India is the world’s second-largest exporter of textiles and apparels, with a massive raw material and manufacturing base. The textile industry is a significant contributor to the economy, both in terms of its domestic share and exports. It contributes about seven per cent to industry output, two per cent to the GDP and 15 per cent to the country’s total exports earnings. The sector is one of the largest sources of job creation in the country, employing about 45 mn people directly.
The Indian textile and apparel market was worth $ 90 bn in 2017. The market is further projected to reach $198 bn by 2023, at a CAGR of around 14 per cent during 2018-2023. India is the second largest textile exporter in the world. India’s share in global trade of textiles and apparels is approximately 6 per cent. Today, the textile and apparel market has become a vital contributor to the Indian economy. The apparel export has seen a positive trend from November 2018 onwards.
Between April-December 2018, Ready-made garments (RMG) exports from India stood at $11,350.44 mn. India is the largest cotton producer in the world (35.1 mn bales of 170 kg each). The data on ‘Quick estimates of textiles & clothing for the month of December 2018’ recently released by DGCIS has shown that export of cotton textiles (yarn, fabrics, made-ups) under the purview of council have increased to $8,394 mn during April- December 2018 from a level of $7,531 mn during April-December 2017 recording a growth of 11 per cent.
If taken together, total textile and apparel exports from India increased by seven per cent to Rs. 1600.10 bn in April to November 2018, compared to exports of Rs. 1492.54 bn in the corresponding period of last fiscal. In dollar terms, however, exports remained flat at $23.18 bn during the same period. India’s textile and garment exports growth moderated in November 2018, after a sharp 38 per cent jump in October, due to a sharp volatility in the rupee-dollar exchange rate. The total exports of textiles and apparel are expected to touch $82 bn by 2021 with CAGR of 12.06 per cent.
Recent Government Initiatives
To promote exports of readymade garments and made-ups, Government of India increased Merchandise Export from India Scheme (MEIS) rates from 4 to 6 per cent under the Mid-Term Review of Foreign Policy 2015-20. The government is also making investments under the Scheme for Integrated Textile Parks and the Technology Upgradation Fund Scheme for training workforce and to encourage private investment in the Indian textile and apparel industry.
In order to follow the goal of making India’s development inclusive, the Central Government is focusing on a number of policies in providing best manufacturing and infrastructure to local artisans, technology and innovation, enhancing skills and strengths of the local industry. The government has been implementing various policy initiatives and programmes for development of textiles and handicrafts, particularly for technology, infrastructure creation, skill development, including:
Amended Technology Upgradation Funds Scheme (ATUFS)
- PowerTex India Scheme
- Scheme for Integrated Textile Parks
- SAMARTH- scheme for capacity building in Textile Sector
- Silk Samagra- integrated silk development scheme
- North Eastern Region Textile Promotion Scheme (NERTPS)
- National Handicraft Development Programme (NHDP)
- Comprehensive Handicrafts Cluster Development Scheme (CHCDS).
The Textile Ministry of India announced Rs. 690 cr ($106.58 mn) for setting up 21 ready-made garment manufacturing units in seven States for development and modernisation of Indian textile sector.
The Government also launched a special package to boost investment, employment, and exports in the garments and made-up sector. The special package was designed to create upto one cr jobs, and boost exports by $31 bn and attract investment of Rs. 80,000 cr in 3 years. So far, it has generated additional exports of Rs. 5,728 cr and additional investments of Rs. 25,345 cr.
Government is now bearing 3.67 per cent of Employee Provident Fund (EPF) contribution for new workmen in addition to existing reimbursement of 8.33 per cent employer contribution under Pradhan Mantri Rojgar Protsahan Yojana for three years.
India represents the largest producer of jute and cotton, and the second largest producer of silk. Due to the high abundance of raw materials coupled by cheap labour costs, the cost of manufacturing textile and apparel is significantly lower than many other competing countries.
India currently has one of the world’s largest young population. Currently around half of the total population is below 25 years of age. This age group represents one of the biggest consumer group of textiles and apparel and is expected to drive the spending over the next five years.
