CITI association have made one consortium for export promotion councils, had meeting on
18 th May 2024 at SRTEPC Mumbai office for the discussion, how to improve export and grow
the industry. Association representatives from SRTEPC, TEXPROCIL, CMAI, SGCCI,
TEXPROCIL, SIMA, AEPC etc.
Industry Growth:
Industry stalwarts discussed, how it becomes more than double is what industry is looking
at, today there are a lot of challenges in the business and things need to get better at how
we can become more competitive. If a country is growing so GDP is growing that means
there will be more money with the consumer and we hope there is more demand for the
textile, but sadly it has been declining actually. Some studies published where it has shown
and we have seen that the spending on other discretionary items like travel or mobile has
gone up in the last two years whereas spending on textiles has become less than half. So all
this is impacting us and for that reason we are having of issue in value chain. So in these
circumstances how do we reach three hundred and fifty billion is what we are trying to
thinking actively. This is not an easy task but since the government has set itself and every
question is asked we have to deliberate and see how to scope on it, Few Reason as follows
for no growth of textiles:
No economy of scale in India in the downstream industry; for that reasons many
brands, big brands are not willing to come to India. They already have partnerships
in Vietnam and China because of the whole supply chain they don’t want to break
that come to India and take a risk.
Having more diversity in the production and also temporary irritancies which in our
way, how to get away with them restrictions on imports things like that QCO. Value
chain needs to grow they must get raw materials whether it is cotton, viscose, or
polyester at a competitive price.
Issues with sustainability, carbon footprints, so this is also we have to learn so this
what the industry is been asked to get ready for because you know till 2 years ago
nobody knew about circularity. In last two years there has been a lot of visibility
increased and these are going to be very important in the next 2 years. Carbon
footprints, sustainability, people are not talking about that textiles are the second
largest contributor of waste into landfills. The aeronautic industry emits more
textiles, it’s worse than cotton or polyesters.
Consumption in INDIA
When you give more money in the pockets of the people and have fewer phones people
wait in a queue to buy phones for one and a half lakhs whereas they are not willing to buy
clothes so I think more disposal income in their hands in consumers and we bring more
items into the offer. When we talk about consumption you need to understand that the
Indian textile industry is very old extremely robust and has a reputation right across the
entire value chain we are very large and we have been successful for many years as a
growing industry always when you are going to the next stage takes time so when we see
that our aspirations for consumption grow up both in terms of volume, value terms coupled
by last what we have seen in the last four-five years of disruptions across the global value
chain when you see COVID has happened consumption went down then just suddenly went
up and then again there was a lot of consumption and short of pipeline clogging of goods
right through the entire retail process was happening so in the last 18 months the textile
value chain has changed, both in MMF and cotton have come down and chairman of CITI
and at not we are deliberating how we now go back to full-blast, more Indian consumption.
The chairman rightly said that we have to see how money gets into the pocket and there’s a
larger question but our idea is how we get enough raw material at the right quality to make
sure we get value-added products of the right kind into the hands of consumers.
Consumption, we want to consumers to come out and start buying when they have enough
disposable income but such are the times when we as an industry should lead a cause to our
textile proposition are we going to sit down and wait for the market demand to revise or we
going to bring during such time a value-added or distinction in the form of good story of
why textile is sustainable why our Indian product is traceable and fairly produced articles all
these activities, a need of the hour is consumers are very mindful on spending. One big part
of sustainability is also to go minimalistic. Does India want to play a catch-up role in the lost
battle of playing the volumes or does India want to position itself as a sustainable producer
of textiles for the future which is a more organic foundation than you know the policy-
driven sparks. It’s the strategic call we as an organization should take and that’s what we
have deliberated; how we can add value to our consumers by bringing sustainability to the
table or a good story of textile specifically Indian textiles to the consumer that’s the strategy
we would like to work reviving the demand of the consumer.
Export Potential
The larger question that seized up this forum is how we increase exports because there is a
much bigger world out there of which we have been a part of the supply chain but we want
to make it much bigger. That would take making sure that there is adequate quality of raw
materials and that the entire value chain comes together to make sure like you know we are
creating value and the right value proposition for the global audience. So materials,
processing, discussions of how the current policies, subsidies or rather incentives. Though
subsidies /incentives is not right approach, though Ministry of textile given PLI and others
schemes, we have to see how each industry stakeholders looking and to take a perspective
of growth for the next two years how will we go there. The challenge are many, the Ukraine
– Russia war making the pipeline clogging. Global consumption has gone down. It has been
affected and so those are the deliberations we are looking at and we have ways it might not
be immediate but we have ways of reaching there.
Tariff Regime
Lower tariff regime, we all support and should be; wherever we can buy something cheaper
should be allowed to be imported so that our end product is competitive and we can
concentrate more on our end product. Any restriction any protection on the upstream
segment is something that needs not to be there. the prime focus given statement was that
we have an export market with a lower tariff It is unfortunate about the textile world trade
today that people want to from a developed nation that does not have the preferable just
because they are offering cheaper products or a lower tariff of 4 to 5% the whole shift
towards that nation. So this is the unfortunate world practice today. It is a basic norm for
any textile-producing country to enter that specific country to have a lower tariff. So we
seek the role of the Commerce Ministry crucially on this. We look forward to many more
FTAs to come. It is given for sure that textile will be zero to zero for India. So we look
forward to a lower tariff. This will aid in increasing our exports exponentially but mindful of
the fact that today’s future trade will not define only the lower tariff but also the nontariff
barriers of particular importing countries where one should also start looking at it. We are
seeing Europe. Crafting a textile policy that will be out in 2027 I have been told the policy
very soon , So say we get a zero duty to Europe but still if we don’t fall in line with their
expectation of quality traceability sustainability we stand no chance. So along with low
tariffs, we also need to align ourselves. To be more consumer demand and sustainable
textile producer country.
