The government on Thursday said textile industry, facing the challenges of the post quota regime, has shown encouraging signals clocking 14.8 per cent growth in the first three quarters of this fiscal, but easing of entry-exit norms would further benefit the industry.
"There are some encouraging signals in the first nine months of the current year from the Indian textiles industry regarding its preparedness to meet the challenges in the quota-free world trade regime in textiles," H A C Prasad, Senior Economic Advisor in the Finance Ministry, said.
The index of industrial production for textile products (including wearing apparel) grew by 14.8 per cent in April-December, 2004 compared to 2.8 per cent in the year-ago
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period, he said.
Easing the entry-exit barriers will, however, be critical in determining the success of the manufacturing sector in general and textiles sector in particular to reap enormous potential benefits of the post-quota regime, he said.
Prasad also pointed out that small scale reservation has not succeeded in producing the expected results and has constrained investment in some critical areas like knitwear which has large growth potential.
"There is little justification in continuing such reservations as all such items are now freely importable," he said.
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