Catalyzed by increasing penetration of the internet, online retailing has witnessed strong growth in the country. Consumers are now looking for ease of shopping, multiple options, better offers and easy return policies. The growth in online sales has enabled the textile industry to reach consumers residing across every corner of the nation.
Due to a change in buying habits, consumers are now shifting from needbased clothing to aspiration-based clothing. Contrary to previous years, where the Indian consumers purchased fashion items as and when required, buying clothes has become more than a basic need; it is now a reflection of aspiration, personality, and a status symbol. Though basic textiles continue to represent a part of the consumer’s basket, the demand for aspirational clothing has increased significantly in recent years. Given the timely policy support and intervention to boost exports, the industry is hoping to achieve the target of $12.65 bn set for exports of cotton textiles during FY 2018-19. With all this positive steps and recent trends, the future of Indian textile and clothing industry looks very positive.
In the next few pages we are covering comments of some of
the leading industry players about 2018-19 industry scenario.
With products such as yarn, fabrics and home textiles of cotton and blends under its purview, TEXPROCIL handles an export base of $12.6 bn (Approximately Rs. 90,000 cr) in cotton textiles constituting around 63 per cent of total textile exports of $20 bn (approximately Rs. 140,000 cr).
The data on ‘Quick estimates of textiles & clothing for the month of December 2018’ recently released by DGCIS has shown that export of cotton textiles (yarn, fabrics, made-ups) under the purview of council have increased to $8,394 mn during April-December 2018 from a level of $7,531 mn during April-December 2017 recording a growth of 11 per cent.
The positive trend in exports has been the result of council’s continuous interaction with the government and pragmatic approach shown by the Ministry of Finance, Ministry of Commerce & Industry and Ministry of Textiles, on the issues of T&C Industry. Given the timely policy support and intervention to boost exports, the industry is hoping to achieve the target of $12.65 bn set for exports of cotton textiles during FY 2018-19.
To be more competitive globally, the industry needs to take various steps. Interactions with a cross section of small / medium / large / producers / exporters / distributors of textile and clothing items suggests that there are a few areas, which would require government intervention / strategisation by the industry so that the present market size of textile and clothing estimated at $139 bn can be increased to $220 bn by 2025. The following five areas need to be addressed for making the Indian textile and clothing industry more competitive globally: Preferential access given to competitors by the European Union, Refund of embedded taxes, Increasing cost of compliances, Scaling up design content in the Indian fabrics & home textile products, Need to encourage / incentivize digital printing for value added made-ups.
Based on the current scenario, TEXPROCIL is confident that in the coming months, with government support, the industry would be in a much more comfortable position. While many of the concerns have been addressed, there still remain a few issues which the Council has been taking up at various fora. To highlight a few, these are, extension of ROSL Scheme to yarn and fabrics, extension of MEIS to cotton yarn and inclusion of cotton yarn in the interest equalisation scheme. One of the critical issues will be the formulation of WTO compatible alternative schemes to replace the present ones like the MEIS, EPCG, EOU’s/ EPZ schemes.
TEXPROCIL has already submitted a set of proposals to the government on the WTO compatible schemes and hopes that it will be examined expeditiously and implemented on an urgent basis. While we await the formulation of alternative schemes, we are nevertheless pursuing proposals under the existing schemes (as part of our unfinished agenda) with a view to gain a level playing field with our competitors who benefit from preferential access and hidden subsidies.
It is in this context, the council has proposed the inclusion of cotton yarn under the existing MEIS. Even though the MEIS is likely to be phased out in a short while, we feel that cotton yarn as a value added product deserves to be included even during this short period, as a lot of value addition is taking place within the country. Further it is the only product that has been deprived of export incentives as the yarns made from man-made fibre get the benefit of MEIS.
Secondly, in the case of fabrics there is a need to increase the MEIS rates from 2 per cent to 4 per cent. The recent drawback rates for fabrics have also been increased marginally and there is a need to support the weaving sector with a higher level of incentives so that India can truly become a hub for fabric production in South Asia.
