The Indian TEI should be encouraged by the Government to increase its capacity further to meet the demand of the different segments of the textile industry in a time bound manner.

The existing installed capacity of Rs.8,048 crore may not be sufficient to meet the requirement of Textile Industry, if the investment projections indicated by the Textile Industry for the XI Plan fructify. However, the investment trend over the previous couple of years does not show encouraging sign. Large scale imports of second hand machinery, particularly with the subsidy under the TUFS, are adversely affecting the TEI and its capacity expansion programme. FDI in weaving and processing machinery sector is not forthcoming. Proactive action from the Government might help the TEI to increase its capacity in the long run.