Despite all efforts by the industry and the Government during the last 3 fiscal years, Indian apparel export has been going down, and there are thick chances that even in the current fiscal, it may see the same negative growth trend.
There are many internal and external reasons for the same; one of them being lagging behind in man-made fibre (MMF)-based apparel in the overall product basket. As per the official data, India’s export of MMF-based apparel is only 10 per cent of its total apparel exports. It is hardly US $ 1.6 billion, whereas the world trade is about US $ 200 billion.
A major chunk of the industry feels that if India gets necessary control over the production of man-made fabric as required by the overseas buyers, it will increase India’s apparel exports in a big way.
The irony is that India produces almost all types of synthetic fibres including polyester, viscose, nylon and acrylic. Not only that, the country is also the largest producer of polyester yarn.
The world predominantly needs MMF textiles and clothing materials. Indian MMF products account for 20 per cent of the total T&C exports, whereas in China and other textile exporting countries, it is 80 per cent.
India’s export of man-made filament is huge, but the import of the same is also reasonable as the given below data by the Ministry of Commerce speaks for itself.
India exported man-made filaments worth US $ 2.29 billion in 2018-19 and US $ 2.39 billion in 2019-20 (growth of 4.37 per cent). At the same time, the same was also imported at a large level, of worth US $ 1.03 billion in 2019-20 and US $ 0.97 billion in 2018-19 (the import increased by 6.33 per cent).
Similarly, India exported man-made staple fibres of US $ 1.9 billion in 2018-19 and US $ 1.6 billion in 2019-20. Import of the same was US $ 0.93 billion in 2019-19 and US $ 0.95 billion in 2019-20.
Indian apparel manufacturers are mostly unable to find man-made fabrics as per the specifications of their buyers in India, and even if they get, prices are very high. At the same time, processing is also one of the weakest links in the entire process. Time and again, it has been highlighted that there is a strong need to increase the focus on MMF and steps are required on multi-levels for the same.
But now, there is some positive movement at various levels by both the industry and the Government. As for the industry, the Apparel Export Promotion Council (AEPC) and The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) started working collectively, promoting exports of MMF and some other leading companies in this field. Just a few days back, AEPC called for a joint effort to increase MMF-apparel export. Their collective efforts include mutual discussions, increasing know-how and new developments regarding man-made fabrics.
The AEPC is also willing to focus on R&D regarding the production of MMF fabrics like international standards, and has requested the Government to provide them an aid of Rs. 25 crore for the same.
In fact, collective efforts that have been missing from the industry for long can actually change the conditions now. Sanjay Shukla, Team Leader, Triburg, strongly feels the same, “Working in our silos, in our own space gives us limited success and we are not progressing in this area. I am sure that with the initiative, we can change the fate of our industry and can compete globally.” Triburg is the biggest Indian buying house, working with many prestigious buyers across the world.
As far as efforts by companies are concerned, Grasim Industries Ltd., the largest producer of Viscose Filament Yarn (by Grasim’s brand Raysil) in India, is leading the way. VFY is manufactured from wood pulp and is 100 per cent bio-degradable and eco-friendly. The company’s Global Head – Marketing and Business Development Manmohan Singh says, “In the last 5 years, the viscose fibre-based apparel export has increased 11 per cent, whereas exports of most other fibres have either declined or remained stagnant. It is due to our collaborative efforts with our value chain partners, and the promotion and awareness we created in the space.”
At the same time, it is also important to mention here that the Competition Commission of India, in its order dated 16 March 2020, (case No.62/2016), levied a penalty of Rs. 301.61 crores on Grasim Industries Ltd. for abuse of dominant position in the market for the supply of VSF to spinners in India; Grasim was found to be charging discriminatory prices to its customers, besides being found to be imposing supplementary obligations upon them.
The industry is also struggling to get the complete know-how of MMF product categories, and so, the roles of all stakeholders become very important to guide the industry at every level. Known for his expertise in processing and overall textile industry, Anjani Prasad, CMD, Archroma India, suggests that one should not compromise on quality and still be competitive. He is willing to support the industry in whichever way possible.
Despite the Government support, more help required!
Anti-dumping Duty (ADD) on different types of MMF remained a big issue over the years, be it purified terephthalic acid (PTA), acrylic fibre (AF) or viscose staple fibre (VSF). The good thing is that now it seems the Government is supporting the industry, as in the beginning of this year, the Union Government abolished ADD that was levied on imports of PTA (a chemical). It proved a huge relief for the domestic manufacturers of polyester. PTA is a crucial raw material used to make various products, including polyester fabrics.
Just a few weeks back, it reduced ADD on AF imported from Thailand and has recommended nil duty for Dralon of EU. This is a huge relief for the domestic user industry, as the previous duty charged was US $ 162 per MT.
But these steps must increase. Recently, the captains of various segments of VSF value chain (10 leading textile and apparel bodies of India) submitted a joint representation to the Prime Minister Narendra Modi for the removal of ADD on import of VSF to achieve global competitiveness. It is pertinent to highlight here that during the last 4 years, the imports of VSF spun yarn have increased by 27 times.
Leading Indian companies in MMF segment –
|Polyester Staple Fibre/Filament Yarn|
|Reliance Industries Ltd.|
|Pasupati Acrylon Ltd.|
|Indian Acrylics Ltd.|
|Viscose Staple Fibre|
|Grasim Industries Ltd.|
|Nylon Filament Yarn|
Various stakeholders of Indian textile and garment industry have been raising the demand for fabric neutral policy, but there has been no strong or positive indication from the Government yet. Jagdish Hinduja, CMD, Gokaldas Images, Bangalore, highlighted the same issue at an industry discussion recently.
If anything with value addition is exported, it will not only help the apparel exporters who are suffering due to the limitation in MMF, but will also benefit the entire value chain. India’s ambitious target to achieve US $ 350 billion by 2024-25 can be realised by doubling the country’s fibre-based needs. Yes, it is not easy at all, but looking at the scale of opportunities, Indian textile and apparel industry can achieve the same by working towards it, collectively and strongly.