Thirdly, the ROSL scheme needs to be extended to the entire textile value chain i.e. including yarns & fabrics as these products also face the incidence of State levies especially like electricity duty & excise duty on diesel & petrol which are used in transportation of raw materials by road. All these unrebated taxes have a cascading effect thereby affecting our manufacturing competitiveness. Apart from the policy support, there is an urgent need for expediting the conclusion of FTAs with countries like the EU, Australia, Canada, etc. We hope that the government will find a creative solution to the ongoing impasse on these matters. Industry is hopeful that government would take suggested measures to boost exports, thus leading to enhancement in the employment prospects and scaling up of production in T&C industry.
2018 was a year of uncertainty and volatility – be it the GST transition challenges or the currency volatility. The industry faced several challenges in meeting the GST compliance requirements and understanding the nuances of the system. However 2019 started on a positive note. In fact the industry finalised stabilized from Nov 2018, with slow but steady upward movement in export figures. I look forward to 2019 as year of consolidation and re-organising the industry. The GST has lent a certain financial discipline to the trade dynamics, which should translate into a more planned and organised industry and value chain evolving around us. However, what may lend some uncertainty is the external factors, like BREXIT and slowdown in the EU.
The two urgent needs for being competitive are scaling up and improving productivity. Towards being competitive, I think the industry has great opportunities in terms of various State apparel packages that are on offer. With significant support and new employment, plug and play options and subsidized colon facilities and compliance costs, the industry should look at expanding its capacities, especially in high re-value product manufacturing. Towards productivity enhancement, I urge the industry to focus on digitization and introduction of new technologies, as many of our competing countries are doing. Smarter systems for production planning, line management, material management and delivery systems can bring better returns to investment.
As the days for subsidies are ending, govt. has to – and is, working on new mechanisms for facilitating the industry. An important area is procedural simplifications. With 32 GST council decisions in a year – aimed at simplifying process, streamlining of the disbursement mechanisms, digitization of a lot of documentation requirements – the govt. is on the right track.
Council had done a detailed study on the new schemes that can incentive’s scaling up production, improving compliance and bringing more women into the workforce. These have already been shared with the government, and we look forward to work on a project mode for achieving the $300 bn exports targeted.
2018 was a forgettable year for both the export as well as the domestic sectors. Exports continued to lag behind, showing a continuous de-growth for most of the year. It will probably end up at about –5 per cent for the calendar year. Domestic industry was not too remarkable, as some semblance of stability returned post the demonetization and GST impact. However, in spite of the economic growth, discretionary spending on clothing continued to be sluggish, and combined with the indiscriminate discounting by ecommerce companies, many brands saw a flat performance over the previous year. Margins continued to be under pressure. I see 2019 to be much better year, with consumer sentiments on the rise. Tier 2 & 3 will continue their growth, and with the recently announced curbs on ecommerce pricing, I am hopeful of the bottom lines improving. Exports too should be finally turning the corner, assisted by the measures being introduced by the government.
Industry needs to increase its product basket and markets. It cannot keep doing the same thing year-after-year and expect continuous growth. Productivity is another aspect that will need to be focused on. India’s noncompetitiveness is not from high wages alone – it is also from low productivity of its factories. Unless this is improved, we can forget being globally competitive.
Although I am not a great fan of seeking government support, it will have to review its approach to export of taxes, support to the industry from cheap imports, tweaking its policies on product specific support policies, and a hard review of the pluses and minuses of fats that invariably are an impetus to some industries and a deterrent to others.
In the year 2018, the apparel industry had gone through macroeconomical changes happened in our country and also increased competition from our neighbouring countries including Vietnam and China apart from new emerging countries like Myanmar and Ethiopia in the global market. Due to this, there was no increase in the exports growth and more or less same value of exports clocked in 2017 maintained. As the apparel exporting units, particularly MSMEs are now familiar and gained up knowledge in filing GST return, we hope the units would concentrate and strive for increasing their exports in 2019. To enhance competitiveness, the industry has to implement the lean manufacturing techniques, impart training to the workers and has to necessarily take efforts to cut down the costs whenever possible to sustain in the business globally.
