Business

Textile Industry Shows Signs Of Turnaround

The Indian textile industry is looking to complete its transition in the wake of demonitisation and the implementation of GST. The industry players are of the view that worst is over and from here the industry can only march northward. The internal factors are improving, even as external factors are in favour of India. They believe that all said and done India will certainly gain from the fact that China is retreating from a large part of the textile value chain. "After over a year of upheaval and challenges, things are now gradually looking up on the domestic front. While the industry is now almost through with the headwinds of these two measures, it will be ready to explore the opportunities arising in the global market. China is vacating a sizeable portion of the global trade and India no doubt is a strong contender to fill that gap and benefit out of the whole scenario," says Madhu Sudhan Bhageria, CMD, Filatex India Ltd. Filatex, engaged in the manufacture of wide range of polyester and polypropylene multifilament yarn and polyester chips, has reposed its faith and continued its investment spree to expand its portfolio. In the last few years, the Rs 1,930-crore company has invested over Rs 500 crore and is looking to invest further in order to get into value-added products as also integrate its production chain forward into fabrics and garments in the future. In the next four-five years, Filatex is aiming a turnover of around Rs 7,000 crore. "We are bullish in the medium to long term and hence preparing ourselves for the future. We see the ongoing challenges as short-term hiccups," adds Bhageria. On the export front too, things are turning around. As per ministry of Commerce & Industry, DGCI&S data, exports of textile and apparel stood at Rs 20,353 crore during October 2018 as compared to Rs 14,779 crore during October 2017, showing an impressive growth of 38%. It is noteworthy that over the same period apparel exports have grown at a whopping growth of 54%. The positive IIP data is also a major development. The IIP production data for T&C witnessed robust year-on-year growth during September 2018 as compared September 2017. Textiles and apparel production registered a growth of 5.4% and 20.9%, respectively during September 2018. "The growing positive trend shows visible signs of recovery after a difficult period. The industry is hopeful that the government would take suggested measures to boost exports and limit imports. Gauging the current scenario, we are confident that in the coming months, with the government support, the industry would be in a much more comfortable position. Continuous growth in exports and IIP index would result in boosting employment, scaling up production and most importantly making "Make in India" initiative a reality for the T&C Industry," states Sanjay K Jain, Chairman, Confederation of Indian Textile Industry. The government has recently taken note of the plight of the domestic textile industry and increased import duty on several textile and apparel items. The move follows an unprecedented rise in imports in the last few months, even as exports of textiles and garments have grown very marginally. In 2017-18, India imported around US$ 7 billion worth of textiles and apparel products. Imports grew at a rate of 16% from US$ 6 billion in 2016-17. Imports of readymade garments increased from US$ 596 million in 2016-17 to US$ 773 million in 2017-18. Post GST, there has been a significant decline in import duties on these items, thus leading to aggravation of the situation. While the industry welcomed the move of increasing duties, it feels that there is a big issue of imports from Bangladesh where there is full exemption of basic customs duty and hence it is a gateway for Chinese fabrics entering India duty-free. This is because no rules of origin are in place for duty-free imports from Bangladesh.