Dear Friends, the economies of the world and India in particular continue to suffer due to the unprecedented Covid-19 Pandemic hit. The prolonged lockdown compliance is greatly affecting the routine life, manufacturing, business activities and the financial performance of the textiles and clothing industry. Though most of the textiles units started operations, the demand is sluggish due to the closure of retails and shops. However, Government under the leadership of Hon’ble Prime Minister has been taking series of remedial measures to mitigate the worst ever crisis and achieve Atmanirbhar Bharat – a Self-reliant India. The historical reforms brought by the Government for the MSME sectors, especially the criteria for MSME eligibility, linking investment value to ITR, exempting export turnover, etc., have prevented closure of several lakhs of units and job losses for millions of people.
The encouragement given by the Government especially Hon’ble Union Minister of Textiles has enabled the country to become second largest manufacturer of PPE manufacturing in just less than two months and today has become a net exporter. I am happy to inform you that the Government is set to launch the Focused Product Investment Scheme to attract investments in the Manmade fibre segment and is in the advanced stage of finalising setting up of integrated mega textile parks and creating national textile fund that would enable us to improve our global competitiveness.
Though the MSME financial relief measures and export benefits have greatly benefitted the various segments under this sector, it essential to revive the larger textile units from the financial crisis that support the MSME sector by advising the banks to extend all the benefits already announced by the RBI and also extend one time debt restructuring facility with liberal financial norms. It is also essential to issue clear guidelines for the repayment schedules of the principal and interest accrued during the Covid-19 moratorium period as the banks in general impose their own conditions that would cause great hardship to the ailing industry.
CITI has appealed to the RBI Governor to address the issue of liquidity crises of the entire T&A Sector by taking certain measures like directing all the banks to lend 25-30% extra working capital to T&A industries for which Government of India may extend partial guarantee, allowing conversion of part of Working Capital facilities availed by Retail Businesses into Working Capital Term Loan (WCTL) and reassessment of working capital limits, removing NPA classification temporarily for all businesses availing restructuring or refinancing due to the Covid-19 crises.
Friends, Indian Textile Sector is no exception and in fact has been amongst the worst sufferers if it is compared with other sectors of the economy. The export of textiles and allied products during 2019-2020 has stood at USD 34 billion which is 8% lower than the previous year’s figure of USD 37 billion. However, in the same period, imports of textiles have increased by 11%. Similarly, export of cotton yarn has declined by 29% in 2019-20 when compared to the previous year. i.e. USD 2,760 million during 2019-20 as compared to USD 3,895 million during 2018-19. Sharp declines have been recorded in all the major export markets like China (-51%), Bangladesh (-23%), Vietnam (-18.5%) and South Korea (- 28.46%). While, the exports of cotton fabrics and made-ups have increased marginally. In order to obtain global competitiveness and mitigate tariff barriers, we have appealed to the Government to include yarns and fabrics under all the existing export benefits, viz., IES, MEIS and RoSCTL and also under RoDTEP (Refund of Embedded Duties and Taxes).
Recently, CITI organised a series of Webinars like e-conference on “Rebooting the Textile & Apparel Industry” in association with MEX Exhibitions and Messe Frankfurt India and “The Future of the Textile and Apparel Sector – An Indo-African Perspective: Challenges and Opportunities” in association with International Trade Center (ITC), Support of Indian Trade and Investment for Africa Initiative (SITA) and other organisations. The idea was to review the trade scenario during and post Covid-19 Pandemic and discuss how India and other nations can overcome the present challenges and convert them into opportunities and utilise the conditions in their favour.
I could also give my view points for promotion of trade and investment between India and Japan during the “India – Japan Video Conference on Textile Sector – Challenges & Emerging Opportunities” organised by Embassy of Japan. Japan is desperately looking for alternative destinations for re-location of its companies operating from China and India must grab this opportunity. There is a huge opportunity for the textile sector provided India achieve technical knowhow on speciality fibres that is a pre-requisite for the textile products used in Japan. Similarly, there is also a huge scope for Japanese firms in the field of technical textiles as India is one of the fastest growing nations in the world in terms of infrastructure development and looking for a partner who can support India develop its infrastructure at a great pace.
I am very much hopeful that the textile and apparel industry would emerge victorious from the current pandemic crises and very soon become self-reliantin the textile value chain.