India’s apparel sector is less competitive compared to the countries like Bangladesh, Cambodia, Sri Lanka, Ethiopia, and Pakistan which are enjoying duty free status in the EU / the USA and to overcome this disadvantage, Government has to increase the duty drawback rate and ROSL till FTA take place with the EU and UK. Government has to provide incentive for employing more women workers and reduce the interest rate for the loan obtained from the banks. Government has to announce the textile policy and help for consumption of more synthetic fibres and manufacturing of garments out of it as there is a good market globally available for synthetic garments. More support has to be provided for research and development including technical textiles.
The year 2018 was all together good. Yet volatility in the market affected by the general economic condition caused some disappointment. We had great expectation from the Government during 2019. The interim budget has given some relief and concessions. More sector specific incentives to promote the sectors are expected in 2019.
These days, cost of input has gone up substantially affecting the profitability. Since this sector is operating at minimum level of profit, it is not possible to even marginally increase the price.
To make our industry more competitive globally, the incentive policies need to be consolidated and made more attractive. Government needs to be more proactive to control the fluctuation and stabilize the sector growth.
2018 had been a dull year wherein I believe most of the factories were striving hard for survival. Though there was some solace in terms of USD appreciation. But due to the forward contracts already booked, not all could take the advantage. Reduction in drawback vis-a-vis 2017 was a setback.
We are keeping our fingers crossed for 2019 and hope the rally in USD continues for the benefit of export trade. Increase in efficiency, better purchase prices and keeping the buyers in good books can result in regular business. The government needs to play an active role to keep the industry afloat. Better duty drawback, lower interest rates, faster GST refund, labour laws conducive to the industry, productivity linked wages etc.
2018 was pretty difficult year from fabric business point of view. We had to face couple of challenges. The Indian garment export has declined by almost 15 per cent this year as compared to last year. The reason is unfavourable exchange rate resulting into lower order booking. The domestic market is taking time adjusting to GST regime. Therefore the demand has been sub dude from both the market segments. The strong raw material prices made the situation more difficult. 2019 seems to be better on both the fronts, as the exchange rate and raw material prices both seem to be settling at a reasonable level. The normal demand cycle should pick up soon.
To be more competitive globally we need to strengthen the complete value chain. The weaving by itself cannot add strength unless the overall exports from India pick up. With the shortening lead times, no buyer wants to export the fabric from one country to another. That’s why the countries like Bangladesh and Vietnam are expanding on the textiles side. For India to gain a global position in fabric, the garment export from India has to grow. We are still lacking in terms of logistics infrastructure. Still our transportation lead times are very high. The time taken for exports at exit points at Indian borders need to be shortened.
The global textile industry impacts nearly every human being on the planet. The industry is currently worth nearly $3 trillion and includes the production, refinement, and sale of both synthetic and natural fibres used in thousands of industries. The textile industry encompasses a broad and diverse range of products with an even wider range of applications.
In 2018, the Indian apparel industry was affected due to the introduction of GST (Goods and Services Tax). During the phase, exporters were majorly affected as they tend to book more orders per year, whereas after GST implementation they landed booking only 70-75 per cent throughout the year. In 2019 exporters were looking at becoming more competitive to book more orders, as government has made a major contribution in the Indian economy by reducing the GST for fabric yarns from 18 per cent to 5 -12 per cent now.
To boost the growth of this industry as an exporter we would like to suggest that our industry should get more duty drawbacks from the government. Earlier, it was 7-8 per cent but now it is only 2-5 per cent. Hence it should be increased to make us more competitive globally.
Year 2018 has been challenging for us as well as the industry on many fronts. Handling the impact of GST, lost revenues due to cut down in incentives, increased costs of fuel and transportation, fierce price competition from low cost countries.
