How is the raw materials scenario in the Country? This question has cropped up as we often hear complaints voiced by several sectors of the industry about shortage of key inputs or their prices. The textiles and clothing sector is no exception.
In the case of the textile sector, the question is very relevant. A huge demand supply gap is anticipated. How to bridge this gap as supply of raw materials needs to be substantially stepped up to meet the $100 billion export target for the sector set by Union Commerce Minister Piyush Goyal. It is to be achieved by 2030. This means there are six more years for the industry to gear up to meet the target.
One major material is cotton fibre. Any increase in production is not possible in this period. So the focus is an man-made fibres (MMF). The current output is estimated at about 4.5 billion kgs a year. That needs to be increased by more than three times to reach a level of 14 billion kgs a year by 2030 – a stupendous task. The MMF sector however, claims it is producing around 5 billion kgs a year. By that time the business size of the industry is expected to rise from $ 165 billion to $ 350 billion and exports from $ 37 billion to $ 100 billion.
In the case of cotton, the contribution of technology mission on cotton is phenomenal. The cotton output was substantially up from 178 lakh bales in 1999 to 398 lakh bales in 2013-14. Also, the area under cotton rose sharply from 91 mn hectare in 128 mn hectare during the period TMC was in operation, accounting for 30 percent to 38 percent of the global average. After the closure of TMC, productivity dropped below 500 kg per hectare and annual cotton output fell below 340 lakh bales from 398 lakhs bales and may go below 300 lakh bales in the absence of any policy intervention by the government.
The cotton BT technology had expired in 2012. New technology is not available. It needs to be ensured that the minimum support price (MSP) operations are sufficient to safeguard farmers interests and it needs to be ensured that MSP operations do not result in unintended support to cotton traders at the cost of the industry.
The current National Textiles Policy has recognised the need to raise the share of MMFs vis-à-vis cotton fibres in total consumption closed to global trends. But the ratio between cotton and MMFs worsened from 58:42 to 68:32 in 2012-2013. The international ratio is 28:72. The policy has also advocated a multi fibre approach and review of the duty structure.
Confederation of Indian Textile Industry (CITI) says “given the huge and increasing demand in global markets and our marginal presence at present MMFs based textiles can drive up a phenominal growth of our textile industry, be it apparel, home textiles, yarn or technical textiles “By 2030, it is expected that polyster – the most dominant among MMFs will cover 60 percent share of the total fibre demand at the global level, whereas cotton will account for about one fourth share.
Why is the popularity of synthetic textiles rising worldwide? There are a number of reasons behind this trend: low cost, demand supply gap in cotton and versatility design and application. For instance, says Sanjay Arora, Business Director, Wazir Advisors Pvt. Ltd., “Global cotton supply is not increasing in line with the overall fibre demand growth. With increasing world population and consumer prosperity in developing countries, the fibre demand is continuously increasing. However the land under cotton cultivation is decreasing due to competing land use which is more attractive other cash crops, food crops, industrialisation and urbanisation”.
On the other hand, global share of polyester is projected to increase from the current level. Before 2000, cotton held a majority share in global fibre consumption. By 2030, it is expected that polyester consumption will be approximately three times that of the cotton fibre. Other synthetic fibres are gaining importance. These are recycled nylon, lyocell and viscose. The changes in consumer life style and attitude drive the trends in the end products. The trends identified are increasing focus on health and fitness, sustainable fashion, emergine of sportswear, performance wear and athleisure increasing cost competitiveness.
Moreover, polyester, the most adaptable fibre types has increasingly picked up by the bulk of new business growth. It is recyclable and can be blended with other fibres like cotton and spandex for performance requirements. Recycled polyester has achieved the pride of place as a green textile option tody, Arora says and adds that plastic bottles are recycled and transformed into fibres. The bottles are saved from going into landfills.
“Many global companies like H&M, Nike, the North Face are incorporating recycled polyester in their manufacturing process and attracting these customers who are environment conscious “notes Arora. Demand for polyester continues had led to market share gains and the current athleisure fashion trend has led to very strong opportunities for growth.
Global demand for polyester is expected to grow from four million tonnes to 6.7 million tonnes by 2025. Global and Indian trade data analysis shows that India needs to increase its market share in synthetic, fabric and apparel trade. Main focus needs to be given on manufacture of top traded and the fastest growing fabrics and garment categories. India has no pressure of major players in this category and majority of high quality fabric is imported by India from China, Korea and Taiwan.
Processes involved in synthetic textiles manufacturing should be as simulated by Indian Players. The problem facing Indian Companies is the lack of scale, low man power efficiency and lesser focus on research and innovation activities. There are challenges faced during processing as well.
The largely cotton based textiles industry should improve its positioning in synthetic textiles trade globally. India’s MMF production has remained stagnant in the last few years. MMF exports also declined slightly, while imports saw double digit growth. Opportunities in this sector however are huge. Our current reputation in global market is basically only as on efficient supplier of fibre, yarn and filament fabric. Our presence in the final products is limited. Therefore the government’s export incentives and facilities should be more liberal for the MMF based products.
From the governments side, it has to frame the right blend of policies for exports as well as for domestic consumption, foster better coordination between government and industry, promote Indian man-made textile sector in global markets, introduce neutral –fabric policies and give a thrust to R and D and educational institutions to assume responsibly in developing the industry.