Mr. Sumit Parmar, Wazir Advisors
“Technical Textiles” is one of the fastest emerging industries across the world. Its innovative nature, versatility of its usage, efficiency and durability of its products and the cost effectiveness makes this industry successful.
These attributes have helped technical textiles industry to gain popularity in the domestic market of India also. The market size of Indian technical textile industry stood at INR 92,499 crores in 2015- 16 registering a healthy growth of 12% (CAGR) over the last decade. However, this industry has a long way to go to realize its full potential in the Indian domestic market. This article illustrates the opportunities present for this sector which need to be capitalized immediately as well the challenges which need to be overcome.
Vast Opportunities to be tapped
India is the fastest growing economy in the world registering an average GDP growth of 7.6% over the last decade. This factor when coupled with the high growth potential of technical textiles sector presents an array of opportunities which are detailed in the coming segments:
- Growth in manufacturing sector
Technical textile primarily finds usage in various manufacturing industries such as automobile, construction, aviation, etc. Manufacturing sector has been a pillar of growth for the Indian economy with many such industries registering double digit growth over the last decade.
Automobile sector is expected to grow at 12% CAGR over the next decade to reach an estimated production of 75 million vehicles in 2025. This sector has multiple usages of technical textiles in the form of seat belts, airbags, tyre cord, upholstery, carpets, insulation felts etc. The durability and efficiency of these make them much suitable for use in automobiles and hence their usage has increased in this segment. With government and industries focus on making automobiles more safe, consumption of airbags, seat belts and filters will also increase thus benefitting the technical textile industry of India.On a similar pattern, industries like construction, packaging, apparel and other allied industries have found extreme suitability in technical textile products instead of conventional products. The growing demand of technical textiles in the manufacturing sector reflects an extensive opportunity for the domestic technical textile industry.
- Rising importance of healthcare& hygiene
Over the last decade, the per capita income in India has doubled from US$ 730 in 2005 to US$ 1,580 in 2015. This increase in income has resulted in increasing spending power of people and the primary thing on which people are willing to spend is their health & hygiene. With the ever-growing danger of pollution and diseases in the country, people have become more concerned about their health. They are gradually shifting towards more hygienic and healthy ways of living which involves using products like wipes, face masks, diapers, dental floss, ear buds, sanitary napkins etc. All these products consume various technical textile item in different forms and due to increased usage of the end products, consumption of technical textiles has increased.
The healthcare industry has grown at 11% CAGR between 2008 & 2016 to reach a level of US$ 110 bn. It is expected to attain a tremendous growth of ~23% (CAGR) to reach a level of US$200 bn. by 2020. Increasing coverage, services and expenditures by public and private players is the primary reason for this growth. Technical textiles are used extensively in the medical industry in the form of surgical dressings, disposable bed sheets, sutures, medical gowns and masks, artificial valves, artificial heart etc. In the coming years, as the general public and the medical industry becomes more aware of the benefits of technical textiles, their consumption is bound to increase.
- Increasing focus on Sports
In the recent years, a surge in the sports culture has been witnessed in the country. The advent of multiple sports leagues in India such as IPL, IHL, ISL, Pro Kabbadi League etc. and a growing enthusiasm towards fitness has catalyzed the growth of sports. Nowadays, more and more people are going to the gym, schools are getting increasingly focused towards sports education, better sports infrastructure is being established and the government is also giving a big push to this field.Sporting equipment, artificial turfs and composites, sportswear and active wear, sports footwear etc., all of these items consume technical textiles. This growing fitness and sports phenomena presents a big opportunity for technical textiles.
- Increased spending on defence and security
Government of India allocated Rs. 2,46,727 Cr. for the defence budget in 2015-16 with a good ~11% year on year increase. A significant part of this budget is used on the security of soldiers which means bullet proof jackets, high altitude clothing, gloves, shoes and other important accessories.These equipment are meant to provide high level safety to soldiers stationed in volatile areas and hence they need to be extremely efficient. Technical textiles provides the desired toughness and efficiency to these products. Government’s increasing focus on defence and security has led to an increasing demand of these equipment and there is an opportunity for local manufacturers to cater to this demand.
As highlighted in the above segment, Indian market is filled with big opportunities for the domestic technical textile industry and the potential for growth in this sector is huge. However this industry is facing some fundamental challenges in its path to growth.
Challenges to be addressed
- Lack of Awareness
Benefits of technical textiles is still unknown to the larger masses of the country. This is the result of lack of marketing and basic knowledge about these products. In order to truly get the desired gains, these products must reach to all levels of the society as well the industry.To achieve the same, government and the industry need to build a solid infrastructure to educate people about technical textiles. This can be done by incorporating basic information about technical textiles in schools and colleges, conducting awareness programs such as roadshows and seminars, promotion through digital and social media etc. To propagate the consumption of technical textiles in the end user industry, initiatives need to be taken to organize interaction between technical textile industry and end user industries like Ministries of Water, Railways, Urban Development, and Housing etc.
- Development of Skilled Workforce
Technical textiles is a highly varied subject and comprises of multiple processes to manufacture different products. These processes require different and high level of skill sets from workers which is currently absent in the domestic industry. Majority of the government schemes for manpower training are focused on core textiles such as spinning, weaving & garmenting. There are no such specific curriculum developed for technical textiles. In order to curb this issue, there is an immediate need to organize specific forums for interaction between industry and academia so that specific curriculum could be developed for technical textiles. Also, government can modify their manpower development schemes to align with the requirements of the technical textiles industry.
- Lack of Research & Development
One of the key issues that Indian technical textiles industry is facing is the lack of product diversification. Commodity products such as jute sacks, labels & badges, elastics, tyre cord fabric, fibre fill, furniture fabric etc. constitute the major share in the domestic market of technical textiles.Technical textiles is an innovation intensive field and to excel in it, focus on product research & development is a must.Government of India has set up multiple centers of excellence whose main aim is to provide R&D support to the industry. However, the change required must come from the industry side with a change in the mindset. Young and aspiring entrepreneurs must take this opportunity and invest in research and development of technical textiles and reap its benefits in the coming years,
- Imports of technical textiles
India imports significant amount of technical textiles from countries like China, US & other European countries. These imports constitute of cheap products from China and hi-tech products from US & Europe. This signifies that Indian technical textiles industry is lacking scale and the capacities to manufacture high-tech products. Another issue that the industry is facing is the absence of specialty fibre production in India. Majority of the technical textile products use specialty fibressuch as carbon fibres, Nylon 66, UHMPE, Polyacrlyic fibres etc. which are not manufactured in India. Importing of these raw material is costlier in India as compared to importing finished goods due to the inverted duty structure. Absence of requisite raw material and modern machineries, manufacturing of high tech products becomes difficult in the country.This challenge pose as an opportunity for domestic manufacturers in the form of import substitution. Indian industry need to developmanufacturing capabilities for raw material of technical textiles while technical textiles manufacturers need to upgrade their machinery in order to manufacture value added products.
Technical textiles has true growth potential in a country like India which is currently going through a transformation phase. This transformation of the Indian landscape offers a sea of opportunity for any industry and especially for technical textile which has a lot to offer. But with these opportunities comes equal number of challenges which need to be checked for this industry to move ahead. With the right approach & positive mindset of the industry and the support from government, this industry is bound to scale new heights in the coming years.