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Cover Story | October 2017

Golden Era?

Not long back when the textile market shifted from Europe to Asian countries, India having a vast knowledge and experience in the textile sector was expected to flourish as the global textile leader, but due to internal factors it remained an unachieved dream, avers Avinash Mayekar.

The year 2020 when India will emerge as a Super power, it’s an year eyed and spoken about by one and all. So what will the golden industry of India-textile industry be like in this super year? Will it be the most powerful textile dominant country or will it be the same as today?

Time will definitely speak for itself, but as on date, 2020 is definitely going to be the most challenging year for Indian textile industry, as a lot many things are expected. The Government has forecasted that the industry will have trade margins double that of its current value. But such trade increase needs time, calculated investments and risks, the super year will not rise up all of a sudden; it is the fruitful outcome of efforts and dedicated work done for years long. So looking back since 2012, India textile industry has been on the radar of international market. The entire world was hoping that India will do something or the other by which it would be acknowledged. However somehow we have simply missed the bus or we are too late to grab the opportunity and as of now, we are running out of time for new investments that will help us emerge as super textile giants.

Not long back when the textile market shifted from Europe to Asian countries, India having the vast knowledge, experience in the said sector was expected to flourish as global textile leaders, but due to internal factors it remained an unachieved dream. However even when the industry came back strong against all obstacles, the Indian textile giants are just waiting and watching the opportunities instead of launching action plans against it. Our Indian mindset is recently lacking the eye for innovation and over the years we have just become followers. We are not taking any initiative to grab the tremendous opportunities that exist. On the other hand, our neighbouring country China has slowly but steadily penetrated into textile market and increased its share to become world leader, having a majority of market share leaving us at distant number two position.

The journey of Indian textile industry is not something new, it’s very much an open bible which one has either heard or witnessed over the years. We all know that India is a gifted land having all the essential resources and raw materials. We are the second largest textile fibre producer and also the largest cotton and jute producer in the world. Our fibre production was nine million tonnes in 2015-16. We are having second largest textile manufacturing capacity globally. We account for 18 per cent of world’s spindles and 9 per cent of world’s rotor and have 5.8 per cent share in global textiles and apparel trade. Also apart from statistics, we are also gifted with human intelligence having highly skilled labour, skilled professionals, capable marketing heads and also we are well versed with the global language – English, eliminating the major communication barrier while competing on global platforms. Apart from the above, Indian workforce also has the advantage of multitasking and great designing techniques. Despite having such great skill sets and valuable resources, we have lost a major share to China that today have gained everything and are retaining their number one position since years.

The major reason for our setback is the lack of effort to think, strategise and study before moving ahead with the flow. There is no such study done that can provide a roadmap that will help us proceed further, analyse how our cost of production can be made equivalent to selling price of Chinese products, and there are many ways by which we need to understand the country aspirations and inspire ourselves to gain the considerable market position. From aspirations point of view, the Government has come out with a dedicated declaration that they want to double the textile trade of India, however just an announcement will not be effective on the long run, we need to create supportive infrastructure and financial support needed for achieving these goals. The Government has launched many schemes like mega textile parks, infrastructure supportive policies like cluster developments and many new initiatives are being planned for boosting the textile sector. So from aspirations point of view, many things are geared up but I feel aspiration for increasing our business by 100 per cent is just not enough on global platform, as right now if we see the Indian textile trade is 5.8 per cent of global textile trade, so even on doubling the value it will still not be significant. Moreover, if we take assumption that China’s share in global market is going to decrease as they are rerouting towards more profitable and easy cash flow products then too our share will not be increased by multifold unless and until a full-proof strategy is adopted and executed at full swing.

All said, only aspirations are never enough, we need to work towards these aspirations. Hard and smart work towards these aspirations is needed to increase our market trade by multi-folds. China is having biggest market share of 32.8 per cent let us assume with recent changes if China’s share comes down by 10 per cent in terms of volume in coming 10 years its global share will still bemuch higher than that compared to Indian trade.

In order to capture such huge market trade, we need to focus on our strengths, i.e., cotton and so produce cotton based conventional as well as technical textile products. We should thus grow cotton our most promising strength in large acres of land and at the same time focus on its quality and extraction process which is one of our biggest challenge. Emphasis must be given on cotton cultivation and extraction process in order to produce fine quality finished product. And most important our focus must be on exporting value added end products. Also as we have excellent fibre specifications, we must try to capture the neighbouring markets and increase our penetration in fibre segment. All though there are many changes happening but still we need to be more progressive and innovative. Our focus must be on developing expertise in entire textile value chain in order to achieve the dream target of 2020.

When we speak of reality, the truth is that we are far away from converting our aspirations into reality. The truth be spoken we have yet not understood that there is a need to be proactive, understand markets and develop our own plans. For a developing country like India, that is currently competing in almost each and every sector, there is hardly any in-depth study carried out in past 20 years to understand which are the fibers that must be produced, which are the ideal locations for setting up units, On which growth sector do we need to concentrate, what competitive advantage do we have in global economy from textile prospective, how we can take advantage of China’s slowdown, which are the fibers that needs to be developed, which are the products that needs to be focused on, which are the markets that must be captured and many more. Such studies to my knowledge have not taken place, nor published by the government and so as on date there are very few innovative inputs from the Government’s side that will help new entrepreneurs to kick start their textile projects. Such inputs are very much a necessity for an India eying to rule the textile world.

Most of our existing textile entrepreneurs naturally are only focused on their own business and aim on increasing their profitability and sustain in the market. Their long term visions and missions are somewhere missing, very few entrepreneur have shown their guts and are having capabilities to compete in the international markets and so are performing extremely well whereas others are struggling within their boundary limits. This is the reality that needs to be changed and a leap of faith is the necessity for a 2020 Indian Textile Dominated World.

I am sure India has a lot of potential, we are having rich culture for so many years and we have been world leaders in textile. Now with the changing scenario we need to do something which is different. We all know that globally Africa is a destination for all textile products even make in India products have their reach there but we are yet not having a commanding position to sell our high quality products at a self-desired price in these international markets. We have yet not understood what is it that customer really thrives, is it the product quality, product price, product feel. A perfect blend of above is what needs to be focused on. If we speak about conventional textiles, perfect engineering needs to appointed, in case of technical textiles we need to outperform and have in-house capacity to incorporate the latest developments. We must also eliminate our dependencies on the trading communities from other countries like Honkong, Dubai, Europe etc., and start direct marketing by developing own marketing wings and embark our presence by informing that we are capable of delivering on time as well as providing after sale services.

They say it’s never late. So with this positive thought in mind textile entrepreneurs should gear up and come out with business plans that are best suited to their capabilities and focus on creating global footprints. There must be analysis on the investment range, product selection must be given utmost importance and this must be done in such a way that it helps him stand out in the crowd, his business USP must help him take bigger pie in the global market.

So first and foremost, an action plan is needed based on what is our ultimate goal, where are we aspiring to reach. Accordingly a roadmap should be carved containing answers for the type of products that must be manufactured in India, on what necessary infrastructure is needed, what should be our five year plan, 10 years plan. So for this we must study all the fiber segments, yarns segments and the fabric segments which will help us understand how we can progress in each and every product depending upon the consolidated and focus strategy adopted.

Our vision should be much larger than our capacities. 2020 is a notional year, an alarm for all of us to wake up and start with new businesses and I am sure under the leadership of Prime Minister Modi things will happen quite well and we can achieve these milestones.

The article is authored by Avinash Mayekar, MD and CEO, Suvin Advisors Pvt Ltd

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