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Recognizing the need for attracting large investments and to enhance the competitiveness of Indian knitting segment by exploring economies of scale, the Government has vide Notification No.S.O.420(E) dated 28.3.2005, de-reserved the knitting segment from SSI. The Government is of the view that this segment of the industry has vast export potential and in order to exploit the emerging opportunities, de-reservation is necessary. De-reservation of knitting segment would encourage large high-tech capacity building and increased flow of investments, which in turn will facilitate production of higher value added knitwear items for exports. This follows the Budget 2005-06 speech, wherein the Finance Minister made an announcement to de-reserve knitting segment from SSI.
Globally the growth in knitwear consumption and trade has been growing at a faster rate than that of woven garments. Investments in knitting capacity have also been growing at a faster rate the world over. However, the Indian knitting segment has continued to be reserved for the SSI sector. This reservation Policy has left Indian knitting segment behind in the global competitive race. The Government had de-reserved the woven garment segment from Small Scale Industries (SSI) w.e.f. 1.1.2001.
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