Page 33 - CII Artha Magazine 2022
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Sector in Focus



 contribute to the growth of   challenges which are faced by   companies strive to meet   7.  Export subsidy in China -   Expectations
 the economy, the demand for   the Indian textile sector in   ‘quality with zero   Textile exporters in China,   Lessons from
 personal care and childcare   diversifying into the technical   tolerance limit’, a key   including that of technical   from the
 products show a discernable   textiles space:  parameter for any   textiles, get 17 per cent
 escalation. Disposable   technical textile product.  VAT refund on export,
 products are convenient to   1.  Small Size and scale of   which is said to provide an   Government
 use and enhance the overall   operation - One of the   4.  High Logistics Cost-   incentive to the extent of   Bangladesh
 personal hygiene for both   biggest challenges faced by   Logistics inefficiency is a   9 per cent. This makes   for the
 mothers and children. Even   the Indian textile industries   major hurdle which comes   their products more
 The industry which had never   home care products like   including technical textile is   in the way of exports. The   competitive in the   Technical
 manufactured PPE kits in the   dusters and cleaning wipes   lack of scale. It is estimated   transport time within India   international market as
 past, turned Covid-19 crisis   have witnessed a huge   that, on average, the size of   as well as the turnaround   compared to exports from   for India  markets like the EU, UK, and   industry. Therefore, the Indian
 into an opportunity and   demand due to a rise in   the Chinese textile   time at ports is a major   India.   Textile sector   the US.  industry must accelerate
 started manufacturing them.   income, which in turn   industry is five times larger   challenge for Indian   progress on sustainability
 This made India the second   increases the use of   than that of the Indian   exporters as compared to   8.  Depreciation of rupee -   The Interest Subvention   Another advantage for   which may soon become a
 largest producer of PPE kits   non-woven fabrics.   industry. Due to this, Indian   the other countries like   Even though the recent   Scheme should be allowed for   Bangladesh is the presence of   non-negotiable requirement
 in the world. Keeping the   manufacturers face   China, Bangladesh and   depreciation of the Indian   technical textile sector. The   large-scale entities in   from global buyers.
 Atmanirbhar Bharat vision in   Besides, as environment   difficulties in achieving the   Vietnam. The cost of   rupee has helped   problem of inverted duty   manufacturing which leads to
 mind, the rise in domestic   concerns grow and the norms   desired scale to optimize   logistics become a major   exporters, the gains have   structure should be   higher cost competitiveness.   These factors have helped
 production of personal   for power and processing   costs.   disadvantage for Indian   been offset by a sharp   addressed and the GST rate   he Textile industry is the   growth story, especially in   According to industry   Bangladesh carve out a clear
 protective clothing for   units are strengthened, it is   manufacturers which is   increase in the price of   on inputs like polyester staple   T  backbone of India’s   ready-made garments (RMG)   reports, 80 per cent of   identity as a “favorable source
 front-line workers   expected that industrial   2.  High cost of raw materials   caused by poor   imported primary raw   fiber & viscos staple fiber   economy, and a key   where it is now the second   Bangladesh’s exports value is   for apparel exports” across
 medical products by   Aligned with Hon’ble PM   paramilitary, military, medical   filtration products, which is a   - There are various   infrastructure like bad   material like specialty   should also be reduced to 12   contributor to both   largest global exporter, has   contributed by large   the global market. This
 consumers. These factors,   Modi’s vision of ‘Atmanirbhar   and para medicals among   form of technical textiles,   speciality fibres which are   roads, time spent at   fibers and polyester. This   per cent. This would go a long   employment and exports.   multiple lessons for the Indian   enterprises while for India, 80   contrasts with India where,
 along with the higher returns   Bharat’, technical textiles play   others, would promote   would play a major role in   used as inputs in the   check-posts and ports,   has made export of raw   way to improve the   Textile products hold a key   textile and apparel industry.  per cent of the exports value   despite having a much diverse
 n India, the textile industry   and is projected to reach   in this segment as compared   an important role in almost   import substitution with a   safeguarding the environment.   production of certain   customs clearances, loading   materials more viable for   competitiveness of Indian   position in the global value   is contributed by MSMEs.   presence across the textile
 plays a pivotal role in overall   US$285.88 billion by 2028.  to conventional textiles, are   every sphere of social and   high degree of localization.   With growing environmental   high-end and advanced   and unloading as well as   manufacturers as   MSMEs.  chain, with India being the   Leveraging preferential duty   India is gradually taking right   value chain, there is no clear
