New Delhi, May 25 (IANS) The Indian textile industry is expected to achieve $55 billion of investments by 2010 and create employment for 65.4 million, provided reforms are initiated at quicker speed, according to The Associated Chambers of Commerce and Industry of India (Assocham). A study brought out by Assocham on `Indian Textile: Weaving a Global Spin’, suggests that Compound Annual Growth Rate (CAGR) of the sector could go up at 22 percent by 2010, if the reforms are initiated.

The study warns that due to the bottlenecks, the projected investment for 2010 could fall to $16 billion from the projected $55 billion and job prospects drop. The predictions for CAGR of 22 percent by 2010 would slip at 6 percent, said Venugopal N. Dhoot, president, Assocham.

“The government should align the duty rates so that textile manufacturers can utilise the unused funds,” he said.

“Custom duty of 7.5 percent charged on import of PTA (Purified Terephthalic Acid) should be scrapped and additional 4 percent customs duty levied on textiles and clothing should be refunded to exporters,” Dhoot added.

The study also points out that existing schemes meant for various segment of the textile industry needs to be brought under a single umbrella to minimise procedural and bureaucratical hurdles.

The chamber has recommended easing of interest rates on export credits, speeding up the clearance of excise duty and central sales tax reimbursement so that these measures act as cushion and help exporters to realise higher export proceeds.

“The textile industry requires fresh investment in capacity expansion, modern technology and machine installation. The sector attracts lowest level of foreign direct investments in spite of the fact that 100 percent FDI is allowed in it under automatic route,” Dhoot added.