Friday, August 28, 2009

Textiles from India. Dreams of a Scorpion..

Export. India has always had a problem in finding something to export. At each and every level, what happens is that the government subsidises them so much that it is like subsidising the consumer overseas. The textile industry in India is perhaps the finest example of why we cannot go up the value chain. We are happy with exporting grey cloth and some made-ups. Companies like Arvind Mills go through the revolving door of economic fortunes. When they set up a denim making plant, other poor countries were busy setting up a finished denim making plant! Indian textile has yet to put a single bloody brand in any part of the globe, except a Raymond to cater to NRI's in the middle east.! India does not have any competitive edge in textiles or garments. Why make it a big thing? Instead, why not let the big time fashion designers come in to India, give them free space and let them set up design shops here. Maybe they will also use Indian resources and create some jobs. Do not waste tax payers money by letting mills export commodities at below cost.

Companies like Arvind Mills have cost the exchequer hundreds of crores in terms of bad debts written off by banks as well as export subsidies. India would have been better off without such a company. The only benefits seem to have gone to the founder family, who have been living in style generation after generation, while the workers, bankers and other shareholders bled.

Wonder why the government is still coming out with stupid schemes like allowing them duty free import of capital goods. This will only encourage companies to export below cost. And we will end up exporting power .

It is time we recognised that a rethink on what India can really export, profitably, without any subsidies is possible at all. Otherwise, let us stick to the airconditioned sweat shop model of our so called IT industry, which at least brings in dollars, creates jobs and does not rob peter to pay paul.

India cannot be a viable exporter unless there is power at global costs and of gloabal quality. And the capital to put in. It is also impossible for Indian companies to do away with the propensity to cut corners when it comes to quality. They always think that what is good for the domestic market will do for the global market, which is spoilt for choice.

I would rather that the government let me have basmati rice at 40/- per kg instead of exporting it. Why should I pay Rs.80/- per kg as a domestic consumer? I am subsidising the foreigner and the domestic exporter is a parasite who is living off the others.

It is disgusting to see that everyone is justifying free loading. All in the name of vote bank politics.

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