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TN textile sector seeking govt support to move up the value chain

YarnsandFibers News Bureau 2014-12-26 11:00:00 – Coimbatore

Tamil Nadu textile industry has lot of potential and is looking for government’s assistance to move up in the value chain. Their share of yarn exports was nearly 60 percent. The industry in the State accounts for exports of textile goods worth ₹75,000 crore a year. The value-added garments’ export was worth ₹30,000 crore. Keeping this in view the Centre in this regard needs to take necessary steps.

D Prabhu, Secretary, Texpreneurs Forum, Coimbatore speaking on Tuesday ahead of the programme on `Make in India-textile industry-opportunities & challenges’ being organised by a group of textile associations in Western Tamil Nadu here on Saturday, said that the spinning mills in the state accounted for consumption of 30 percent of the cotton produced in the whole country.

But despite its achievements, the industry has also been facing several headwinds in the past four or five years like the unprecedented fluctuation in cotton prices and competition from countries like Pakistan, Bangladesh and Vietnam in garment export. There were also a lot of opportunities with economic boom leading to market expansion in India.

The different segments in the entire textile value chain-from spinning to knitting, dyeing, weaving etc engaged professional experts to study issues concerning the sector that threw up three important issues.

Explaining the three key issues that impacted the textile sector, Prabhu said that bilateral trade agreements between countries had an impact on the industry. For instance, Pakistan enjoyed a duty-free status for its textile exports to the European Union, a luxury that was not available to India.

The four agreements that required government attention were India-Bangla agreement (South Asia Free Trade Agreement (SAFTA), India-Latin America, India-EU and India-Russia agreements. While the industry wants the India-Bangla agreement to be tweaked a bit, Indo-Russia agreement was yet to be finalised.

The textile industry also wants to be included in the India-Latin America trade agreement. Though Indian textile industry has a sizeable share of EU market, it was facing threat from competing countries that enjoy preferred duty treatment. The industry also wants to highlight the need to keep the manufacturing cost under check to remain competitive in the global arena. It would also impress upon the Centre with its response to certain policies that were under the consideration of the Centre before they were finalised.

It was at that time the Prime Minister Narendra Modi announced his 'Make in India' programme to make the country a global manufacturing destination and take the contribution of manufacturing sector to the country’s GDP from ~15 per cent to 25 per cent. A presentation of the study will be made at the seminar which would be attended by Nirmala Sitharaman, Union Minister of State (independent charge) for Commerce & Industry and Pon. Radhakrishnan, Union Minister of State for Road Transport & Highways, Prabhu said.

Prabhu felt that it was time for the industry to find newer markets for its goods rather than depend only on the US and EU. He said that Russia was importing annually ₹80,000 crore worth of textiles of which India’s share was `very negligible’. Russia was a big consumption market and he felt that the troubles Russia was witnessing over its currency rouble tumbling due to falling oil prices and due its stand off with the West over Ukraine are temporary which would ease over a period of time. In fact it offered a huge market for the Indian textile sector.

He said that barring clusters like Karur and Tirupur, others in Tamil Nadu in the textile sector were lower on the value chain because of which their margins were very thin. Unless the manufacturers in this sector moved closer to the customers by adding value to their products, they would not be able to bear the relentless cost increase. Hence the aim of the industry participants was to move up the chain to be at the top end of the value chain (garment production). There were certain weak links like processing which they want the GoI to address so that the industry could reach its full potential. He said that the textile ministry was `endorsing our view’ and had already discussed issues with the Union Textile Minister and Textile Secretary.

The seven associations that are participating in the programme are Tamil Nadu Spinning Mills Association, South India Hosiery Manufacturers Association, Karur Exporters Association, Erode Textile and Garments Exporters Association, Tamil Nadu Autolooms Cloth Manufacturers Association, Texpreneurs Forum and Andhra Pradesh Spinning Mills Association.

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