Declining yarn exports have put the Indian textile industry in crisis mode.
But is this a short- or long-term crisis? A telephone conversation with two Indian textile industry professionals painted a clear picture.
The Indian textile industry is strong in the spinning sector, which has been heavily dependent on exports. “The yarn market is dull,” stated Subbiah Krishnamoorthy, general manager of Vaibhav Ginning and Spinning Mills, Pvt. Ltd., a spinning mill with 26,000 spindles located in a cotton growing area in Gujarat, India. “China and Bangladesh are not buying yarns, and the prices are low,” he added.
“China is the major market for Indian yarns, and the trade war between the United States and China has affected the Chinese textile sector,” said Krishnasamy Gandhiraj, general manager with Lakshmi Card Clothing Company. The Indian textile sector has been heavily spinning-based, and this is the problem, he added.
While touring the cotton producing regions in Gujarat state – the number one cotton producing state in India – Gandhiraj said, “This year’s crop will be of good quality due to rains. Yield will be high and, due to good quality, yarn realization will also be high.”
“Ginning will begin soon after Diwali, the prominent festival in India, and harvest in some areas in Gujarat will begin in 20-25 days,” stated Krishnamoorthy. His mill normally supplies both export and domestic markets and is feeling the pinch in export shipments.
The state of Gujarat has ramped up its spinning capacity since 2012, due to the state’s supportive programs such as power and interest subsidies. Currently, the state has about 3.5 million ring spindles and proximity to cotton – a positive aspect.
Upstream industries such as garmenting and finishing do not have the necessary capacity to cater to big markets. There is still demand for value-added products to markets like the United States which cannot be currently handled by the Indian textile sector, opined Gandhiraj. A structural shift is needed to focus on building value-added sectors such as garments and technical textiles.
Given the slump in the textile sector, will there be confidence in building other sectors in the textile industry? For long-term viability, the goal should be to diversify and build the upstream sectors. Here again, the Indian industry should enhance its product offerings. Recently, Aruppukottai-based textile industry has worked with me and Chennai-based WellGro United, to develop a value-added product Towelie, which has attracted export markets catering to the oil and gas industries.
Diversification, working with marketing channels and looking for opportunities beyond traditional markets are needed. It is time to start planning towards attaining these goals. This should be the strategy moving forward!
Dr. Seshadri Ramkumar is a professor in the Department of Environmental Toxicology and The Institute of Environmental and Human Health at Texas Tech University, and a frequent contributor to Cotton Grower.
Source: Cotton Grower