'Make in India' should happen with 'Make for India'
Prashant Mohota, MD of Gimatex Industries Pvt Ltd talks about the current challenges faced by the Indian textile industry, his solutions to address them, and the working structure of Gimatex in an exclusive interview with fibre2fashion.com.
What are the challenges facing the Indian textile industry?
The biggest challenge facing the Indian textile industry is competition from the other low-cost countries like Bangladesh, Vietnam, Indonesia and Pakistan. In the last few years, these countries have given a special impetus to their textile industry and been able to build new capacities with latest technology. With their competitive cost or at-par cost in terms of labour, power and interest rate and ease of doing business, they have been able to give India a run for money in terms of capturing the global market, including India. Additionally, many of them have been offered favourable import conditions in many countries in United States of America and European Union, ensuring an easy trade route.
Another major challenge is to ramp up domestic demand within the country. Indians continue to have a low per capita income, and hence lower per capita consumption of textile. Unless the country achieves a high rate of GDP, growth rate with rising income depending on foreign markets for our production would provide quite a challenge.
The next major challenge is to promote use of synthetic textiles in our lifestyle. Synthetic textiles, owing to so many technological developments, offer certain unique benefits in terms of providing a right product for various applications.
What would be your five steps to address these challenges?
The steps suggested are:
1. To create a 'Brand India' image, where Indian products can speak for themselves in terms of quality and delivery
2. Implementation of GST to ensure one market across the whole country without traditional barriers of trade between states. This will also help control the shift towards cotton by bringing cotton taxes at par with synthetic
3. Developing a better and competitive infrastructure for ensuring easier, economical and faster movement of goods
4. Promoting innovation in terms of new product development for India to make a name for itself
5. Promoting cluster approach for future growth as it helps to bring down cost using common facility and common infrastructure
What more needs to be done to make the 'Make in India' vision articulated by Prime Minister Modi a success?
The excellent campaign that Modiji and his government have been able to launch is currently plagued with poor economic condition across the globe. So, to delink this, it is most important that 'Make in India' happens with 'Make for India'. Automatically, the dependence on export or other countries' markets will have to be brought down by developing a market within the country to make the 'Make in India' campaign fully successful. Also, the job of making an industry-friendly atmosphere by easing labour laws, reducing interest rates and easing ways of doing business in India with adept judicial procedures will go a long way in ensuring the dream of 'Make in India' become a reality.
What is the synergy that you have with cotton farmers? What process do you follow when you are sourcing cotton?
Most of our units consume farm-produced cotton as a major raw material, and the units are situated in places where you have many farmers directly interacting with our unit staff. Hence, we work very closely with each other, sharing crucial information with regard to increasing yield and quality of cotton. Shortly, with CITI CDRA, we will be working to enhance output of cotton fields by an innovative technique using high-density plantation for selection of cotton varieties, informing the farmers what cotton should fetch good prices in the coming season, and the best possible manner to grow and harvest such cotton.
The process followed in sourcing cotton is that wherever farmers innovate on cotton produce like BCI or Organic, we may give a lot more than the increase in cost encumbered by taking such a step. This way, farmers are becoming more interested in developing these niche varieties for us.
How has the growth story been at Gimatex for both exports and the domestic market? What is the targeted percentage growth for the next two years?
The growth story for Gimatex has been phenomenal owing to our integrated approach and insightful day-to-day management. Since our locations are more suitable for the domestic market, we remain more competitive in the domestic arena. Just to share some basic information, we have been able to double our sales in the last three years, and we expect to further double it in the coming two years. Recently, we have been allotted a textile park for future growth, which offers several benefits over any green-field expansion.
What are the key benefits offered in this new textile park? Can any new entrepreneur be a part of it?
With the intention to provide more jobs and a ready market for our farm products, both the Central and state governments have offered some exciting schemes for our new textile park situated in the heart of the country. I strongly believe this is the best possible place for anyone to make a new investment in textiles. Since it is a cluster approach, anyone, both domestic and foreign companies, are welcome. The benefits offered for new investment in the park include:
o Reasonable value of land, common infrastructure and common utilities for usage
o Reduced capital requirement ranging from 50 per cent to 75 per cent owing to availability of common facilities and infrastructure
o 10 per cent to 25 per cent capital subsidy on the investment depending on the project
o Interest on term loan in the range of 2 per cent or less for the full period of loan
o Power cost to be approximately Rs. 4.5 per unit
o All government compliances and liasioning in place including pollution, boilers, labour, factory inspector, electrical etc.
o Vat refund for minimum seven years from 60 per cent to 90 per cent of the Vat amount input/output depending on the investment involved.
o Assistance for banking facilities, recruitment, information technology networking, training and development, R&D, quality assurance, marketing.
o Situated right in the middle of the country, it offers comfortable access to all parts of the country through roads (1 km from National Highway 7), trains (3.5 km from railway siding) and airplane (68 km air cargo). With GST on the anvil, this will be a huge advantage.
o The area has ample availability of labour, power, water.
Published on: 15/05/2015
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.