contribution of the beneficiaries to supplement the efforts of the states in achieving
the targets set for XI Plan. The objective of the scheme is to focus on complete and
holistic development of sericulture industry in the country involving the states and
stake holders for sustainable development of silk industry in terms of quality and
quantity improvement. The scheme would be continued with modifications based
on the implementation experience so far in order to catalyze the efforts of the states
to increase the production of raw silk including superior quality bivoltine silk and
vanya silks.
143. Cluster approach for integrated development of sericulture

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There is a need to provide an effective linkage between various stages in the value
chain of silk and create a cost effective structure for conversion of fibre into value
added products. Post cocoon activities will be upgraded through technology
transfer and creation of scale economies through cluster development,
introduction of high end machineries and creation of common facilities for
processing, degumming and dyeing etc. Fully integrated silk clusters will be
organized in silk growing and weaving areas in south, north and north-east regions
with strong hinterland linkages. Some of the selected clusters should be developed
as Medium-sized Clusters mainly in the post cocoon areas with hinterland linkage
approach, through pre-cocoon clusters, to ensure consistent supply of quality
cocoons. The cluster development scheme for these clusters would provide
requisite support/ linkages in terms of adequate infrastructure, technology, product
diversification, design development, raw material banks, marketing and promotion,
credit, social security, amongst other key components for the development of the
silk sector. The catchment for such clusters could be 5000-10000 looms. Common
facilities would also be developed in these clusters for processing, degumming,
dyeing, etc.
144. Measures for product development & diversification
Specific efforts will be made to promote development of basic designs, structures
and materials that can be used in production of commercial products. Common
infrastructural facilities should be developed for this purpose, which can be utilized
by small entrepreneurs who cannot afford to make huge investments. Initiatives are
required in creating awareness and promoting uses of silk, their byproducts, etc in
the new areas such as bio-medical applications in medicinal industry, surgical
applications, genetic engineering areas, cosmetics, handicrafts, ceramic industry,
sports industry for the production of mulberry tipped hockey sticks, cricket bats,
oil and soap industry, poultry foods, aviation industry etc.

145. Generic Promotion of Indian Silk

Though India produces a significant quantity of silk and exports niche products to
the global market, awareness about Indian silk, its quality and brand is missing. A
concerted effort and campaign would be made to promote and establish „Indian
Silk’ as a brand in the global market. Generic promotion of Indian silk will be
taken up to create awareness about the exclusive and rich in Indian traditional
designs. It is also necessary to create an increased awareness among the consumers
about different varieties of silks produced exclusively in India, different aspects of
natural & eco friendly silks primarily produced by the small farmers and tribals
inhabiting the forest areas; economic importance of Indian Silk in improving the

54
economic status of the country, employment potentials of silk industry etc. The
ethnic values of Indian silk and varieties of designs handloom weavers in India can
produce needs to be highlighted to create a brand image of „Indian Silk’. Brand
building process of Indian silk would include various publicity and promotion
programmes in the form of exhibition, road shows, mass media campaigns
covering print and electronic media, by participation in the domestic and
international exhibitions, trade fairs, promotional schemes, seminars, workshops
etc.

Vanya silk sector

146. India has the unique distinction of producing the commercial varieties of non
mulberry silk. These varieties of silk fetch premium in the international markets.
Therefore, adequate thrust would be laid for development of this segment of the
silk industry. Vanya Silk would be promoted as Eco Silk by providing support for
eco friendly production and processing of Vanya Silks in the form of
subsidy/incentives, especially by convergence with other developmental
programmes.

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 WOOL

147. The policy recommendations for the wool industry towards a sustained long-
term growth, include the following two categories –

1. Fiscal measures, which mainly include rationalization of the import duty

structure for import of wool and wool tops. Duty rationalization is looked from the
perspective to encourage value addition by the domestic industry by importing
quality raw material to export woolen products, and in the process earn valuable
foreign exchange for the country and generate sustainable employment too; and

2. Non-fiscal measures, which are required to provide boost towards improving

the quantity and quality of wool in India.

Fiscal Measures

Duty structure rationalization

148. The country is dependent on imports for quality wool to meet domestic as
well as export requirements. India is dependent on Australia for its requirements
for apparel grade wool. The domestic raw wool production is estimated to grow at
a marginal CAGR of 1% during 2009-10 to 2014-15. Given the requirements of
the Indian wool and woolen products industry for both, domestic and export
purposes, imports of wool are estimated to increase at a CAGR of 11.7% during
2009-10 to 2014-15.

