ROLE OF TEXTILE SMES IN ACHIEVING THE TARGET OF US $1 TRILLION IN MERCHANDISE EXPORTS
For fifty years, India used to import oxygen ventilators from around the world, and lately, most from China. When the pandemic hit India and the world in 2020, India faced a huge shortage of life-saving ventilators and PPE kits. There is a saying that “necessity is the mother of invention”. Many companies in India converted a part of their manufacturing facility to make ventilators and in four months came up with an international standard ventilator. Today, some of these companies have qualified for UN supplies and have started exporting. The same storey applies to the PPE kits and many other products. This is an apt example of what an Atma Nirbhar Bharat, through its entrepreneurs, can achieve in manufacturing and exports.
Today, the largest economy in the world is the USA, with a GDP of $22 trillion. Second is China, with a GDP of $14 trillion. India has a US $ 2.9 trillion economy. China’s total exports are US $2.73 trillion, the United States’ total exports are US $2.18 trillion, and India ranks 13th with US $484 billion (US $0.48 trillion).China is an export-led economy, and India is a consumption-led economy. If India wants to reach a US $5 trillion economy by 2025, as per the wishes and efforts of our dynamic and globally respected PM Narendra Modi, it can only reach this milestone through US $1 trillion of exports. Textiles play the most important role in achieving this target. Due to their large volumes of production, largee Textile companies in India are primarily interested in the large market of India. It is the textile small and medium enterprises (SMEs) of India that are more interested in exports.
Exports are the benchmark of competitiveness. If textile SME’s in India need to increase exports, there are some strategic and some operational aspects that they will need to work on. Here are some suggestions for a strategic approach: KEY-DW.
K: We have now entered into a knowledge economy. As textile SME owners and staff gain knowledge about global markets and competitiveness, so will their business grow, including exports.
E :We have entered into an eco-friendly economy. The recent COP21 climate summit has reinforced this global commitment. India is the only country that has so far fulfilled its commitment. Textile SME owners should look at starting one new eco-friendly product or business that will have a huge global market for exports. The younger generations of business families will also love to join and build this type of business because they are more sensitive towards the environment than earlier generations.
Y: We have entered into a youth-driven economy. 65% of the Indian population is below 35 years of age and 50% of the population is below 25 years of age. India is today one of the youngest nations in the world, with a mean age of 29 years. This segment of the population is not only a market in itself but also a workforce to be incorporated into textile SME’s by inducting college-going interns and fresh graduates into the workforce as they understand the taste of today’s youth as a market and are digitally more connected and love the work from home approach.
D: We have entered into a digital economy. Every textile SME owner must do a digital audit of its functions like finance, HR, marketing , admin, and production. Except for production, almost all functions of business can be digitalized. Many people say that this may lead to unemployment in India. This is not true. In fact, it may lead to the reskilling of the existing workforce to become more competitive with the latest skills needed by textile SME’s. Another aspect of the digital economy is that businesses across India and the world are going online with their sales. Every textile SME should partly move their sales to online e-commerce as an alternate channel of distribution, either by way of joining online aggregators or by starting their own stand-alone e-commerce portals, which starts from as low an investment as Rs. 35,000 (US $500) a year. Social media marketing should also be understood and invested in, as all over the world, people have started using these for decision making.
W: We have entered into a work-from-home economy (WFH). Textile SME owners should try to do a WFH audit and see which functions of their business can be done from home by them as well as their staff. This way, they can get a national talent pool to work for them. Even job interviews can be conducted online. Even a hybrid model can be tested for local staff. This will lead to an increase in productivity as well as competitiveness. Because of this factor, Indian service exports in IT, pharma research, medical transcription, LPO, BPO, etc. grew twenty times because of this factor. The same impact can be achieved by MSMEs in products too. We tested this model with more than 50 SME’s, including textile companies in India during the pandemic, and it worked wonders. These companies will continue to use the hybrid model or WFH approach.
It is easier to earn a dollar than a rupee. In terms of operations, textile SMEs should investigate the establishment of shared warehouses abroad on a cluster basis, participate more aggressively in virtual expos, conduct digital market research using the SPANCO approach, prepare themselves for exports with packaging and certification standards, place their products and services on E-commerce portals for sales, appoint agents and reps in international markets, organise digital B2B meetings with importers, and participate in i
Innovation in products, design, and services of textile SME’s will act as a differentiator for them in global markets and will get them better prices. An entrepreneur’s work is NOT TO RUN the business but TO GROW the business, which is possible only by delegating authority and implementing an IT-based monitoring system.
Governments, both state and central, have a strategic role to play as a facilitator for exports by declaring an aggressive and practical export policy with overseas market growth incentives. The production-linked incentive scheme is a good step in the right direction, and I hope textile SMEs can benefit from it.
Exporters are the economic soldiers of India. I am confident in the hard-working nature, honesty, ability, ingenuity, and street smartness of textile SME’s to enter and grow in global markets to take Indian exports to $ 1 trillion.