To be able to have a significant position in the global apparel market, a multi-prong approach will be needed for the industry. Manufacturers and exporters must create a competitive edge which many countries have already done. India is not a favourite buying destination for a huge number of apparel buyers. The reasons are multiple:India is not known as a manufacturer/supplier of various apparel categories like synthetic athletic and active wear, washed denim apparel, hand-flat knitted sweaters, technical outerwear etc. Skill and capability developments are the need of the hour, to be able to grow the global market share; Focus on quality and delivery timelines needs attention; High manufacturing lead times.
A large business has already moved towards the countries and companies that offer a shorter lead time to the customers. This not only improves the sales of brands & retailers but also reduces the hold time of finances. Reasons are simple, closer to season/market – better the chances of buying/selling the right product; Sailing times and freights are higher for many countries which gets coupled with higher manufacturing lead times. A joint dialogue between shipping lines/ airlines, exporters, councils and the government may help to improve this situation; There’s a significant worker shortage in the apparel sector. Government is running several programs to train and employ new workforce. But, at the same time, it would be good to think of some level of automation in the sector, to minimize the impact.
Governments can do a lot to support and grow the apparel sector that earns a significant forex for the country: It’s necessary to better incentivize the apparel exports from India amidst growing global pressure on prices; Create a watchdog to monitor, control and strengthen operations at all ports, especially during the peak seasons. Often it becomes tough to meet the target deadlines due to congestions and spikes at the ports. Freight rates also need to be more competitive. There’s a need to push more FTAs with various countries. India is in a disadvantageous position for exports to many countries especially the EU where the neighbouring Bangladesh, Pakistan and Sri Lanka get duty-free access.
In 2018, fabric & apparel industry had to face multiple challenges. That is, in terms of weak demand, high raw material cost, over supply & compliance issues. It is our estimate at least for next three quarters situation would continue to remain disturbed.
Automation & optimum efficiency are the keys to remain competitive in the global markets. In addition to this, constant innovation with deep commitments towards the environmental issues will remain the main criteria for the global business. In order to grow exports, it will be beneficial if government can have trade agreements (Like FTA & MFN) with USA & European countries.
In 2018 Indian apparel industry was stable on global market front. I think it will be much more stable in 2019. To be more completive globally, the Indian textile industry should work more on skill enhancement and automation.
As far as our expectations from the govt. for further growth of this industry are concerned, I think the government at both Centre and State should make easy convenient global exporter policy.
First half of 2018 passed in GST stabilization where all the nuances with regards to costing post GST, procedures, and compliances got fully understood and embedded into business. Second half of the year was dominated by volatile forex market, which didn’t allow exporter and importer to set in. But at the fag end of the year around October, domestic market started showing good demand which continued in even early part of 2019. At the same time, export market is also showing sign of improved demand. So year 2018 was not so great as far as growth is concerned but has set in a good platform for year 2019. We expect 2019 to be a good year for growth in textile industry.
Focused approach towards quality and value addition in product is must for creating competitive advantage. We cannot be as competitive as Bangladesh or Vietnam in terms of labour and other costs but we can certainly move up in quality of product so that customer is forced to come and procure from India.
As textile Industry is second largest employment providing industry but our industry is facing challenges to get skilled workforce. Government should put up centers along with industry to meet demand for skilled workforce where we can meet cost & delivery with international demand. Government should provide incentives to the companies who are adopting best global practices of the industry in order to improve quality of the products as well as delivery mechanism. India can only sustain in global competition if it can keep improving quality of the product and timely delivery.
For our company 2018 was same as 2017, nothing improved much in terms of sales. Moreover, margins are going down further. Everybody is down on the profits because people’sfaith has not come back. People are not ready to invest, it’s not that banks are not lending money but actually they don’t want to expand capacities in present scenario. Apparel exports have dropped for third consequent year. It’s not that apparel exporters don’t have orders; they can attract a lot of investment in India provided right kind of atmosphere is provided by the govt. The garment industry requires manpower, which we have, that too young workforce but we are not unable to utilise the same due to unfavourable labour laws for the factory owners.
