Industry And Cluster | News & Insights

SRTEPC resolves to achieve US$ 7 bn. exports during 2020 amidst continued challenges in the Manmade fibre Textiles segment.

Published: January 25, 2020
Author: TEXTILE VALUE CHAIN

It has been envisioned by the Government to achieve a US$ 5 trillion economy by 2024-25 and this was announced by the Government during the presentation of Union Budget 2019-20.

Textiles segment including the Manmade-fibre textiles is one of the sunrise sectors- a key driver for contributing to India’s USD 5 Trillion economy target by 2024-25.

In this direction, the Government has already several ongoing initiatives across sectors focused on growth. The proposed Industrial Policy 2018, proposed New Textile Policy, etc. are likely to provide overarching, sector-agnostic agenda for the textile sector and envisions creating a globally competitive Indian Textile industry that is modern, sustainable and inclusive.

The ongoing export trends of total MMF textiles export from India though not encouraging, value added segment like Fabrics exports witnessed nearly 8% growth during April-October 2019-20 as compared to the same period of the previous year. We are optimistic that the green shoots in exports will get further momentum in the remaining months of the financial year 2019-20, Shri Ronak Rughani, Chairman, SRTEPC mentioned. 

He also added that along with the various initiatives of the Government, the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) which is the only Export Promotion body for the Manmade fibre (MMF) and MMF textiles, has been making constant efforts to enhance the contribution from the MMF and MMF textiles in achieving the target of US$ 5 trillion economy by 2024-25.

According to him, SRTEPC has prepared a20 points strategy for the development of Manmade fibre textile segment as mentioned below.

  • Fibre Neutrality:The MMF textile segment is highly capital intensive and operate in decentralised textile sector being predominance of MSMEs. It is urgent to bring in fibre neutrality and policy parity between fibres.
  • Raw-materials to be made available at international price. In India the price of textile raw materials is 5-10% higher than international price which is why our exports are not competitive globally. Therefore,a proper mechanism to put in place forensuring availability of raw materials at international price for the entire MMF textile value chain.  
  • Higher interest rate. Measures to make funds available at low rate of interest at least at 5-6% rate of interest. Interest rates in India are amongst the highest in Asia and it is one of the reasons for higher cost of textile products in India and it is also one of the reasons for becoming NPAs in the country.
  • Textile Job worksto be considered as Manufacturing in the GST regime. In the textile sector, value addition works such weaving, knitting, processing, embroidery, etc. are done mostly through job work which accounts for a significant part of the total manufacturing costs. Therefore, these job work/ services need to be considered as manufacturing and allow for ITC/ refund of the duties paid on these activities under the GST regime.
  • Textile Merchant Exporters to be considered as Manufacturer exporter.

Textile Merchant Converter Exporters should be treated on par with Manufacturer Exporter or the role of Textile Merchant Converter Exporter may be defined separately so that all benefits, as available to the Manufacturer Exporter can also be extended to Textile Merchant Converter Exporter.

  • Branding. Current global visibility of the MMF textile industry is inadequate. In line with the successful apparel brands such as INDITEX (ZARA), Hennes & Mauritz, Gap, Marks & Spencer, etc. from EU and USA, India also needs to have textile brands that will have global presence.
  • Perception on Indian Textile Industry to be changed. Indian textile industry has been viewed primarily as a cotton industry globally. World does not know the actual strengths of Indian MMF textile segment and hence global perception is not encouraging. This perception needs to be changed. 
  • Government Schemes. Continue the existing Chapter – 3 benefits/ Schemes such as MEIS, RoSL/RoSCTL, Interest Equalisation, etc. New Scheme RoDTEP also needs to cover entire MMF textile value chain such as fibre, yarn, fabrics, made-ups. etc.
  • WTO compatible Schemes. Government needs to support the textile segment by continuing the existing schemes until the new WTO compliant Schemes are made functional. 
  • Rationalisation of GST on MMF textiles segment and Refunds (IGST/ITC) to the exporters/ business need to be immediate. Refund of IGST/ GST on import/procurement of capital goods for encouraging new investments.
  • Organise an Annual International Event in India on a regular basis. Lack of proper exposure and aggressive marketing is one of the weakest linkages for exports of Indian textile products. Therefore, there is an urgent need to have a mega Exhibition/ Fair like “Textiles India 2017” that will showcase the textile value chain of India
  • Include Developed Markets also to extend the benefits under MAI Scheme.The developed countries viz., United States, Turkey, Germany, Italy etc. play major roles in sourcing MMF textiles from India. Therefore, the above developed countries also need to be included under MAI Scheme and expenses for buyers from the developed countries also need to be reimbursed under the MAI Scheme for conducting RBSMs.
  • Inclusion of Manmade Fibres (MMF), MMF Yarns under the Interest Equalisation Scheme. Funding requirements are more in case of the MMF and MMF yarns segments. Therefore, the Interest Equalisation Scheme needs to be extended to Manmade fibres (MMF), MMF yarns segments also.
  • Schemes for production and development of Manmade fibre (MMF) raw-materials, Manmade fibre and Filament segment in line with Cotton, Jute, Silk, etc.

Schemes/ Mission Approach in line with Cotton, Silk, Juteneeds to be introduced specially for production and development of Manmade fibre raw materials viz., PTA, MEG, Caprolactam, etc., Manmade made fibres and Filament segment domestically in line with Cotton, Jute, Silk, etc.

  • Effective FTAs. FTAs with major textile consuming markets will give us substantial price advantage. Therefore, the FTAs with EU, GCC, Turkey, USA, etc. need to be prioritised along with review of the India – ASEAN FTA.
  • Extend TUFS for Manmade fibres and Filament yarns. Application of latest Technology is vital for Manmade fibre and filament segment and benefits of ATUFS to be extended to MMF and filament segment also.
  • Resolve Anti dumping cases.Government also needs to extend financial support to exporters by enhancing the funds under MAI for fighting the ADD cases in major MMF textile importing countries viz., Turkey, Peru, USA, etc.
  • Mandatory follow up of FTP guidelines for issuing RCMC by the EPCs and FIEO

It has been under discussion that FIEO would be granting membership only in case the subject product is not covered by any EPCs as mentioned on Para No. 2.94 (b) of HBP of FTP 2015-20. This will help SRTEPC to focus on the specific Manmade fibre textile segment and continue its efforts to take exports to greater heights in the International Market, which is not possible for FIEO being a multi-product Organisation.

  • Upgrading R&D to achieve Zero Defect – Zero Effect and there is Need to change the present profile of Indian MMF fabrics segment dominated by woven fabrics as the world’s ratio is 40% Knits and 60% wovens.
  • Attract investment in indigenous manufacture of State-of-the-art textile machinery, accessories and equipment (except spinning as all other machines are imported).

Shri Ronak Rughani, Chairman, SRTEPC informed that amidst current challenges, it is hoped that after suitably addressing the mentioned issues, exports of Indian Manmade fibre textiles will be around US$ 7 bn by end of Financial year 2020-21, witnessing a growth of at least 10% from the current level of export.

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