Skilled Labor
Skilling is concerned individually at their level industry has been working on it for years on
their own. But in the last few years, the government has also come up with policies. The
smarth scheme and many other schemes from Human Development council. So through this
more incentives are being given for skill development and all segments are implementing
this in different forms and at different scales. As far as child labor is concerned we believe
that over the years industry has progressed and in general probably child labor is
nonexistent in most of the industry. Again it’s like saying somebody believes that in India we
still have snake charmers roaming the streets. So that way forced labor, we don’t see in this
country. So, we are focusing on the present and clearer picture. First of all, formalize our
intent of avoiding child labor and post-labor and thereafter we demonstrate that it is being
followed. One point should be noted that today textile industry employs over 50% which is
the largest contributor to women’s employment in the country today. Skill will remain the
challenge. But textile is one industry where the entry barrier or the low-skill workers can
also be part of the value chain. So while we look forward to higher skilling amongst the
laborers, textile per se also gives the economy a boost because it can employ a low skill,
especially the women workforce. So this is a very important sector one must note as far as
skill low-skill work employment is concerned.
Women Health and Welfare
Usually when we talk about women’s employment health is always part of ESG where the
instruments from the government which is provided are taking significant strides in
providing good health care. Health care to not just for women but also for all employed
labor. So there are good schemes, and there are good instruments; however we do need an
infrastructure boost from the government in ECIS in terms of doctors and hospitals. This is
the arch of the industry which we have been repeatedly putting to the government and
from time to time it has been updated.
Already there is a lot of visibility on the facilities available for women workers not only
women ; even men workers these days whenever there is any audit anyone who comes for
an audit from the brand the first thing will go is looking at the crash and looking at the
toilets and looking at the canteen facilities. So I think whether we like it or not we are all
working towards better facilities for the entire workforce in the factory and we have a
dedicated hostel for women and young ladies. You should take a case study in many
southern parts of India where they have extremely good social development schemes
wherein the company takes owners of the child’s education. And once especially the girl
child once she graduates automatically she enrolls in the employment and the companies
have a dedicated hostel for women. The working environment is the larger grater safer
place, In the South few mills have women workers, don’t want to go back home they are so
happy , they get married , company look after their dowry also. There is a very clear
example that we can share we can give you data on how the quality of life. We can share
data with you we can share data-specific examples of how some mills make thousands of
their workers educate and graduate every year and then move on to IT jobs. on a nation to
the nation competitiveness among the southeast Asian or south Asian nations including
china as supplier India’s track record in terms of its In protecting and fostering the quality of
life of its labor has been at the highest standards and that’s broadly been there not a single
order has been lost to India because of any such issues, on the other hand, we are generally
and that’s also driven by 20 years of very strong compliance from the apparel brands and
the consumers who source from us. Who makes sure that the quality of life of the people
who work in those factories is good there’s a lot to do just to supplement you know we
already have more than 20 years. Now a separate code of conduct while employing women
in textiles and we have tied up with a few certifying agencies also to give star ratings. So
that Is one more thing this is a voluntarily developed code of conduct by the industry itself
number one and this code has been adopted even by the government and recent
development now even actually has come out with a scheme called women empowerment
in the textile industry so that is again the industry is working very closely and you know in all
textile units this internal compliance committee again is working very aggressively and the
protection to women round the clock whether they are coming from outside or staying in
the hostel we have got a separate scheme and systems even training system we have and
the textile industry may be the one of only one industry where largely women employment
had been employed even from the 1930s and even in 1930s we had separate women
ministry even when trade unions existed so women are fully taken care and even as for ILO ,
textiles jobs are more suitable for women than men that is the reason largely women
workforce are employed in textile industry.
QCOs and some exemptions
Availability of raw material QCO and some exemptions that were made for under advanced
authorization. Industry still await exemption from QCO for advance authorization in the case
of polyester PSF and filament. See the government has appreciated that we should be
allowed to import the raw materials which is not covered by QCO; for exporting our
products, many times the buyers are insisting that from where we buy the raw material.
While the textile ministry has accepted it and granted the exemption for products within
their domain the chemical ministry is still to accept the exemption to polyester-related
items or chemical-related items. And then also negative certain structuralism products
which are not made in India. There are certain yarns, certain fibers which are not
manufactured in India for which the value addition we are not able to gain because of the
non-availability of raw material. So it is our view and it is our submission that for such items
at least the QCO should be exempted. Chairman just to supplement the Ministry of
Chemicals and Fertilizer already had a stakeholder meeting for exempting polyester also
from QCO so we are waiting for the announcement on this right.
Capacity Utilization
Average capacity utilization is around 65 to 70 percentage maximum. The demand in India is
not picking up. First, we had a problem with MSMEs. Now election issue. Demand lifting in
India is very poor. Once the improvement in the geopolitical situation, Things improve all
over.
Discussion happened during the meeting will be presented to ministry.