The industry is slow after GST as refunds are very slow, though people are getting but in some cases it is taking lot of time. Banking norms for granting loans have become stringent, which is the reason why exporters are not expanding much. Today, India needs to have very strong financial planning and balance, which is where we are lacking. Until unless people get their faith back, nothing will improve.
In present scenario we need to invest in automatic machines to increase our productivity and reduce cost of product. Keeping this in mind we have now introduced many automatic machines and labour saving devices. We believe future is going to be good, as slowdown is a temporary phenomenon and at the end industry will improve.
2018 was better for the industry as it slowly recovered from the demonetisation and GST impact. Apparel exports finally became positive in the 2nd half of the season and IIP also was positive for apparels. However, due to liquidity constraints, the apparels companies were constrained in their growth. 2019 is expected to be better and hopefully the government will rectify the remaining issues of GST for the industry and also increase drawback and ROSL rates for exports to compensate for the tax incidence on the industry.
Industry faces a non-level playing field in many markets due to tariff barriers, however industry needs to improve its productivity levels, economies of scale and organise itself better for large production at competitive prices.
Apart from the issues mentioned above, we hope A TUF can be streamlined by the govt. so that subsidies are received by the industry in a time bound fashion and the old pending claims are settled to ease the working capital constraints of the industry especially the MSME players.
It was year of opportunity!! Till July / August was not good period due to many uncertainties, but 2nd half of 2018 was excellent in terms of demand. Fabrics demand was excellent, so the yarn sale was good. The coming year seems to be excellent due to good demand in domestics as well as in export segment. Rise in income level is expected to drive demand in textile industry.
To be more completive globally, industry should focus more on new product. Value addition will help to grow export segment. As far as expectations from govt. are concerned, I think already govt. is doing their level best, however to be more comparable with other counties, export schemes & other benefits to the manufacturer of yarn / fabrics has to be made. GST returns has to process fast. They should arrange more meeting/seminar at small levels with end users to understand their difficulties.
The year 2018 was not a good year either for exports, and the outlook for the current year does not appear to be any better. The problem is not only demand, it was the impact on both demand and profitability. We did see a reduction in demand for domestic brands as well.
Profitability is impacted on account of GST, especially for exports. The reduction of duty drawback rates and 5 per cent GST on fabrics, have impacted business in terms of profitability as well as working capital requirements. Whereas if the customer supplied the fabric, the duty payments were zero, but now we have to pay 5 per cent IGST, which is a huge strain on working capital. This needs to be addressed urgently especially for exports.
Also, if a company is doing both domestic and exports, we do not get the full refund of Input GST (in the case of exports) because the claim is restricted on a prorate basis for the month. All these need to be addressed for this industry to be profitable and sustainable.
2018 was not a good year for apparel industry, and we hope 2019 will be better for us. Industry is doing everything possible to compete globally but our competing nations have advantage of duty free status where buyers are saving 11 per cent.
Government has not considered our data for drawback and it’s a big disappointment. We have submitted a data for ROSL for 5.83 per cent and we request government should consider sympathetically. For long term, we need government should try and finish the deal of FTA with Europe, CEPA with Canada and Australia. Once government consider this request our exports of garments will be doubled in three years.
We feel it’s a good year for us like previous years in spite of various issues like GST, Competition from other countries, labour shortage etc., we work with various strategies to keep us updated in terms of new fibres, sustainability, technical aspects, Compliance standards etc., so we able to maintain and pushup our business each year. We are very positive in 2019 also our works will speak for us and able to achieve atleast 5 per cent growth compared to previous years. Sri Kalyan Export is proud to be certified with GOTS, Oeko-Tex, Fair Trade, BCI, SA 8000, OCS for Woven Fabrics Manufacturing and Exports in Prints , Dyed and yarn dyed and using Sustainable Fibres like Organic Cotton, Lyocell, Linen, Flax, Hemp, recycle Cotton etc., which benefits our customers and also environment majorly.
