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Cover Story | October 2015

The year that was

The expectation from the new government in the centre was very high. However the situations at the ground level did not alter much. The government´s attention was concentrated on macro issues. This could not lift the morale of the industry. It was the hope that 2014-15 would bring cheers to the textile engineering industry (TEI). But, the same did not happen as expected. The demand from the domestic textile industry remained sluggish in many areas. The liquidity problem hampered the growth prospect. The exports showed a higher trend. Perhaps, the TEI should be more export centric and develop the machinery accordingly to remain competitive.

The total domestic demand for textile machinery during 2014-15 was Rs 12,308 crore of which imported machinery constituted Rs 7,814 crore. Supplies from the domestic machinery industry amounted to Rs 4,494 crore, aggregating 37 per cent of the total demand. As can be seen from the chart on demand, it appears that the bulk of the demand was met through imports. The total capacity has increased from Rs 9,850 crore to Rs 11,000 crore. The raw material prices during the period under review were at the lowest in case of the textile industry. The availability of raw material was very good. Unfortunately the same could not improve the investment climate. The textile industry had been able to meet the export challenges, as well as growing domestic demand. However, the delay in the introduction of RR TUFS and its procedural bottleneck also adversely affected the investments. The non-availability of 30 per cent MMS scheme to the domestic manufacturers of shuttleless looms hampered the indigenous development of high-tech shuttleless loom. The approach of the sub-offices of the Ministry of textiles, adversely affected the disbursement of approved TUF loans to deserving units and the ´Make in India´ campaign. The preference of low-tech Chinese looms over domestic looms is due to cost advantage on account of duty free import and subsidy under the MMS scheme coupled with the incentives from the Chinese government. The domestic manufacturers are burdened with invisible higher transaction cost to avail the benefit of the nil import duty on critical components due to necessary permissions and time consuming procedures related to the same.

Production, exports and imports
The production of TEI recorded a growth of 3 per cent viz Rs 6,960 crore as against Rs 6,775 crore achieved during the previous year. The substantial increase in production of spinning machinery was responsible for this growth. It was expected that spinning machinery sector might increase their production further during 2015-16. In weaving sector particularly in the shuttleless loom category the growth rate was less due to uncertain situation created by the unfavourable MMS scheme under the RR TUFS. The domestic manufacturers are not being given due support by the user industry and the Ministry concerned.

Despite such adverse conditions, TMMA has been able to encourage five of its members engaged in manufacture of looms to form a consortium who will work with CMTI for development of rapier looms. The specification of loom selected is currently popular amongst users and is being imported in large quantity. The Department of Heavy Industries (DHI) is encouraging capital goods industry for technological development and funding approved projects if they are taken-up by recognised technical institute, to the extent of 80 per cent of its cost.

The export of textile machinery to the third world countries has increased. The Association is making efforts to help the textile engineering industry to increase its exports further. On the basis of the data furnished by the Directorate General of Commercial Intelligence & Statistics, Kolkata, the estimated export performance during 2014-15 was Rs 2,466 crore as against Rs 2,277 crore achieved during 2013-14.<

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