NFP needs to address cotton stock-to-use ratio – Mr Jain, TT Ltd

17 Jul '10

6 min read

The Union Textile Ministry had a few days back released the draft of the much awaited 'National Fibre Policy' (NFP), which took a year to formulate and involved eight working groups. But is the industry impressed with the NFP is the moot question.

Fibre2fashion as an initiative spoke exclusively with Mr Sanjay Jain, Joint Managing Director of the vertically integrated, Delhi based TT Limited. TT Ltd has operations across the whole textile value chain, beginning from cotton ginning, yarn, fabrics, clothing and right up to retailing. Along with being an ISO-9000 certified company, it also has an OEKO-TEX certificate and is also a recipient of several awards for its exceptional quality and export performance. When asked about his opinion on the draft fibre policy, Mr Sanjay Jain was very categorical. He began by saying,

1) It is supposed to be a Fibre Policy and not a textile Policy. However a large portion of the policy talks and dwells upon yarn and other downstream products. The policy should limit itself to discussing the various types of fibre and make a policy to increase its availability in India at competitive and reasonable prices so that fibre can be one of the competitive advantages of the Indian textile industry vis-à-vis other competing countries like Bangladesh and Vietnam whose apparel exports are equal to us, despite they do not produce their own fibre. Other issues like TUF, yarn etc should be dealt in a separate Textile Policy. Sorry to say the purpose and intent has been heavily diluted.

2) Another important thing missing in the policy is the stock to use ratio of cotton fibre. This is a very basic requirement of any National Fibre Policy to decide how much should be exported and how much is required to be stocked. All major consuming and producing nations take special care of this - China is the biggest example. One of the reasons why a Fibre policy was demanded was to manage the cotton supplies and ensure Indian downstream industries don't suffer due to unbridled exports.

3) India currently has one of the lowest stock to use ratio in the world. In this year we would hardly have 15% stock to use ratio against the global stock to use ratio of about 40%. This is a very alarming situation and needs to be addressed permanently. However it has been left vague without laying down a definite and reasonable percentage. It should be understood that cotton is an agricultural crop dependant heavily on monsoons. Who will help the country when there is a poor monsoon or crop damage!!!

4) Policy has addressed the yarn export tax and export volume issues, which are clearly outside the mandate of any Fibre Policy. However no mention of how the exports of cotton fiber would be calibrated and controlled to safeguard the interests of both the farmers and the downstream industries has been made. It should have laid down a very clear policy to avoid any abrupt bans and taxes as done this year, so that all players could work with a clear roadmap and not be dependent on Govt policies.

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