Indias textiles industry, a major source for the countrys
foreign exchange, will face survival threats once the export
quota regime will be removed, a possibility by the year
2004. The trouble will be further doubled with Chinas entry
into the World Trade Organisation, feel industry analysts.
The abolition of the export quota system will open up immense
opportunities to Indian textile exporters in the international
market, but the improper marketing strategy and an outdated
technology will be a severe threat to the Indian textile
sector, they say.
constitute 35 per cent of Indias exports, valued at $10.5
billion in 1999-2000 (April-March). The country accounts
for 21 per cent of the worlds spindles and 15 per cent
of the worlds cotton production, but its share of the worlds
textile exports is just 2.8 per cent. Twenty-five per cent
of the textile exports go directly to the US and a large
chunk of yarn, which is sold to other nations, get routed
to the US in the form of garments.
Verticalnet CEO Sushil Tibrewal, the promoter of www.garmentjunction.com,
a B2B portal for international marketing of textile and
consulting services: "Once the quota policy comes to
an end the quality at a fixed price will be the mainstay
of the export industry. The present quota policy only helps
a few major players, whereas smaller players, who produce
better quality textiles, will face a threat because they
are unorganised and have no international marketing strategy."
Post-2004, he says, the international market will be wide
open to those who stand for quality products at a reasonable
price. "The situation will demand more regrouping,
rethinking and changes in the market strategy. The buzzword
will then be more specialisation and more professionalism.
Manufacturers in the subcontinent must also develop the
trend of supplying their orders in time with utmost stress
on the quality of goods."
Industry associations say Indias textile industry is faced
with a barrage of problems, ranging from high interest rates,
labour regulations, power costs and a lack of technology
upgrades. Chinas entry into the WTO will sharpen competition
in the textiles exports sector. Compared to India, China
has lower interest rates and minimum labour problems.
Its strategy is to develop low-cost units to produce large
volumes. Pakistan, South Korea, Sri Lanka and Bangladesh,
too, are emerging as strong competitors to India.
Says Cotton Textiles Export Promotion Council chairman T
Kannan: "The growing competition from low-cost supplying
countries like China, Pakistan and Indonesia and the recession
in the world markets have contributed to the decline in
Indian textile exports."