People And Their Problems
New Delhi, 5 May 2007
India’s Export Potential
BOOM AHEAD OF TEXTILE
SECTOR
By Radhakrishna Rao
The booming south Indian textile town of Tirupur, described
as the knitwear capital of India, touched a whopping Rs.11,000-crore mark
through the export of textile products and knitwear during 2006-07.Of course,
the elimination of the multi-fibre quota provided a strong opportunity for
the Indian textile industry in general
and Tirupur’s knitwear industry in particular to boost their presence in the
multi-billion dollar global textile market currently dominated by China.
Studies carried out by the World Trade Organisation (WTO)
goes to show that since the abolition of the quota regime, export of textile
from India has grown by 14% and garments by 33%. Because India happens
to be the world’s third largest producer of cotton and the second largest
producer of cotton yarn and textile, it is all set to play a significant role
in the global textile market in the
years ahead.
All said and done, there is a growing realization in the
Indian textile sector that to
sustain country’s surging textile export , textile companies and production units
make vigorous exports to upgrade the technology and improve quality standards in addition to reducing lead time for the supply while
maintaining cost competitiveness.
Knitwear industry sources in Tirupur
make it clear that as is widely perceived, India
does not need to be scared of China
which is a clear leader in the global textile market. “They (China) have
their strength but we are also ramping up our operations and can hold on our
own”, says Chandra of Eastman Exports of Tirupur. He drives home the point that
over the last two years, Indian exporters have crunched their turn around time
quite dramatically.
As it is, not long ago, the time lag between bagging an
order and executing it used to be a few months. But now it is less than six weeks. Moreover, Indian textile industry
is willing to accept order for a few thousand pieces and also equipped to take
small orders for custom made items. On the other hand, the minimum order size
for the Chinese textile industry is 50,000. “The consolidation of knitwear
firms and the process of
corporatization are being varied out seriously as retailers in the European
Union (EU) and USA
prefer to source directly from the producers. We are consolidating our
individual entities of production and operation into a single unit to achieve
the much needed size essential to
meet the market challenges” says a spokesman of Tirupur knitwear industry.
The setting up of Netaji
Apparel Park
on a stretch of 220 acres on the outskirts of Tirupur has given a much needed
boost to the textile export from Tirupur. The park which houses more than 60
units is a joint venture between AEPC (Apparel Export Promotion Council) and
TEA (Tirupur Exporters Association).
Textile companies and knit wear units based in Tirupur, in keeping with the
trend in the Indian textile industry, are moving up the value chain by either
building or buying brands.
Of late, Indian exporters have started making it big in the
markets such as Spain and Italy where
exporters have been able to corner a large share of niche, high quality orders,
coming in mainly from the fashion industry. This success
is due to the fact that in the area of ethnic garments and high quality fashion
textile products, India has
a clear cut edge over China.
Yet another plus point of the fast growing Indian textile venture is the modest
success of the trendy garments,
designed by the Indian fashion creators for the high end West European market. In
an interesting development, the Indian handloom products known for their
gorgeous colours and shades, as well as rich design and excellent finish, are
slowly finding favour with a section of the high end buyers in West Europe and
North America .But India’s
share in the global textile market is just one-fourth of that enjoyed by China.
However, the resurgent Indian textile industry which happens
to be the biggest job provider after agriculture is hopeful of notching up an
export revenue of US $450-billion by 2010.India’s Commerce and Textile
Ministries are also quite bullish on the long term growth prospects f textile
exports. The Indian textile industry sources say that a number of small export
oriented textile mills are augmenting their production facilities with a view
to corner a larger share of the global textile market.
According to the Union Textiles Secretary, despite
infrastructural hitches, the Indian textile sector has been witnessing growth and has the resources to outsmart China
in the global market .The Government is concerned and wants improvements in
infrastructure., says the Secretary.
As things stand, the Indian textile industry occupies a
significant position in the Indian economy and accounts for 14% of the total
industrial production in the country. India is the largest exporter
producer of cotton yarn. Further, India’s spinning facility is the
world’s largest with quality and cost effective production infrastructure.
However, the trump card of the Indian textile industry is a strong raw
materials supply base, supported by skilled labour force. The industry which is
multi fibre based using cotton, jute, wool, silk and synthetic fibres, accounts
for 4% of the GDP and 22% of the foreign exchange earned by India.
But the weak point of the Indian textile industry is the
fragmented nature of operations with the
result that the small textile companies fail to make it big in the price
sensitive market .Besides the size related pricing disadvantage, the Indian
textile industry operates through a
large number of facilities, resulting in the loss
of operational efficiency and cost advantage.
On another front, the skyrocketing oil prices could eat into
the profitability for Indian textile mills. For major fibre intermediaries are
derived from petroleum products such as Naptha.
The Indian apparel sector boasts of more than 27,000
manufacturers, 48,000 fabricators and around 1.000 manufacturers cum exporters
.With a view to boost their export order, many big textile companies in India
are making heavy investment in technology up-gradation and augmentation o f
production facilities. ”Everybody is investing in capacity. We cannot expect to
gain all of a sudden but it will be positive”, says an Indian textile industry
analyst.---INFA
(Copyright,
India News and Feature Alliance)
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