 economic development. Being   attracting entrepreneurs,   economic activities of the   awareness, the need for more   technical textile products.   requirements for   compared to local supply.   world’s fifth-largest exporter   access to key markets, such as   steps in this direction and the   identity of India’s value
                                                              recently launched MITRA
                                                                                          proposition in the global
 the second largest employer   thereby making technical   country.   In fact, during the COVID-19   filtration, oil absorbent, and   Many such speciality fibres   trans-shipment.  The PLI Scheme has been a   for apparel, home, and   the EU and UK, has been a   scheme should help India   market. Hence, the Indian
 after agriculture, the sector is   Technical   textiles a lucrative sector for   crisis, the sector ramped up   landfill backing products has   are not manufactured   9.  Technological know-how -   boon for the textile industry.   technical textiles. However,   significant pillar of   build the relevant scale   government and industry
 one of the biggest growth   investment.  The technical textile market   its manufacturing capacity to   also increased.  indigenously in sufficient   5.  Rigid Labour Laws - The   Even as Indian   Woven fabrics, the raw   looking at the past, it is   Bangladesh’s success story.   advantage with globally   must develop India’s USP and
 drivers of the Indian economy.   Textiles :  is segmented on the basis of   produce millions of masks.    quantities. These products   overtime provided to   manufacturers are   material used for   evident that India’s recent   Consider this - for a country   competitive facilities.  ensure aggressive awareness
 Contributing 7 per cent to   The sector has also helped in   material, process and   This was a modest   The renewable energy sector   are being imported from   workers is restricted to   confident of manufacturing   manufacturing synthetic   performance in global trade   like the UK, where India does   creation across the globe.
 per cent to India’s GDP, and  A lucrative   the growth and innovation of   application. Based on material,   contribution to serve the   also uses smart products and   China, European countries,   100 hours of work in the   conventional textile   apparels, have been covered   has not been commensurate   not have preferential duty   Bangladesh has also taken a   COVID-19 has triggered the
 industrial output (by value), 2
        with its abilities. Exports
                                   access, but Bangladesh does,
 and the USA. The import
 technical textiles in
 three months period. This
 government and the country
 traditional textile products as
 the market is divided into
 products starting from
 17 per cent to India’s export   it contributes to value   natural fiber, synthetic   at large. The sector overall   composites which find its way   duties levied on such   cap should be removed   fiber to fashion garments,   under the PLI scheme.   declined by 3 per cent during   India’s apparel exports shrank   lead in capitalizing on the   redistribution of global trade
                                                                                          shares and a recalibration of
                                                              global theme of increasing
 Similarly, non-woven spunlace
 earnings, it is a source of   sector  addition across the entire   polymer, mineral, regenerated   had also upscaled its technical   into light weight components.   products increase the cost   and the system of paying   some of the technical   fabrics should also be covered   2015–2019 and by 18.7 per   at 6.5 per cent CAGR in   sustainability. According to   sourcing patterns, providing a
 direct employment for over   textile value chain. Due to its   fiber, and others. Based on   textile capabilities to make   These are stronger than the   of production thereby   hourly wages should be   textile products and their   under the scheme. This would   cent in 2020. In the same   2015-2019 while Bangladesh’s   BGMEA (Bangladesh Garment   golden opportunity for Indian
 45 million people and for 100   Owing to its distinct technical   significant contribution, the   process, the market is   available an array of health   conventional single material   adversely impacting the   implemented. Also, a cap of   manufacturing know-how   contribute significantly to the   period (2015-2019),   exports grew at 3 per cent.   Manufacturers & Exporters   textiles to stage a turnaround
 million people in the allied   performance and functional   technical Textile sector in   categorized into woven,   products ranging from masks,   products or alloys, saving   price competitiveness of   10 hours per shift should   is still missing in India.   growth of technical textiles.  competitors like Bangladesh   This performance gap is even   Association), Bangladesh has   and regain a leadership
