Textile Industry Needs Structural Adjustments: SIMA

Indian textile industry needs more structural adjustments, both internal and external, to make it more vibrant and competitive.

"The emenating signals indicated that the textile industry is back in the reckoning and the syndrome of a sun set industry is being put into oblivion. In my view, the condition appears to be favourable for the Indian textiles to further consolidate. Also the global trade sentiments hint at a possible tilt towards India and this should auger well for us to emerge triumphant in the post 2004 scenario," Mr VS Velayutham, chairman of South India Mills Association (SIMA) said.

He told the 44th annual general meeting of SIMA in Coimbatore on Thursday that to survive in the fiercely competitive free market place, the Indian textiles need to be benchmarked with its competitors.

"Currently, the Indian cotton textile industry is at a disadvantage as the key cost components like raw material, power, labour and interest rates are heavily loaded against us. This more than adequately captures the predicament of the cotton textile industry," he said.

The cotton textile industry has lost the traditional advantage of domestic cotton, he said and added that, "this was one factor which propelled India as a dominant player in the global cotton textile trade. Over the last few years, we have lost this advantage and it is increasingly becoming clear that we may not enjoy this advantage in the future unless and until some drastic measures are initiated to improve the cotton economy."

He hoped the steps like the Technology Mission on Cotton and Integrated Cotton Cultivation (ICC) Programme would improve the situation.

At the state level, the waiver of the market fee for cotton cultivated under ICC should give a fillip to its implementation in Tamil Nadu. Mr Velayutham said the comprehensive textile package would address the high interest rate issue.

He hoped that the contract labour Act and the other labour legislations mooted by the government would address labour-related issues. "I am sure these external adjustment measures will strengthen the industry," he said. "However, for the industry to become a vibrant force, it should also undertake internal adjustments which, in fact, would determine competitiveness at the unit-level. These internal adjustments have to be addressed on a case to case basis and it is time for the managements to rise to the occasion and spin a plan so as to remain bench-marked with the best in the world," Mr Velayutham said.

He said these adjustments and reworkings were timely and rewarding as the textile industry was poised for a take-off. "The year 2002-03 has been one of the better years for the Indian textile industry. An RBI study has confirmed that the textile industry has recovered some lost ground. There are signs of global textile majors eyeing India not only as a sourcing centre but also as an investment destination. The textile scrips which were out of favour has suddenly become favourites and drawing considerable attention,'''' Mr Velayutham said.