|
Why we can expect a strong turnaround in Textile & Clothing Sector in coming months …
• Scheme for Capacity Building in Textile Sector( SCBTS) named‘ SAMARTH’ under Ministry of Textiles, with a huge outlay of Rs. 1,300 crore along with other parallel skilling programmes by the Government, will go in a big way to reduce the skill gap of the industry, and more specifically provide a value-added employment opportunity to rural women.
• Devaluation of rupee by 9 % in the last few months, will make the industry competitive globally and imports dearer.
• Import duty on about 400 items being enhanced, will provide relief to the industry which was post-GST hit by huge imports due to import barriers reducing significantly.
• Two important GST decisions in last 3 months which have allowed refund of excess ITC to the processing and fabric industry, have reduced the cost of fabric by 3-4 %, especially MMF fabric.
• Relief to the SME manufacturers( industry is largely populated by SME) by easing the GST Returns procedure and other GST Reforms.
• Accelerating the refund of GST dues to the industry, which has eased working capital pressures on the industry.
• Domestic demand picking up due to settling down of GST systems, rural demand picking up due to MSP increase and good monsoons.
|
“ Garments have more growth opportunities compared to fabric as fabric business seems to be saturated.” |
– Suresh Kumar, VP – Marketing, Goodwill Fabrics, Bangalore
“ In current scenario, to survive in business it is all about volume orders; it is not the time or question of making profit.”
|
– Abhay, GM, Washing, Texport Syndicate, Bangalore
“ So far our operations are going smoothly and now we are moving forward with a new factory.”
– Harsha, Director, Seam Works, Bangalore
|
Prabhanjan Industries is now coming up with a new factory of jeans manufacturing. Pavan Kumar of the company shared,“ We have enough experience and some resources also. Normally banks don’ t support projects which are into remote areas, but we are getting support. So we decided to go for a factory which will have 300 to 500 machines.”
Investing nearly Rs. 3.5 crore, Pavan further added that choosing jeans as a product category is more viable due to good demand. The new facility will also work as a job working unit. The company is also exploring the option to invest in CAD as currently it does cutting manually.
Fresh start-ups also geared up
Recently Team Apparel Online met two professionals who have built their own start-ups in Bangalore having enough experience in the garment industry. Now they are expanding as their initial experience of entrepreneurship proved good. One of them Harsha, who has worked as a merchandiser in top apparel companies like Arvind Ltd., Madura Fashion & Lifestyle, just four months back started his own organisation Seam Works. Having 200 machines in Bangalore, his firm offers formal shirts and is expanding further.“ So far our operations are going smoothly and now we are moving forward with a new factory. My idea was to come up with multiple categories, but I started with shirts as there is huge scope in this category,” shared Harsha. His upcoming new unit of 1,000 machines( in phase manner) will be in Andhra Pradesh and will be a big support to target premium brands in domestic and overseas markets.
What do the numbers say?
Of all the associations, the Confederation of Indian Textile Industries( CITI) under the leadership of Sanjay Jain, Chairman, is the most proactive in sharing recent trends and commenting on policies and their impact. Just recently Sanjay exuded
|
confidence that the worst is over for the Textile & Clothing Industry and it is finally on the verge of a turnaround; and he put the credit for this U-turn on the shoulders of the Government!
As per the quick estimates data by DGCI & S, the exports of textiles and apparel has increased by 11 % in July 2018 over the same period last year. According to Sanjay this has been possible with continuous support from the Government with a slew of measures on all fronts. Sanjay also stated that overall growth in exports during April-July 2018 has been 3 %, vis-à-vis same period last year. Further, the MMF segment, which is expected to be the growth driver of the industry in the coming years, has seen increase in production. Growth has been observed in production of man-made fibre, spun yarn and fabric during April to June 2018.
Another positive is that as per RBI Financial Stability Report – June 2018, the stressed advance ratio of textile sub-sector has also improved from 23.7 % in September 2017 to 22.3 % in March 2018, indicating signs of recovery. It has been pointed out that the maintenance of a competitive exchange rate is an essential prerequisite for labour-intensive manufacturing in mature industries like textiles. According to Sanjay, the currency management by the Government has benefited the exports and is discouraging imports.
Significantly, this year, the imports’ growth has come down. While the import of textile and clothing has increased from US $ 1.78 billion in April-June 2017 to US $ 1.87 billion in the same period this year, an increase of 5 %; it is significantly lower than the growth of 16 % last year. The measures taken by the Government to increase the import duty on various textile and apparel items will help in further reducing the imports in coming months, feels Sanjay. He added that continuous support from the Government is expected to put the industry back on track and it is anticipated that the textile and apparel exports should grow by 7 % while imports will stay flat in this 2018-19 season.
|