Industry experts have always felt that the industry has not been given its due, but with the new wave of positivity that has engulfed the business community in the country, expectations are soaring and many are opening up on what should be the way forward. In an exclusive interaction with, Apparel Online D.S. Raman, Sr. Vice President (Business Development – Fabrics), Vardhman Textiles Ltd., analyzes why he is sure of growth for the textile sector in India over the next decade. “Textile sector needs a long-term roadmap for sustainable growth and increasing competitiveness across each node of the textile value chain,” says Raman, a B.Tech in Textiles with a PGPX degree from IIM-Ahmedabad. Raman has spent almost seven years with Vardhman Group which is an institution in itself.
India has always been strong in devising strategies but has lacked in the implementation of efficacies. In the current Government, we hear about a lot of consolidated initiatives from all quarters – pumping up thrust on manufacturing, control on inflation, conducive climate for investments, dynamic decision making, etc. to attain confidence of both Indian and International investors. The Government’s stress on Skill, Scale & Speed – Make in India – Zero Defect & Zero Effect (on environment) thrust on participative and inclusive development – “Sabke Saath, Sabka Vikas” etc., is holistic in its approach for increasing production, export and generating employment.
From the textile point of view, the objective of increasing the export growth rate from 6-10% to 15-20% in next 5 years is commendable. The ministry seems to be clear on the short- and long-term objectives and developing strategies accordingly. Allocation of Rs. 26,000 crore by the Planning Commission to the Textile Ministry for overall support schemes and continuation of TUF, are welcome initiatives in the right direction. We also see thrust to increase exports of Textiles and Clothing to about US $ 64 billion in next 2 years and to US $ 300 billion by 2024-25, an achievable long-term objective which is setting the pace for various initiatives.
Integrated Textile Policy, a necessity…
It’s a necessity to have an integrated policy, since as a country we need to move forward with higher value addition in exports. We are quite a geographically variant country with different skill sets developed in each cluster. There are about 113 clusters – each one of them brilliant in few product groups. The logic should be to enable each cluster to concentrate on areas in which they have clear competitive advantage, so that as a country we get the most optimum output on the entire gamut of textile products. We should concentrate on achieving the global maxima instead of local maxima. The industry could not achieve the envisaged growth rate during the last few years mainly due to various policies relating to cotton, cotton yarn, export incentives, etc. There is a need for an integrated textile policy to support the domestic textiles and clothing industry to make it globally competitive by easing the regulatory burden, removing infrastructural bottlenecks, providing adequate raw materials and supporting exports.
National Textiles Policy should provide such a roadmap that provides stable strategy framework for the sector. India has 22% of world’s spindle capacity and is placed at No. 2 in the world. Further it has 61% world’s loom capacities (including handlooms). The strategy should be to exploit our strengths and increase exports in new markets such as Latin American countries, Eastern European Countries, Middle East. With China’s textile and garment export growth rate projected to slow down in next 10 years due to their rising cost of production and increasing domestic demand, the export space that would be ceded by China is open for other Asian countries including India to grab.
For concerted competitive manufacturing… Textile Parks are very relevant
As per my understanding, there are about 60 textile parks in India and some of these parks have been doing well. Just because some earlier parks were not doing well, should not be the reason to discourage the establishment of new parks. In order to bring in a concerted competitive manufacturing, textile parks are indeed relevant. The macro environment needed for the industry with infrastructure & manpower support can be provided more efficiently through such textile parks.
There is a plan to make TUF more broad-based by relaxing the terms of loan, assistance to upgrade to shuttle-less looms, extending subsidy to imported looms, etc. The draft touches upon various places to make it more relevant to contemporary issues facing the industry.
Investment needed is about US $ 120 billion, and we need to incentivise the investment in such a way that returns are attractive for the investors, encouraging them to make investments.
The concept of establishing focussed textile park with investments from specific countries is another logical concept. This would bring cultural matching among the players and is likely to yield good results. RIICO has created one such park to attract FDI from Japan and Korea. Establishing more such parks would help.
Mega textile parks with focussed attention with good infrastructure, capital and manpower support are keys to create competitive products. Higher operating efficiency would drive down the costs to make the products competitive for the world market.
US $ 600 bn Textile & Apparel Industry by 2024-25… achievable
With 12% CAGR the domestic market for textiles and apparel would be US $ 300 billion by 2024-25 from the current levels of about US $ 100 billion – with 20% CAGR, exports of textile and apparel would be US $ 300 billion; in total, a US $ 600 billion textile and apparel industry by 2024-25! Now, the question is – “Is it possible?” I would say, “Yes, it is achievable.” India has been growing at about 10%, while Bangladesh, Vietnam are growing at 18% to 20%. India can also grow at 20% in exports provided all the factors are synchronized. We need to promote value addition within the country and need to make the factors of production more efficient. There is a potential to generate employment for 35 million people.
Revised working norms and incentives to enhance Skills & Productivity
Skills and productivity of the manpower needs to be developed. Private-Government partnership is one possibility. Reforming of the labour laws to boost manufacturing – removing restrictions on women working in night shifts, allowing fixed term employment, revising overtime working hours, allowing units up to 500 workers to remain outside Industrial Dispute Act and allowing contractual labour without any restriction for EOU units due to seasonality of export business, are important steps to achieve goals.
