"The domestic textile machinery manufacturers cannot meet the demand of the sector. We are looking at easing imports of machinery to ensure that the demand is met," Joint Secretary in Textile Ministry Qaiser Shamim had said last week.

He said the government was working for more joint ventures between foreign machinery manufacturers and Indian players.

Textile industry sources said more and more Indian textile companies are bidding for acquisition in Europe and the US in search for modernisation of machinery to meet the growing demand for textiles in quota-free international regime.

There had already been a spurt in acquisition by Indian companies. Three months back, export major Orient Craft acquired Levi's unit in Spain for Rs 60 crore and this was followed by two more such deals, including by GHCL, which acquired US company Dan River for $17.5 million.

Vardhaman Polytex Ltd, the flagship firm of Oswal group, acquired two units in Hungary and Czech Republic in the last two years.

Textile industry watchers said the acquisitions gave Indian companies the modern

machineries at competitive prices and also market network in some cases.

The supply constraint at home has aggravated since the onset of quota-free regime, which triggered a spurt in demand for Indian textiles abroad. India has only one textile machinery manufacturer.

According to Northern Indian Textile Mills' Association Secretary KJS Ahulwalia, five to six more companies were looking at overseas acquisitions as a more viable option for machinery modernisation.