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Vice President - International Business OWM
What is the size of the Indian textiles industry, and what has been the growth percentage in last few years?
India is one of the largest producers of textiles in the world. Abundant raw materials like cotton, silk, wool, jute, etc, and skilled workforce have made it a global sourcing hub. India is the world's second largest producer of textiles and garments. The Indian textile industry accounts for approximately 24 per cent of the world's spindle capacity. India's total market-share-in billion US$-is 69 per cent in textiles and 31 per cent in garments. India has surpassed Italy, Germany and Bangladesh to emerge as the second largest textiles exporter. The Indian industry is currently estimated at US$ 108 billion and expected to reach US$ 220 billion by 2020.
How do you expect the Indian textiles industry to fare in the coming years?
The Indian textiles industry is set for a strong growth catalysed by a strong domestic consumption and export demand. The new 15-year-textile policy is on the anvil. Various government schemes such as TUFS called for investments worth more than ₹ 2500 billion in the industry. Schemes for integrated textile parks provide world class infrastructure to new textile units. An integrated processing development scheme for the sanction of processing parks has been initiated. There are tax incentives for R&Ds. Indian government has allowed 100 per cent FDI in the textile sector. In light of the above initiatives, I presume that the Indian textiles industry will have a bright future in the years to come.
What are roadblocks to successful textile exports in India?
The roadblocks are as below:
1. High transaction costs involved in capitalising the incentives rolled by the government;
2. Scarcity of trained manpower;
3. Escalating energy costs;
4. High transportation costs;
5. Lack of economies of scale.
How do you think will the Trans Pacific Partnership (TPP) affect the Indian textiles industry?
In my view, TPP will adversely affect the Indian textiles industry as India is a non-member and deliberately left out of the TPP. There will be huge trade diversions which will result in a huge deficit in this sector. The member countries of TPP will have zero duty or preferential duty access to the US, whereas India will have to pay higher duties, making our garments uncompetitive. In order to overcome and sideline the TPP effect, we must strengthen the ASEAN trade agreement and put more and more products in the list. We can also explore new avenues for such kind of free trade agreements (FTAs) with Latin American nations.