Deregulate handloom sector to attract more FDI: Assocham

NEW DELHI: The government should deregulate handloom sector by bringing flexible labour laws to attract more foreign direct investment into the sector, industry body Assocham has said.

The chamber has suggested "complete deregulation of India's handloom sector with flexibility in labour laws to help textile economy attract FDI, upgrade technology and generate employment in Chinese way which spurred spectacular growth in its apparel export industry".

The total FDI approval in last 15 years in the textile sector stood at Rs 40 billion, of which less than Rs 3 billion was approved until recently, it said.

"This has happened because textile sector continues to struggle under shackles of stringent laws and has yet to be deregulated," it said.

Assocham Secretary General D S Rawat said that contract labour norms should be liberalised for textiles and garments sector, so that units can hire labourers for a few months without the compulsion of having to absorb them permanently.

The textile industry provides direct employment to around 35 million people. There are 2,722 textile mills in the country with a spinning capacity of about 37.34 million spindles.