We think our textile industry should work towards quality, sustainability, technical standards, being environmental friendly instead of working towards cheap price products. Our quality and standards should speak for our products and pricing. Profitability is a must for maintaining sustainability, environmental benefits and labours welfare without that making turnovers never solve the purpose.
We are expecting our Govt. should support in a better way consulting our textile experts who are directly involved in manufacturing and exports as they know exactly what are the issues faced practically and what shall be done to solve it. Without consulting those making policies will not be so useful. And also FTA with Europe is long standing request from Textile Industry which will benefit and revolutionize textile industry. And also keep track on raw material pricing mainly cotton is a must for saving small and medium textile units who affected a lot during order season, as big mills who having own spinning mills not affected by Cotton pricing who procure and keep stocks.
The year 2019 will be better than 2018 for sure. After the elections the market will improve. There are many proposals already in pipeline and many Pradhanmantri Yojnaye that are there for the new start-ups will move ahead. We are already working on it, with many new entrants who wish to get into Laundromat segment (commercial laundry) or wish to open a dry cleaning segment.
In apparel export segment, new projects are majorly happening towards Ranchi and Jharkhand side. But not many new garment factories are coming up. But at at the same time the existing player, who wishes to cut down their costs are going for new technologies and replacing old machines. In Noida, there are so many existing garment exporters wish to change their existing system from diesel to PNG. Customer is willing to change the technology to increase the productivity and reduce the cost of operation. They are expanding, not in terms of sewing system but upgrading their existing dyeing setups. We have done a lot of such projects (around 30) of exporters upgrading their new plants in last one year in Delhi NCR.
Right now there is a boom time for hospitality, commercial Laundromats, dry cleaning chains and hospitality segment unlike garments exports. The exporters are steadily watching everything. They are ready to invest but there is downtrend in exports side.Our percentage of sales among garment exporters has gone down, which used to be very high earlier. Right now it is not more than 25-30 per cent of our total turnover.
When it comes to demand from the govt., there are few things which need to be highlighted. Majorly for the garment industry, specifically for garment dying industry they should take initiativese.g.establishing common more ETPs like what they have done in Surat and Tirupur. This is where some parts of Haryana, UP and Delhi are lacking, where the industry is scattered. Yes, you need to build up a common space for them and provide infrastucture. This is a very important for the garment industry.
If you see Bangladesh, they are growing rapidly in terms of capacities, value additions and garment dyeing which is not happening in India. No major support is given to this industry. There are few places where they have established common ETPs, which don’t work. The support has to be from the govt. side also as this industry provides maximum employment after agriculture.
If we look at the performance trend of 2018, we can say that the apparel industry has faced certain challenges, resulting in an inexplicable slowdown which has mostly impacted new investments. Yes, we are in the business of technology & automation in the garment arena, and we see a huge gap in the industry we operate in e.g. there are lot of existing setups which need upgradation immediately not just to survive, but also to be market relevant.
We have witnessed that recently there has been a dip in the investments in the garment sector, owing to which many companies have abstained from expansion. However to build more efficiencies they have upgraded their set-up by opting for automation – thus, automation is the need of the hour. And since we have a conspicuous presence in this field, we didn’t get affected and have been growing as per our set targets. Consequently, our growth in 2018 has been in double digit.
It’s a proven fact that the industry competitiveness demands bulk production and bulk customization, and hence to meet the said demand the industry has to adopt technology for a sustainable growth and existence.
We have seen a drift in the foreign trade flow whereby import has been high and export has gone down. However, the domestic consumption is growing which has put the overall market on a growth trajectory. As far as our expectation from the government is concerned, it will have to continue playing a critical role by passing relevant policies backed by effective and successful implementation, which in turn can give a boost to this promising industry. GST implementation has been a challenge, and we are of the opinion that to bring about an air of ease, the refund system has to be further smoothened.
Bruce is member of Jack Holding Group companies. We started our business here in 2018 January; it’s a new brand in the Indian market and doing very well. Now channel network is developing and product awareness is also under process. The Quality of product speak itself, which is the reason we are getting a lot of orders from the Indian market.In 2019 we have taken almost double the target of 2018,and think we can easily achieve this.
