Already reeling under the impact of the steep increase in the import duty on cotton (11 percent) the textile and clothing industry is confronted with a very serious problem – importing man-made fibres and yarns made almost impossible with stringent quality control orders (QCOs). Not only that, a certificate from the Bureau of Indian Standards (BIS) has also been made “mandatory’. Worse even after complying with QCOs, such a certificate is not easily forthcoming.
The delay in the import of required quantity of fibres would force the domestic manufacturers of value added products to “compromise” on the quality and lose the business in the long run. Many applications from foreign companies for making available supplies of fibres etc., after receiving orders from Indian textile units are pending inspection and approval by the BIS and this could be cleared only after BIS officials visit the production facilities of such applicants in their respective countries.
The situation in the industry has come to such a pass even the Tamil Nadu Chief Minister MK Stalin has shot off a letter to the Union Commerce Minister Piyush Goyal, seeking his immediate intervention to set right matters. The letter says “though implementation of QCOs is highly commendable as it will improve the quality and protect the environment the industry’s interest must also be protected by providing sufficient time to implement QCOs. The mandatory establishment of testing infrastructure to obtain BIS certification, which is “cost – intensive” is not “viable” for micro, small and medium enterprises (MSMEs) the letter said.
Some of the fibres for which QCOs still continue or are extended include viscose staple fibre, originally granted for a month for its implementation was later extended upto March 24, polyester staple fibre QCO was fully withdrawn from April 3. QCO on polyester fully drawn grey and white yarn and 100 percent spun yarn will come into effect from July 3.
The CM said, “Fashion cycles are planned over six months in advance and orders to source the raw material are placed accordingly. Therefore implementation of deadlines may hamper several on-going processes”. The letter has sought exemption from QCOs for filament yarn and artificial fibres, including bamboo fibres not manufactured in India.
According to Raja Shanmugam, President of Tirupur Exporters Association (TEA), the QCOs have severely impacted the units in the area. So much so, the units have been forced to approach the two big players in the man-made fibre segment for supplies – and at a higher price. For the trend in the global market is for T-shirts with exclusively viscose, polyester or their blends, thus moving away from the manufacture and exports of cotton-based T-Shirts in the past 2 years, “We are trying new proportions he said, adding the move stems from the high cotton prices. Orders are picking up, he further stated.
Textile industry leaders have strongly criticized the Central Government’s move to insist an QCOs and BIS certification for import of man-made fibres and termed it a “non tariff barrier” severally impacting the entire value chain- from fibre, yarn, fabric, garments and to bed sheets.
The gradual switch over to viscose or polyester blends also assumes great importance, looking at the vast scope for increasing consumption of MMFs in the country since the share of MMF products in the total textile production is considerably lower than that of world average. In fact, the share of MMF products in exports is even lower than that of total textiles production.
Our current reputation in the global market is basically only as an efficient supplier of fibre, yarn and filament fabrics. Our presence in the final products of garments and made-ups is limited and extra efforts are needed to market them. Obviously, the government’s export incentives and facilities for these segments should be more liberal for MMF-based products.
The crux of the problem is re-casting the duty structure on MMFs to promote the use of MMFs, reducing dependence on cotton, a natural fibre. It will greatly help increase production and consumption and increase India’s share in global exports of garments and made-ups, based on MMFs.
There is no difference in technology or skills required for cotton and MMF products. The difference is in cost competitiveness of fibres. Fibre neutral policies promised by the government are yet to be implemented. It would remedy the situation, albeit partly. Increased profit for MMF products would retard textile production. The balance between the two should be properly assessed, before duties are imposed on MMFs, instead of seeking imports which will only destroy domestic production.
India’s hopes of falling in line with the prevailing practice, worldwide, in the usage of cotton vis-a-vis synthetic fibres will be belied. The ratio is 57 percent cotton and 43 percent artificial fibres in India against 60 percent MMFs and 40 percent cotton worldwide.
