Can India regain its textile glory? (Source: TNN Aug 16, 2019)
In Apparel Exports India has fallen far behind even small countries like Bangladesh and Vietnam whose exports are almost double than India’s meager $17 billion in 2018. China exported $145 billion worth of apparel. The biggest reason is India’s meager exports from the main product category that accounts for 70% of world trade in apparels-synthetic apparels which are mainly used in formal, sports and fashion wear due to higher durability and colour fastness. The synthetic fibres are also easy to blend with wool
, rayon, cotton and other fibres offering a much larger range of fabrics for the fashion and sports industry.
Globally cotton dominates spring and summer sales seasons and synthetics dominate autumn and winter. Since Indian apparels are primarily cotton based most garment units run six months as they do not have orders for synthetics/winter wear resulting in higher production costs as factories have to pay for fixed annual costs like rent, staff salary, interest etc. Also winter wears like suits are more expensive than casual cotton wear which require much less time to produce. If Indian garment manufacturers can build capacities to produce synthetic apparels for exports particularly high end formal wear they can run their factories for the whole year cutting down thereby on the over-head costs and entering the main stream synthetic export market which dominates world trade in apparels.
The main reasons why India is weak in synthetic apparel production for export markets are: Expensive raw material due to high customs and anti-dumping duties on raw materials like PTA, PSF,PFY, acrylic fibres and Weak weaving and processing. The textile value chain consists of yarn spinning, weaving, fabric processing and apparel making. While spinning sector in India is fairly large and modernized, weaving and processing have remained weak links forcing export of yarn and import of fabrics. Most weaving and processing units are small and lack modernization resulting in higher cost of production compared to China. Importing firms compare SAM(Standard Allowed Minute) while placing orders. Highly skilled labour and latest technology are a must to ensure a good SAM. However, most Indian garment manufacturers do not meet SAM requirements resulting in smaller share of the market.
Lowering of duties on synthetic raw materials, strengthening weaving and processing sectors and taking priority action to make more garment factories FFI compliant is the way out to regain our textile glory!
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