Imagine a situation where a single authority – Textiles committee – under the Union Textile Ministry is made the notifying, certifying and enforcing body for issuing quality control orders (QCO) for import of certain categories of Man–made fibres (MMFs) in the manufacturing process of the domestic industry. If that happens, it will be a big relief for highly stressed spinning industry as the Bureau of Indian Standards Certification (BIS) may be exempted, enabling Quick MMF imports.
Why TC? The experience of the industry in the past few months shows that it has been taking an enormous time to issue the QCOs. What is more, even after obtaining the QCOs, BIS certification is not easily forthcoming. The delay had forced domestic manufacturers of value–added products to “compromise” on the quality and lose business in the long run. The situation came to such a pass that even the TamilNadu Chief Minister M.K.Stalin had shot off a letter to the Union Commerce Minister Piyush Goyal, seeking has immediate intervention to set right matters. The letter had sought exemption from QCOs for filament yarn and artificial fibres, including bamboo fibres not manufactured in India. 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 mandatory establishment of testing infrastructure to obtain BIS certification which is “cost–intensive” is not viable for micro, small and medium enterprises (MSME), the letter said.
The proposal for a single authority i.e. TC has been mooted by the confederation of Indian Textile Industry (CITI), apex body for the T and C sector. TC has been serving the industry with its knowledge base and aids in affordable testing facilities through its laboratories.
India is losing market opportunities to competing nations due to the disadvantageous position in MMF raw materials. The time has come to switch over to polyester viscose, looking at the vast scope for increasing consumption of MMFs in the country. The share of MMF products in the total textile production is considerably lower than that of world overage. In fact, the share of MMF products in exports is even lower than that of total textiles production Exports of MMFs, worldwide is worth dollar 158 billion compared to India’s just dollar 6.5 billion. Global MMF consumption is slated to touch 76 percent by 2030 from 71 percent in 2019.
Our current reputation in the global market is basically as efficient supplies 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 MMF’s to promote the use of the fabrics 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 madeups, based on MMFs.
There is no difference in technology or skills required for cotton and MMF products. The difference is on cost competitiveness of fabrics. 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 retrial textile production. The balance between the two should be properly addressed before duties are imposed on MMF’s, 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-à-vis synthetic fibres will be belied. The ratio is 68 percent cotton and 30 percent artificial fibres in India against 72 percent MMF’s and 28 percent cotton worldwide.
China, Taiwan and other countries are into the business of synthetic textile manufacturing. Looking at the global trends, synthetic is projected to be the fibre of the future. It is expected to cover around 70 percent of the total fibre demand globally, while cotton is to account for one-fourth’s by 2030. All this is because of the “drastic shift in the global textile and apparel industry from cotton to synthetics” says Sanjay Arora, Business Director, Wazir Advisors Pvt. Ltd. Why synthetics? It is because of its cost effectiveness. It is a fibre that can be blended with other fibres like cotton and spandex for performance requirements. Again, recycled polyester have a “pride of place as a green textile option today” opines Arora.
The popularity of synthetic textiles has been rising rapidly. This is because of low-cost demand–supply gap in cotton and versatility design and application.
For instance global cotton supply is not increasing in line with the overall fibre demand growth, with the fabric demand increasing due to rise in population and consumer prosperity in developing countries. However the land under cotton cultivation is decreasing due to competing land use which is more attractive.
There is a myth in the textile industry that polyester is for the rich and cotton for the poor. Therefore, tax polyester based products at a higher rate. The fact is that it is the wealthy sections of society which wear polyester because of the low maintenance cost and longer life, says Rahul Mehta President of the Clothing Manufacturers Association of India (CMAI). Cotton is favoured by the rich who do not mind the shorter life and higher cost of maintenance. CMAI wants the fibre disparity in GST rating across the value chain to be removed though there is full neutrality at the apparel stage. Mehta also touched upon the differential rates between apparels of below Rs.1000 in the present situation to say that a garment worth Rs.1200 or Rs.1500 is worn by the rich is strange.
India has become inspirational and exposure to the internet and TV has raised expectations of consumers. They are beginning to realize the value of brands. In such a scenario, to charge 7 percent extra on goods above Rs.1000/- is unnecessarily curbing consumption and “encouraging manufacturers to cut corners to keep the prices below the threshold level”.
CITI memorandum notes that international markets demand fabrics from airjet and waterjet looms, warp knitting suitably processed using latest technologies including waterless and other eco-friendly dyeing technologies. CITI points out that import of garments and made-ups have surged, particularly from neighbouring Bangladesh resulting in opportunities and job losses. Besides cheaper imports of dyed knitted MMF fabrics from China is severely impacting the Indian manufacturers. A kg of dyed knitted fabric costs around dollar 3.50 against the import price of dollar 1.41 a kg. The total imports of MMF knitted fabrics were 319 tonnes per day during 2019 – 20 increased to 672 tonnes a day during the period April – August 2023.
CITI has also wants special Advance Authorisation Scheme (AAS) for exporters of VSF products to be implemented without impacting the domestic manufacturers to give them protection. CITI has suggested rounding off to one year the export obligation validity period and actual user condition, non transferable or after fulfillment of EO. The industry is predominantly decentralised and in the MSME segment. It is highly difficult for it to create required testing facilities due to financial constraints. Testing facilities of Textile Research Associations (TRAs). Textile committee needs immediate BIS recognition. Besides, the government should create testing facilities across the country at charges on par with TRAs and TC.