Jack Holding started Bruce Brand 10 years back to supply to the European market, which is the reason of it being a high quality product. Today, we are more focused to supply these products to the end-users like garment exporters and manufacturers compared to the dealer network.
Quality wise it is better than other brands and our market is a little top end. Bruce has wide range of machines and in the coming years the brand is going to have all high end machines. Business wise, we did well in 2018 and planning to double our sales in India. The future looks bright for us.
Nowadays, reducing the production time is very important for a garment manufacturer. So, they should go for automation to increase their productivity and to compete globally in terms of pricing. In next two years everybody will be having machine with auto trimmers. Besides, Direct Drive has already become compulsory to save power; hence we have converted our all machines into direct drive.
When it comes to market, after GST implementation it has become easier for us to do the business. Import duty is almost same so there’s not much change in cost of machine. My channel partners are very comfortable with the billing now and we have seamless transportation of machines all over India.
Meanwhile, due to rising cost in China, India has a good chance to grow in global apparel export market. Indian apparel exporters have lots of potential but for this govt. have to support. People representing garment export industry should have only one big association and go strong in presenting their demands to the govt.
2018 was an excellent year for us. We expect to close the FY with 100 per cent growth in Textile Division. Elaborate designs and colour schemes which are not possible to print on conventional printing machines, this is where we come in with our digital inkjet printers. 2019 looks promising because are not just expanding in domestic markets but we also going to International Markets by participating in ITMA- BARCELONA, DTG-BANGLADESH, and other various shows.
To bring down the cost of Garment Manufacturers, they have to start backward integration where they start doing the printing in-house because digital printing is so easy with a pigment inks technology. They do not need to pre coat or post process due to which the entire process becomes water less and simple for anyone, simply put a machine and start printing in-house.
Govt. should give more subsidies on capital equipment for textile setup and up gradation. We should have more funds for people getting in manufacturing of textiles. Also, government should push more make in India machines for digital textile printing because lot of Europeans are coming in India and grabbing the markets. Even, Colorjet is the market leader today but with the higher import duties we will get more benefits.
Traditional Rotary and Screen Printing consumes huge amount of water which is really not right for the future because we have a limited resources. So, by putting a ban on water usage, digital textile printing industry will automatically get a boost, this is what Colorjet expects from the govt. for further growth of digital textile printing industry.
The year 2018 was very good for our Loiko’s business, and we are very happy to announce that we completed our target in advance. For apparel industry the year 2018 was OK. Our garment manufacturer should invest more into automation; otherwise it’s very difficult to run the industry in-future because of labour problem. Automation deskills the operation, improve the productivity and quality. Since last few years most of the big garment manufacturers are investing in automation and have got good ROI. We at Loiko look forward to more garment manufacturers going for automation in 2019.
As we all know after agriculture sector our garment industry is given largest employment, but only few States in India supporting garment manufacturing by giving subsidy for power and labour. We expect our Central Government to support garment manufacturers and exporters to grow their business and also create more employment.
In 2018, the business was quite good as we are set to increase the sales by over 20 per cent this year. 2019 will be a turnaround phase as we are expecting to have exponential growth due to the launch of Mega products like Hydrocarbon Dryclean machine – a first of its kind in India being produced at our factory and Specialised machines related to digital printing.
We are also catering to hotels, hospitals and commercial laundries also we are definitely going to increase our turnover this year. Also, we are starting a new vertical manufacturing unit to cater the commercial laundry with exclusive products. To become more competitive locally as well as globally, it’s high time for garment manufacturers and exporters to invest in high quality technologies to increase their efficiency, and get consistent output.
Now, the industry has settled down after the implementation of GST. So, we as a manufacturer have really benefitted from the same and it has become easier for us to transport goods all over India. As far as expectations from the govt. in regards to the growth of this industry is concerned, I think, this is a critical matter and lot depends if the Central govt. remains in power after upcoming elections as this will result in stability and accordingly the present policies can be carried forward.