FICCI suggests 5-year policy to revitalize Indian textile industry

FICCI suggests 5-year policy to revitalize Indian textile industry

By Our Special Correspondent

MUMBAI, FEB. 05—

Recognising the need to turnaround the Indian Textiles and Clothing  Industry, FICCI today suggested a five year policy to revitalise and restructure Indian  textiles industry.

The Policy “Indian Textiles & Clothing Industry : 2015” aims to  neutralize the impact of economic crisis on Indian textiles industry;  diversify our export and domestic market; encourage consolidation of  SME enterprises; encourage maximum value addition in the country;  deepening fibre consumption of India; building of 20 global brands of  India; promote manufacturing of hightech fibres and technical  textiles; encouraging energy efficient and emission reduction  technologies; increased indigenisation of textile equipments and  increased technological support, FICCI said.

The need for such a new policy arises in the wake of changing global  economic scenario in which a number of countries like Vietnam,  Bangladesh, Pakistan, Turkey etc are givingfierce competition to Indian textiles and also to provide inherent  strength to the industry, FICCI pointed-out. Also, some of these  countries have introduced ambitious textiles policies last year only.  FICCI said that there is a need to infuse confidence, through policy, 

in the industry which has suffered the most because of economic crisis  and rupee appreciation in the past.

The policy, FICCI said, targets steady growth of 15% per annum of  domestic textile industry and 20% per annum growth in our exports for the next five years in  order to enable us to double our share in world textiles and clothing  exports (Hence the name ‘20-15’ for the policy).FICCI noted that if we are able to achieve 20% growth in our textiles  exports per annum and 15% growth per annum in domestic production then  our domestic textile market size would be $ 106 billion by 2015 and  exports would be around $ 66 billion.

Given the long term growth of 7% in world trade in textiles, India’s  share would be around 6.6% in 2015 at a growth of 20% per annum, which would be almost  double of India’s currentshare of 3.4%. FICCI said that the Indian textiles sector’s growth has  been lagging behind the growth of the manufacturing sector as a whole.  In the last six years the average growth of the manufacturing sector  was 8.3% whereas that of textiles sector was only 5.3%. During April- November 2009, while the manufacturing sector registered a growth of  7.7%, the textiles sector grew by only 5.8%

Elaborating the main components of “20-15 Policy”, FICCI said that the  growth of garmentsector, which has maximum scope for value addition, is today hampered  because of number of constraints. FICCI noted that despite the fact 

that in India the total production cost of ring-spinning and knitting  and weaving of ring yarn fabrics are the lowest in the world, India  does not have a significant share in value added garments in global  trade (only 3%).

The suggested policy, according to FICCI, should focus on making India  a manufacturing hub of value added garments and ensure that country is able to cultivate  20 internationally famous brands.The aim of the policy would be to achieve 15 to 20% share of these  branded items in our exports in next five years, FICCI said. On fibre  consumption, FICCI said that there is need to deepen our fibre  consumption which remains very low.

Today, the average world per capita fibre consumption is around 10.8  kg and that of India is around 5 to 6 kg only. Whereas, FICCI noted that per capita fibre consumption in China is 14.6 kg, in North America it is 38 kg and in  Thailand it is 19.8 kg. Within this, our per capita consumption of man-made fibre remains very low at around 2 kg compared to 12 kg in China  and 11 kg in EU, FICCI observed.

The policy should try to achieve higher fibre consumption by  increasing domestic textile demand, expanding reach in rural areas and  exploring new products, FICCI pointed-out. The target should be to at  least double FICCI for increasing textile demand in rural areas the  fibre consumption in next five years. Another main task of this policy  would be to align the fibreconsumption ratio (ratio of manmade fibre to natural fibre in  consumption) of India, which is currently around 40:60, to the world  norms (60:40), FICCI stated.

Emphasising the need for this, FICCI said that globally market share  of cotton decreased from 62.4% in 1960s to 39.5% in 2008. Most of the decline in 

consumption of cotton occurred in developing countries where the  market share of cotton fell from 60% in early 1980s to 35% in 2008.  However, in India the market share of cotton has come down from 69% in  1996 to 62% in 2008.

FICCI said that in India this ratio is almost the reverse of the world  ratio. Long term projections indicate that consumption of other fibres  is projected to grow faster than cotton consumption and market share  of cotton is expected to decline to 30.5% in 2020, FICCI observed.

In this context, FICCI said that it is important to adjust our  policies so as to increase the consumption of man-made fibres in the country.

Also, the policy should try to achieve maximum consolidation of small  and medium enterprises in the textiles and garment sector so that  country can reap the benefits of economies of scale in the global  supply chain, FICCI emphasised.

Currently, the domestic industry is dominated by small and medium  enterprises and a number of them in the unorganised sector.  Consolidation will help the industry in realising its true potential,  FICCI said.

Another important aspect of the policy would be to achieve greater  energy efficiency and emission reduction in textile industry.

For this, industry would require greater technological support to  achieve lower emission and higher energy efficiency targets and to eliminate out dated  technologies. Further, FICCI said that the policy should also aim at  indigenisation of high technology textile equipments.

Currently, in- dustry is dependent largely on imports of machinery and  equipments. Government needs to provide technological support and  enhance innovation efforts to encourage domestic production of equipments and machinery.

In order to neutralise the impact of economic crisis on textile  sector, the policy should continue some of the policy measures provided so as to maintain steady  growth of textiles sector in the long run, added FICCI.