TEXTILE & CLOTHING POISED FOR GROWTH IN 2018-19: CITI
New Delhi, Friday, August 24, 2018: Mr. Sanjay Jain, Chairman, Confederation of Indian Textile Industries (CITI) exuded confidence that the worst is over for the Textile & Clothing Industry and it’s finally on the verge of a turnaround. He stated that Indian textile sector is the largest industrial employment provider, employing more than 10 crores people directly and indirectly and a major industry for the economic growth of the country.
Mr. Jain pointed out that with continuous support from the Government with a slew of measures on all fronts there has been increase in exports of textiles and apparel from India. 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 as indicated in the table below:
India’s Textiles & Apparel Exports (Values in Rs crores)
|Cotton Yarn/Fabric./made-ups, Handloom Products etc.
|Man-made Yarn/Fabrics./made-ups etc.
|Jute Mfg. including Floor Covering
|Handicrafts excl. handmade carpet
|Textile and Apparel
Data Source: DGCI&S
Mr. Sanjay Jain also stated that overall growth in exports during Apr-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 as indicated in the table below:
Production of man-made fibre, spun yarn and fabric
|Million sq. mtr
Data Source: Office of Textile Commissioner
Mr. Sanjay Jain pointed out that this year, the imports growth has come down significantly. While the imports of T&C has increased from US$ 1.78 bn in April-June 2017 to US$ 1.87 bn 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.
Mr. Jain also highlighted that as per RBI Financial Stability Report- June 2018, the stressed advance ratio of textile subsector has also improved from 23.7% in September 2017 to 22.3% in March 2018, indicating signs of recovery.
Mr. Jain said that a strong turnaround in Textiles & Clothing Sector is expected due to:
- Scheme for Capacity Building in Textile Sector (SCBTS) named ‘SAMARTH’ of Ministry of Textiles with a huge outlay of Rs 1,300 crores along with other parallel skilling programs 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, making the industry competitive globally and imports dearer.
- Import duty on about 400 items being enhanced, providing 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 has allowed refund of excess ITC to the processing and fabric industry – this has 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.
Mr. Sanjay Jain would like to thank Hon’ble Union Minister of Textiles, Smt Smriti Zubin Irani for her continuous support to the textile and clothing industry in addressing industry’s plea and resolving various issues. He would also like to thank Hon’ble Prime Minister, Hon’ble Union Minister of Finance and all the concerned policy makers and tax administrators including GST Council for successful implementation of GST and addressing various GST related issues.
Mr. Jain also stated that maintenance of a competitive exchange rate is an essential prerequisite in labour intensive manufacturing in mature industries like textiles. The currency management by the Government has benefited the exports and is discouraging imports.
Mr. Jain said that continuous support from the Government is expected to put the industry back on track and we anticipate the textile and apparel exports to grow by 7% while imports to stay flat in this 2018-19.