“This forecasting is on the basis of enormous studies. Indian textile industry in the last two years has added substantial capacity and still several large expansions are under progress but the growth in export volume and value is not significant as predicted by the research reports. In fact, India failed to capitalize on the quota free world textile market and registered a ‘moderate’ export growth during the first year and lagged far behind rival China .Statistics revealed that the exports of textile and clothing from India increased by 8.21 per cent to US$ 9.3 billion in April-November 2005. Whereas, China has been more aggressive and it’s export of textiles and clothing to US market increased by 25 percent against India’s 25 percent. In the EU market, India’s export grew 10.5 percent against China’s 80 percent. The data indicates India’s lack of ability to take advantage of the opportunities in time though many would like to differ from the opinion citing the fact that domestic market grew substantially due to the growth of retail sector . “In fact IMF’s Selected Issues paper for India points out the reasons for India failing to capitalise on the situation by attributing it to “problems of scale economies, inflexible labor markets, low rates of investment, lack of full duty drawback, and poor infrastructure.” Plannners and Government, will all have to sit up and workout clearly the road ahead in order that India does not miss progress on one of its prime industrial sector.”However, there are few significant factors responsible for delayed response to capacity expansion by Indian industry, which finally restricted the growth of export. The most significant factor possibly being the delayed reforms and introduction of industry friendly policy, schemes by the government followed by the lack of availability of easy finance. Infrastructure and tax regime are the second most responsible factors. Further, government and industry’s inability to draw foreign direct investment into the textile sector remain another factor and loss of opportunity . “With the current initiatives by both the government and industry, though delayed, would bring fruit by next year and India could finally be seen to be a significant player in the global textile market in the medium term. However, we still believe that the industry would fall well short of the target set by the ministry of textiles. The textile sector accounts for 20 per cent of the country’s industrial output and around 15 per cent of total exports in addition to providing employment to millions. Thus, the Indian textile sector must be given due importance while drafting policy for growth and needs more public private partnership initiatives. Source: textileintelligence.com .