The Indian Ministry of Small Scale Industries (SSI) will meet representatives of various garment associations today in a bid to break the impasse on dereservation, which is holding up the announcement of the new textile policy, Asia Pulse reported.

While the garment associations have been demanding dereservation of ready-made garments, the SSI ministry is keen to enhance an investment limit from Rs10m-Rs50m for the sector without dereservation.

The SSI Minister, Vasundhara Raje, made a u-turn when she indicated that she was now willing to consider the views of garment associations about dereservation.

Dereservation has led to sharp differences between the SSI ministry and the ministeries of Commerce and Textiles.

Both the textiles and commerce ministeries have demanded dereservation of 15 items, including ready-made garments, leather, and toys from the list of 812 items earmarked for the SSI list.

The Indian textiles minister, Kanshiram Rana, has said that unless the issue was resolved, the new textile policy could not be announced.

About SSI
At present, apparel industry manufacturing is reserved for the Small Scale Industries (SSI). This automatically excludes all foreign investment in apparel manufacturing, unless the foreign investor is willing to endure a tortuous licensing procedure. At present, foreign companies can invest only in 100 per cent export-oriented manufacturing concerns.

Government body, the Apparel Export Promotion Council (AEPC), favours dereservation.

Dharmendra Kumar Gupta, former senior director, Apparel Export Promotion Council, explained that apparel exports from India are currently worth $5.3bn and account for 15 per cent of India's total exports.

Of these, 76 per cent go to EEC countries, USA and Canada. Exports to the EEC, USA and Canada fall under the ATC (Agreement on Textiles and Clothing).

Under the ATC, each country, including India, is allotted a quantitative quota for every item. Within these predetermined figures, competitive forces determine all marketing parameters such as price, product and source.