Search the Internet          Tips  Sites: Finance, Investment

Textile industry must eye offshore forays: CII

The Indian textile industry needs to re-engineer itself and strengthen collaborations within the chain to sustain its significant presence in the global textile industry, stated a study conducted jointly by Confederation of Indian Industry and KSA Technopak.

Removal of quantitative restrictions and onslaught of competition from the neighbouring countries such as Bangladesh and China further stresses the need to strengthen collaborations through the textile value chain, according to CII.

While the extremely positive measures announced in the budget for the textile sector have instilled an environment for growth and development, CII believes that unless industry gears up to re-engineer itself, tougher competition from South East Asian neighbours is anticipated.

Tracing the growth trends of Bangladesh apparel exports, the study contemplates that it could surpass Indian apparel exports to touch $6 billion by the end of the year 2002.

Currently, Indian apparel exports were hovering around $5.5 billion and have slowed further in the first quarter, the study pointed out. In 2002, China was also expected to cross $60 billion in textile and apparel exports, whereas India with the continual trend would aggregate approximately $13 billion of exports, the study reported.

To instill international competitiveness, the study has emphasised to strengthen intra-industry collaborations from fiber to apparel stage. Large manufacturers should assist the back-end in developing their quality, the study stressed.

This would enable industry to pass on more benefits to the consumer and evolve into a more consumer-centric industry in line with the international practices, according to the study.

For accelerating domestic consumption, the industry needs to focus on the Indian apparel market mainly in the branded category, which was undergoing transition with regard to consumer behaviour and the emerging retail scenario.

The study has also stressed to look beyond premium sectors and focus more on economy and mass segments which have been neglected till today.

Diversification of product mix especially into womenswear and home textiles was also pertinent to stimulate demand, according to the study.

Another significant observation highlighted in the study, was that the demand stimulation attempts of the textile sector have been less aggressive than other industries.

Thus, pushing it down in terms of mind share and purchase priority, it added.

Setting the agenda for the textile industry, the CII-KSA Technopak study, has stressed that to step up the export business the organised sector players need to lead the industry.

Rather than lobbying for sectoral benefits, they should gear up for capturing a macro view of entire industry and initiate linkages with the unorganised sector, the study added.

Addressing the issue of improving economy of scales and efficiencies, the study has called for consolidation on all fronts.

Indian companies should explore possibilities of mergers and acquisitions to strengthen their initiatives in the areas of product development, business development and international market access.

Indian corporates should plan off-shore forays to strengthen their share in the global textile market. Indian companies should create bases in regions that offer cost competitiveness, proximity to markets, tariff exemptions and preferential treatments and quota benefits.

Some of the regions highlighted in the presentation include, North Africa, Latin America, South East Asia among others.

Money

Business News

Tell us what you think of this report