149. In this respect there is need to reduce import duty on finer quality of raw wool
(of less than 25 micron) and waste wool and wool tops (of less than 25 microns)

Non Fiscal Measures

Carpet grade wool

150. The domestic industry has potential in carpet grade wool, and therefore efforts
should be concentrated on increasing the production of carpet grade wool to reduce
our dependence on imported wool. India has some of the best carpet grade wool
producing sheep breeds such as Magra, Chokla, Nalli and Bikaneri. Thus, focus
should be laid on these selective sheep breeds.

151. This should be done through increased thrust on cross-breeding programmes

with an aim to bring down the micron structure of the carpet grade wool. At the

56
same time, efforts should be made for selective breeding and for cross breeding of
imported sheep breeds with inferior and widespread local breeds, so as to increase
the fleece and body weight, resulting into better returns to the sheep rearers.

152. Selective breeding farms should be encouraged to be set up, preferably in the
private sector or as joint ventures towards improving the production and quality of
carpet grade wool.

153. The „Bikaneri Chokla‟ wool is considered to be the best indigenous carpet
grade wool. With a view to preserve this breed of sheep and improve upon its
number, selective breeding programmes should be implemented.

154. The cross-breeding programmes should be implemented in conjunction with

the respective State Departments of Animal Husbandry and Central Govt.
department of Animal Husbandry (Ministry of Agriculture) to ensure better
synergy and involvement, in order to achieve the laid objectives. The problem of
shepherds for non-availability of grazing pasture needs to be addressed in
coordination with other relevant authorities.

Highland wool

155. Iran is among the leading exporters of wool knotted carpets in the world.
There is rising preference for Iranian carpets, and this can be attributed to use of
highland wool in production of their carpets. This kind of wool can be developed
in the hilly tracts of India such as Ladakh, hills of Uttar Pradesh and West Bengal,
Sikkim, Arunachal Pradesh and Himachal Pradesh, etc. Efforts should be focused
on implementing programmes for producing highland wool in these regions.
Efforts should also be made to improve quality of highland wool to make it
suitable for high end apparel applications so that our dependence on imported wool
diminishes.

Deccani wool

156. Adequate focus should be laid on implementing long term cross-breeding

programmes with an aim of improving the quality of Deccani wool (presently the
Deccani wool is generally black in colour), and obtaining finer variety of the wool
(less coarse fibre). The ultimate aim of these programmes should be to upgrade the
use of the Deccani wool to make them suitable for use in carpet making, as against
the current practice of using them in making low-value blankets.

Speciality Fibre
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157. Although India has presence in specialty fibre production such as Angora,
Pashmina, etc, we have not been able to increase its production. Growers of these
specialty fibres should be provided with adequate extension support for marketing
to encourage them to take up this activity. Angora particularly has high potential to
be taken up as sustainable economic activity and production can be substantially
increased by giving suitable incentives to breeders.

158. Certain regions in the Southern part of India have climatic conditions which
are suitable for production of specialty fibre such as Angora, Pashmina, etc. Focus
should be laid on exploiting this opportunity and appropriate schemes should be
implemented to produce these specialty fibres, particularly since they have export
potential.

Bring down mortality rate from current 12-15% to 3-5%

159. Domestic production of wool is not sufficient to meet demand. This is also
because of high mortality rate among sheep, which currently is at about 12-15%.
This is because of lack of adequate healthcare and veterinary facilities. With proper
healthcare facilities, it is possible to bring down the mortality rate to as much as 3-
5%. Moreover, with proper nutritional support, an increase in wool yield up to as
much as 50% can be achieved. Hence, the government policy should focus on
extending proper nutritional support facility, and adequate healthcare and
veterinary facilities. Government should also organise healthcare programmes for
better management of sheep at farmers‟ level.
160. Awareness and training camps should be organised for shepherds for wool
improvement, productivity and sheep management. Camps should be organised to
educate and train the sheep breeders on the techniques and advantages of proper
rearing practices, nutrition support, healthcare measures, such as vaccination,
disease management, etc. An inter Ministerial Task Force shall be constituted
comprising of the Ministries of Textiles and Animal Husbandry for this purpose.

Undertake collaborative research projects with leading wool producing

countries in the world

161. The industry should undertake collaborative research projects with the major
wool producing countries, with necessary support from the government. Some of
the international organisations with which India could enter into collaborative
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research projects include Australian Wool Innovation, Wools of New Zealand,
Federacion Lanera Argentina, American Wool, South African Merino, British
Wool Marketing Board, etc.

162. The research should be in the areas of breed improvement, with an aim to
increase both, yield and quality of wool. Since Indian sheep lack in producing fine
quality wool, the emphasis should be on developing such sheep breeds which can
produce finer variety of wool, suitable for apparel making. At the same time, it
should also focus on carpet grade wool producing sheep, mainly through
successful cross-breeding at „live‟ conditions rather than at „farm‟ conditions.