 industries.  properties, the technical   India is   knitted, non-woven, and   wipes, gowns, disposable   precious resources for the   technical textiles.   be extended to 12 hours.  Therefore, a tie-up with   and Vietnam saw their textile   starker in the EU, where the   135 LEED (Leadership in   position as a top exporting
        and apparel exports growing
                                   apparel exports of Bangladesh
 textile sector is experiencing   gradually   others. And based on   sheets, disposable towels and   country.  internationally reputed   Technical textile, the sunrise   at 10-11 per cent CAGR and   grew at 9.6 per cent, while   Energy and Environmental   economy. As India strives to
 One of the segments of this   a consistent rise in demand in   becoming   application, the technical   lifestyle products.   3.  Lack of skilled manpower -   6.  FTA with EU - Countries   companies is necessary for   sector, offers an enormous   have surpassed India in   India’s exports grew at   Design) green garment   do so, it is important to
 industry that has received   the global market-place. In   one of   textile market is divided into   Since the process of   like Bangladesh and Sri   quick entry into   potential for growth. Hence, a   textiles exports.   only 2.6 per cent.   factories certified by the   build on learnings
 significant attention across   India too, the sector has   the most   12 sectors namely Agrotech,   Further, one of the most   manufacturing technical   Lanka have preferential   manufacturing of the   conducive policy environment   Hence, it is   US Green Building   from successful
 the world is technical textiles.   emerged as a fast-growing   significant   Meditech, Buildtech,   rapidly growing sectors in the   textiles is relatively more   access to large consuming   technical textile products.  which would transform the   Hence, as India   critical that India   Council (USGBC). This   competitors like
 Technical or Engineered   segment owing to its use in   pillars of   Mobiltech, Clothtech,   technical textile market is   mechanized, there is a huge   countries like the EU   sector and help India emerge   looks to stage a   continues its   includes 9 out of the   Bangladesh
 Textiles constitute products   an array of sectors. In fact,   the textile   Oekotech, Geotech, Packtech,   that of nonwovens which   requirement for skilled   which, incidentally, is also   The Government of India   as a leading producer of   turnaround in this   efforts of   world's top-10 green   which could be
 that are used for functional   there is a rising demand for   industry.  Hometech, Protech, Indutech   comes under process   workforce in the   among India’s biggest   have been taking multiple   technical textiles, is the need   new decade, it is   gaining   garment factories, on   crucial in
 purposes rather than for their   technical textiles in markets   and Sportech.   category.  As more and more   manufacturing process.   markets. Preferential   steps for addressing the   of the hour.  important to embed   duty-free access   top of which 500 more   charting out the
 aesthetic characteristics and   like agriculture, automotive,   people look for hygiene with   Skilled workforce and high   access, through reduced   challenges faced by the   learnings from our   to key   factories are in the   future course of
 have applications across   healthcare,   PPE kit, that falls under the   convenience, there is an   labour productivity thus   tariffs, gives Bangladesh and   technical textiles sector and   competitors who   process of getting the   action.
 various industries.  According   infrastructure, oil   application category of   enormous requirement for   Constraints  become key determinants   Sri Lanka a cost advantage   with the right mix of policies,   have tasted global   LEED certification. In
 to Verified Market Research,   & petroleum,   meditech or medical textiles,   disposables products,   which would facilitate cost   to the extent of 9.6 per   regulatory environment and   success in   comparison, India has
 the global technical textile   etc. as well as   is one of the 12 sub-segments   personal hygiene, feminine   The technical textiles sector   effectiveness in this   cent over India.  This   resolution of challenges, the   recent times.   around 30 green
 market size has been valued   for hygiene and   of technical Textiles.   care and home care products.  is currently at an evolving   industry. The   makes the Indian products     sector can grow at a rapid   And   factories in the
                                                              entire textile
 at US$190.33 billion in 2020   stage in India and considering   non-availability of skilled   less competitive in the EU   pace and take the technical   Bangladesh’s
 Moreover, since more women   the different dynamics of the   workforce hampers the   market.    textiles sector to new heights.  Mr. Neelesh Hundekari, Senior Partner, Head
 join the work force and   sector, there are various   quality of products, as   of Specialty Retail Practice APAC, Kearney  Mr. Karan Dhall, Partner, Kearney
 32  ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY                                ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY  33
 QUARTERLY JOURNAL OF ECONOMICS
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