by Apparel Resources
23-July-2018 | 9 mins read
In July 2016, in a significant, but surprising turn of events, high profile and vocal Smriti Irani replaced Santosh Kumar Gangwar as the Textiles Minister. And the industry rejoiced as Smriti Irani, known for her aggression and quick actions, was just what the Indian textile industry needed after Santosh Kumar, who was soft spoken and submissive in public domain. Just a fortnight back, the central government had also announced a Rs. 6,000 crore special package for textiles. Indian textile industry felt that textile has finally reached a position of top priority for the government. Cut to 2018, looks like SMEs are not too pleased with Irani.
While apparel exports have taken a beating from October 2017 onwards, duty drawback rates have been reduced heavily, the long pending demand of industry ‘National Textile Policy’ is still pending and delay in GST refund has created fund shortage, people are debating on how successful the Textile minister has been. Further, the Government is just 8 to 9 months away from next general election, as the industry expresses mix opinions about the performance of Textile Minister.
Apparel Resources took the opinion of trade bodies, exporters, technology suppliers about how they evaluate Smriti Irani as the Textile Minister. There are some good things that worked for her like her proactive approach, as she has never shied away from representing the problems of the industry amongst other relevant ministries. “Her understanding of the industry in this short period of 2 years is amazing, and I still remember my first meeting with her as NITMA President 2 years back. Even though she was new to the industry, she met us alone and with full confidence. We had a nice 45 minutes long meeting and she listened to us for 80 per cent of the meeting and then reiterated our points for better understanding. Acceptance of the fact of being new and ready to learn, but still confident to meet alone, struck me a lot,” shared Sanjay K Jain, MD, TT Ltd. and Chairman CITI who is also associated with other trade bodies.
Industry saw many major policy initiatives in these 2 years like Demonetisation and GST. Sanjay accepts that the industry hasn’t done too well. He adds, “We need to understand that it was in this period that 2 big bumps came our way – ‘Demonetisation’ and ‘GST’ – both grappling with Indian rupee. I am sure the positivity with which the government is engaging with the industry and with the settling down of GST, the years 2018-19 are looking great. There are many things on which the industry and the ministry have been working together – we are hopeful of industry taking a firm shape in the near future.”
Prabhu Damodaran – Secretary, Indian Texpreneurs Federation, Coimbatore feels that Smriti Irani is doing well by addressing important concerns of the sector from time to time. With growing domestic market opportunity, textiles will do well in the coming days. “The only challenge for the ministry is to increase our exports. We can expect more focus from the minister on market diversification efforts (why can’t our embassies in important countries have textile trade officers to promote Indian textiles there?) and new FTAs in the coming days,” he says. The minister was instrumental in keeping 5 per cent GST for cotton textiles along with bringing the entire value chain under tax net. The minister can now try to bring the biggest reform of the textile sector – ‘Fibre Neutral Policy’ as advocated in economic survey and we are confident that she will focus much more on the performing clusters like Coimbatore and Tirupur because by giving little more support, these clusters can be the drivers of further job creation.
On the other hand, medium level apparel manufacturers are not happy with the minister and have their own logic. Rajendran, MD, Adarsh Knitwear, Tirupur strongly says, “I am not happy with her performance as a Textile Minister. It is in her period that business has gone down very badly in the history of India. We don’t see any action on FTA and that too after talking so much about it for very long. I think business is ‘dying’ in India as we keep losing our business to our nearby countries. We are also very serious to move to other countries.”
Mohit Singhal, Owner, Creative Clothex, Delhi holds similar opinion as he says, “I think she is the worst Textile Minister ever. Duty on import of garments from neighbouring countries has been reduced to 5 per cent whereas import duty on some fabrics is still around 26 per cent. Duties on fabric being higher than garments result in big apparel brands importing garments from the neighbouring countries. Domestic industry cannot access high quality imported fabrics due to higher duty cost than apparels, making them non-competitive. Factories will face shutdown – ‘Made in India’ should be changed to ‘Once Made in India’.”
Buck does not stop here, another exporter Pradeep Nahata, MD, Karni Exports, Jaipur has another bitter experience to share. In his words, “Smriti Irani is totally a failure as Textile Minister. Her worst step was Textile India 2017 exhibition in Gandhinagar. I wrote a letter to her after this event, but there is not even a single solution given by her. She does not understand the issues raised by exporters. We raised issues related to GST and others, but actually she did nothing. What exporters got all the time was only assurance!”
These reactions of apparel exporters seem natural, as textile ministry or the central government has some interesting schemes for sectors like handloom, silk-like integrated scheme for development of silk industry while apparel exporters felt ignored. On various platforms, issues were raised by apparel exporters to Smriti Irani and she stated that demand of apparel exporters also needs interference of Ministry of Finance and Ministry of Commerce and Industry. To get the support from these two ministries, two months ago, Ministry of Textiles and Ministry of Commerce and Industry had 4 hour long meeting in which all the EPCs ranging from Handicraft, Handloom, Apparel to Made-ups, Cotton, Jute, Wool, and Silk participated, but so far nothing concrete has come. The only satisfaction, and that too for some, is the starting of GST refund process.
Jute sector, weavers and artisans and hubs-like Varanasi which was the first priority of this Government, is also not very happy with the ground realities, as textile players from Varanasi also showed dissatisfaction towards the efforts made for them so far. Similar is the status of skill development schemes, the general perception is that there is a lot shown on paper but less work done on the ground.