163. Also, since the mortality rate among Indian sheep is high, the research
projects should focus on overcoming the diseases in sheep breeds and producing
disease-resistant stud rams which are capable of thriving in local conditions.

Introduction of grading system & marketing support

164. To incentivise the sheep breeders by way of better wool prices, scientific
grading system should be introduced. Awareness programmes should be organised
to educate wool growers on the benefits of grading. It is also considered necessary
to make best use of Indian coarse varieties of wool by way of product development
and process development to impart value additions so that wool growers get
remunerative value for products.

Strengthening the Central Wool Development Board

165. There already exist various schemes under the CWDB such as Integrated
Wool Improvement & Development Programme (IWIDP), Quality processing of
wool & woollen products, and Social Security Scheme for Sheep Breeders, aimed
at development of the wool and woollen products industry. The Wool Research
Association‟s activities are aimed at improving quality of wool through research
efforts. However, these schemes/programmes are not fully able to yield the desired
objectives. Thus, there is a need to review and redefine the role of the CWDB to
make it more effective and to enable it to perform the tasks assigned to it
appropriately. This should be done in close collaboration with wool producers and
the user industry. A restructuring of the CWDB in lines with the Central Silk
Board, Bangalore, will help it to implement the various schemes and policies in an
effective manner and achieve the desired objectives.

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 Other Natural Fibres
166. A 'Focus Fibre Focus State' Approach would be adopted for
development of Other Natural Fibres in the country. The chosen states for the
selected fibres under the „Focus Fibre Focus State Approach” are as follows:
FFFS Selection
 Banana: Tamil Nadu
 Pineapple: Tripura
 Sisal: Orissa
 Hemp/Nettle: Uttarakhand
 Flax: Madhya Pradesh
167. In these States common strategies for cluster approach would be taken up.
Other interventions for development would include capacity building, training,
creation of necessary infrastructure, aggressive international marketing, brand
building and bran promotion would be taken up.
168. Amongst the fiscal measures for promotion of Other Natural Fibres are:
 100% exemption on custom & excise duties on the import of plant &
machinery, consumables, embellishments on natural fibres for enhancing the
quality.
 50% capital subsidy for entrepreneurs promoting Other Natural Fibre based
industries.
 Tax holidays for manufacturing and exporting units for 10 years
 Interest subsidy for establishments (like TUFS)

HUMAN RESOURSE DEVELOPMENT

169. The projected size of the Indian Textile Industry by 2011-12 is US $115
billion and the corresponding manpower requirement is estimated at 6.5 million.
The shortage of skilled manpower is likely to be a major constraint faced by the
textile industry for its growth. To surmount the huge skilled/semi-skilled gap of
workforce, an Integrated Skill Development Scheme to impart employable skills in
different segments (textiles, apparel, handlooms, handicrafts, sericulture, jute etc.)
would be launched to train approximately 26.75 lakh persons over a span of 5
years.

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170. The scheme would be specifically tailored-made to suit the requirement of
entire segments of textile sector providing for a direct linkage with the job
requirements in textiles areas. Apart from upgrading the existing infrastructure
and resources of organisations within the Ministry of Textiles, participation of
private sector in the training programmes shall be the major feature of this Scheme.
The Scheme would address the existing and imminent skill gap so as to ensure that
the textiles sector takes a quantum leap forward by 2015.

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 Financing Requirements

171. The non fiscal concessions envisaged under the National Fibre Policy would
require enhanced plan allocations. A plan allocation of Rs. 32000 crores over the
XII and XIII Plan period would be necessary for implementing the TUFS scheme
for composite and integrated mills.

172. Textiles Ministry would also be seeking additional Plan allocations for
implementing the other non fiscal measures envisaged under the National Fibre
Policy. Plan allocations for Textiles Ministry have been witnessing a percentage
growth of 25 percent in the 1997-2010 period. To implement the
recommendations, Ministry of Textiles would be approaching Planning
Commission for enhancing the Plan allocations by 25 percent per annum till the
XIII Plan Period.

173. There would be substantial financing requirements for implementation of

TUFS given the projection of growth of fibres in the next decade.

174. Ministry of Textiles would interact with the Ministry of Finance, Department
of Revenue for the fiscal concessions envisaged under the National Fibre Policy.

175. There is likely to be a significant increase in domestic consumption of all

textile products given the favourable demographic profile and enhanced purchasing
power of the Indian consumer. The National Fibre Policy envisages to meet these
rising demands with a timely acceleration and growth impetus to Fibre sector of
India.

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