India's textile and garment producers have been given a huge boost after the government announced it was to review its approach to taxes and investment in the industry.

The Union government is to shed its approach of export-led growth and instead strengthen the domestic textile industry and market as a guarantee of competitiveness in the global market,

Priority will be given to attracting investment in the textile industry and ministers will restructure excise duty rates to provide a level-playing field and discourage fragmentation for the spinning, weaving, dyeing and knitting sectors.

The changes were announced by Textiles Secretary, Anil Kumar, during his address to the annual Textiles/Garments Conference organised by the Apparel and Handloom Exporters' Association (AHEA).

He said the government was also considering calls from small units that they should be given the option of availing themselves of the 12 per cent upfront capital subsidy scheme of the Ministry of Small-Scale and Rural Industries as an alternative to accessing the Technology Upgradation Fund (TUF) for the textile industry.

Mr Kumar added that it was due to the importance that the government attached to the textile industry for its employment potential that in the last budget, concessions had been made for the depreciation and modernisation of power looms.

He told delegates that the subsequent levy of excise on branded garments was intended to ensure that there was no break in the Modvat chain, while the removal of the value ceiling for several textile items and inclusion of shuttleless looms not older than ten years under the TUF were other initiatives meant to help the industry, including the garments sector which used domestic fabric.

Mr Kumar's address came as apparel exporters expressed concern that the finance ministry had totally ignored their sector while affecting a partial roll back of the cut in duty drawbacks.

"For the past few days, we had been given to understand that the cut in the duty drawback rates would be restored for the apparel sector particularly. But  unfortunately, not even a single apparel item figures in the list announced yesterday, although several non-apparel items have been included," said a senior official of the Apparel Export Promotion Council.

The apparel sector, he said, was specially in need for restoration of the drawback rates to the original level as the sector, which had traditionally accounted for a substantial chunk of the country's total export earnings, had been passing through a bad patch in recent months.

He warned the government that several apparel exporters had already shifted their bases to other countries such as Bangladesh, Bahrain, Egypt, Maldives and Kenya, and that more would follow unless action was taken.

His plea for help came as the country's textiles minister, Kashiram Rana, warned that textile exports would be hit hard by the recession facing the US in the aftermath of the recent terrorist attacks.

The US accounts for 50 per cent of India's garment exports but Mr Rana said his ministry had already agreed to spend Rs 140 billion on development and modernisation of textile industry.

He also announced plans for 10 garment parks around the country, including New Delhi, Gujarat, Tamil Nadu and Maharashtra, to provide impetus and guidance to garment manufacturers.