Globally, Man-Made Fiber (MMF) is the most dominantly consumed textile fiber. Man-made fibers account for 68% of all fibers produced worldwide. Over the years, natural fiber has lost its market share to MMF, mainly due to the unpredictability in the availability of cotton, growing popularity of polyester, stringent quality demands and increasing use of technology. These days Information Technology (IT) is increasingly being deployed in a plethora of activities in driving efficiency, productivity and competitiveness in the business. Especially in the textile exports sector, IT has great significance.

The demand for manmade fibers is on the rise and they are required in the ever-growing fashion and apparel industries. Equally important is the use of IT in textile and especially MMF industry, right from the designing of products through Computer Aided Designs (CAD), to maintaining databases, packaging, etc. IT plays a great role in the textile industry. But in the recent years, a lot of unfair trade practices have been observed in IT usage in the manufacturing sector, which involves the usage of non-genuine and pirated software and hardware. These types of unfair practices not only give rise to unhealthy competition among manufacturers but also interfere with the quality of products.

To combat such unfair usage of IT and to create a level playing field, some states in the USA have passed a new Unfair Competition Act (UCA) that allows only those manufacturers using licensed and genuine hardware and software in their business to export and sell directly and indirectly through third parties their products to the USA. This attempts to address the issue of one manufacturer gaining an unfair competitive/cost advantage by keeping their IT investment low, through pirated software. Since IT compliance has also been an important issue, especially for those concerning Copyrights Act, this US regulation on unfair competition presents a compelling opportunity for the Indian manufacturing sector.


Indian Manmade fibre exports viz-a-viz China

US imports of Synthetic cloth and fabrics (including rayon), thread and cordage, India-China comparative analysis1


The US import of synthetic fibre from India has been on rise over the years, but if we compare India's export to China's, China holds a very strong position in US import of synthetic fibre. The data shows that US import of synthetic cloth and fibre from China are much higher as compared to imports from India; hence China holds a major portion of US synthetic fibre market. The new UCA law can give us an opportunity to grab a major portion of this market, if we take a quick action.


Software Piracy rate in India an opportunities ahead


As per a report on software piracy rate published by Business Software Alliance (BSA), India is found to have low IT piracy (63%) rate as compared to its Asian competitors in the US market like China (77%), Bangladesh (89%), Thailand (72%) etc.


Piracy rate in Asian countries2


Countries

USA

China

India

Indonesia

Thailand

Malaysia

Piracy rate in percentage

19

77

63

86

72

55


Due to the low IT piracy rate in India, as compared to its competing countries, India is at an advantageous position as it is an opportunity for Indian exporters to improve their US export market share by being IT compliant.

 

In the words of Mr. Kshitij M Kotak, president, ASIRT "The act while protecting the US manufacturing will actually give Indian exporters and manufacturers a huge advantage over other competing nations where piracy is rampant. This opportunity if supported by the Indian government and grabbed wholeheartedly by Indian manufacturers will result in a booming Indian Manufacturing and galloping Indian economy, while generating unprecedented employment within India.


UCA has given Indian exporters an opportunity to grab a huge US market as due to UCA, US Companies increasingly will prefer to engage suppliers who use legitimate IT, due to lower piracy rate in India, it is at a favourable position, for the business lost due to IT piracy in other countries. Indian exporters can also grab this opportunity by converting into legal IT user as soon as possible and ensuring that they too buy their product from compliant manufacturers.


Grab the opportunity


This opportunity in USA can be mobilized by legalizing the usage of IT applications and hardware. Exporters and manufacturers needs to ensure that they do have the appropriate certificates and are compliant with existing framework of the law. Today a couple of offline and online tools are available that makes managing your software assets easy. Software Asset Management (SAM) is one of those many tools, in which the ownership of ones hardware and software asset will be audited and validated, for this the firm needs to approach any software publisher. By getting SAM done one will get the compliance certificate and this will enhances the value and brand reputation of the firm in the market.


Moreover switching to genuine IT hardware and software will cost mere 1% increase in the manufacturing cost for the Indian SMEs, while at macro level it will result into tripling of manufacturing exports to the US by 2015, it is a win- win situation for Indian manufacturers.


1source: http://www.census.gov/foreign-trade/statistics/product/enduse/imports/

2Global Piracy study , May 2012 by Business Software Alliance


Saraswati Rawat is a Knowledge Management Manager at Apex Cluster Development Services Pvt. Ltd.