Consumption sluggish due to fall in Indian economy in last 2 years
The slowdown in the Indian economy in last two years has affected the textiles industry. However, Sutlej Textiles saw a stable, sustainable growth despite the challenging macro-environmental factors. Dilip Ghorawat, whole-time director and CFO of Sutlej Textiles shares industry insights and the company’s growth plan with Fibre2Fashion.com
What has been the growth rate in the yarns and home textiles sectors?
There is no specific break-up for the yarns sector. The break-up is into textiles and apparel. The domestic textiles and apparel industry is expected to reach approximately $100 billion by 2017 and $141 billion by 2021, up from $67 billion in 2014. The total cloth production in India is expected to grow to $112 billion sq metres by FY17 from $64.3 billion sq metres in FY15. For yarns per se, the exact numbers are not there.
In case of the home textiles sector, the global home textiles industry is valued at $45 billion, out of which India’s share is 11 per cent. The Indian home textiles industry is expected to grow at a CAGR of 8.3 per cent from $4.7 billion in 2014 to $8.2 billion in 2021.
Please share some export figures from India on yarns and home textiles.
As I said, yarns’ figure as such is difficult. But I can only say that the Indian textiles industry contributes approximately 5 per cent to India’s GDP and 14 per cent to industrial production in the country. The textiles industry is the largest contributor to India’s exports. And it is approximately 11 per cent of the total Indian exports. The industry’s export earnings were $40 billion in 2014-15. It is currently estimated to be around $108 billion, and it is expected to reach $223 billion by 2021.
What macro-economic factors affected the global textiles industry and its growth last fiscal?
The slowdown in emerging economies has been attributed to free falling commodity prices, rebalancing in China, plummeting oil prices, and challenging macro-economic factors. In the coming years, growth in developing countries will depend on improvement in the economic conditions of countries like Russia, Latin American economies, growth in China itself, and also other emerging economies.
How were the Indian manufacturers and exporters affected?
In view of falling commodity prices, the sales were flat and due to the drop in the Indian economy in last two years, the consumption or uptake was very sluggish. And the international scenario has resulted in the weakening of demand in the Indian textiles industry too.
What governmental measures can help in solving these problems?
The government has given a thrust in the budget to rural economies. There is 100 per cent FDI in textiles. The government has also introduced A TUFS, Made in India and a scheme for an integrated textiles park, which we feel should support the Indian textiles industry going forward. The government has also introduced export incentives like MEIS, Interest Sub-vention, etc which will give a further thrust to exports in the textiles sector. Additionally, interest subvention on polyester viscose yarn, which is exported on a daily basis, should be reintroduced. Today in China, there are 30-40 incentives on yarns, and India could also consider such incentives.
Second, in some countries like Turkey, there is an anti-dumping duty. We are requesting the associations there to support the exporters of yarns by removing such anti-dumping duties. The government is proactive, and we hope that at the appropriate time, this will help us to further improve the conditions of spinning mills in India.
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