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Lack of investment in upstream sectors could hamper apparel export growth

The apparel sector has been identified as the growth engine for the textile industry, post-2004. However, garment exporters complain that the infrastructure to drive growth is still missing. Despite India’s strong textile base, garmenters are increasingly depending on imports. A report by Reena Mital.

Even as the apparel sector has been identified as the growth engine for the textile industry, the sector has been pointing out time and again, the lack of infrastructure, which will severely restrict its growth potential, when opportunities come its way, post-2004.

“Despite India’s strong textile base, exporters still have a problem sourcing the right kind of fabrics from the domestic mills. We have to wait for very long, the quality of fabric we get is not always what we want, the price is not as competitive. This is leading exporters to import fabrics from China, and other countries,” according to Mr Amit Goyal, president, Confederation of Indian Apparel Exporters (CIAE). According to exporters, except for a handful of mills, the Indian weaving and processing sector is still not gearing up to service the apparel export sector.

Speaking to Express Textile, Mr Robert Lobo, CEO, Morarjee Brembana, says, “There is no growth happening in the upstream sectors, which have to provide the inputs to the garment industry. So, what is the basis of so much optimism in the industry about garments driving textile growth. I do not see any clear strategy being worked out in any of the textile sectors as yet, to achieve the growth targets. And there is no clarity on the growth target either, how have we arrived at a textile export target of US$ 50 billion. And now that we’ve arrived at this figure, where is the action?”

According to officials of the Cotton Textiles Export Promotion Council (TEXPROCIL), “The mills are still interested in direct exports of fabrics, rather than servicing the garment exporters, which is a big sector. Even in fabrics, it is still grey that is being exported more. And all this at a time when there are clear indications that global textile and fabric trade will come down, while garment trade will increase. But our textile mills are not yet showing signs of acknowledging these changes.”

This has resulted in garmenters increasingly depending on fabric imports to meet their requirements. “Mills have a lead time of at least 3-4 months, which is too long for the garmenters. And the fabric which comes out is not of the best quality. Importing fabric from China also takes the same amount of time, sometimes even less, the qualities are the same, sometimes better. Over the last two years, my fabric imports have grown 50-60 per cent, and I expect this trend to continue,” says Mr Brij Bang, managing director, Bodywaves, one of the leading textile and fabric importers and supplier to the garment industry.

So, what is it that makes it difficult for Indian mills to cater to the demands of the garment export sector? Says Mr Arvind Poddar, managing director, Siyaram Silk Mills, “In case of certain varieties like polyester-viscose, there is no problem, and garmenters can get the required quantities at any given time, they just need to tie up with some of the good manufacturers. There is a problem in polyester-cotton where the qualities are not as good as what is available from China. As a whole, the problem between the mills and garment exporters is mainly on deliveries. The exporters want the fabric yesterday, and the mills are still working in their old ways, their supply schedules are too long. The communication and synergies have to improve. There has to be better organisation between the two sectors.”

Concurs Mr Rajiv Dayal, CEO, Mafatlal Burlington, which has begun concentrating increasingly on the demands of the garment exporters, “The problem of fabric availability arises when there is lack of organisation. There is need for an integrated chain, which includes the fabric supplier, the garmenter and the buyer. While till two years back, this was a fairly slow process, today, the integrated chain is buyer-driven. And this is especially so in case of the really large, well organised garment exporters who are supplying to the big brands. Here, the suppliers and buyers work in long term programmes, so all is well organised. And if a fabric supplier cannot meet any of the standards of the programme, he will have to risk losing that programme. In this kind of an integrated set-up, the fabric supplier will not have a lead time of more than 45 days, and on-the-spot orders for samplings are also met efficiently. However, there is still a lot of integration that is to be done, and mills have to get competitive.” He further stated, “The input problems are faced more by the small scale manufacturers, who source from the powerlooms, which could falter on quality and deliveries.”

According to Mr D K Nair, secretary general, Indian Cotton Mills’ Federation, “The low quality fabric is the result of the large disorganised and fragmented sector. Majority of fabric manufacturers consist of tiny small units (with a few medium units) which use outdated technology so they are not efficient. The share of shuttleless looms in India is only three per cent as against 30 per cent at the global level. This has deprived garment producers of quality fabric. There are only a handful of large manufacturers in the organsied sector (3.5 per cent) such as Bhilwara, Ashima, Vardhman, etc, who produce high quality fabrics. But this is not sufficient to increase garment exports.”

According to Mr M P Gajaria, former secretary general, ICMF, “The mill sector, which is facing stiff competition from powerlooms and imports, has to realise that they need to offer competitive products to survive in the market. The domestic and export garment sectors can be a big market for the mills. And if they do not get competitive, they will have to lose out on the business. I have, time and again, stated that the Indian mill sector has a very inward looking attitude, which has over the years, put forward a number of reasons for not servicing this sector. But these according to me are mere excuses. We talk of India’s huge textile base as an advantage for the country, post-2004. However, even after so many years, there is no synergy between the various sectors of the industry. Each continues to work in isolation.”

According to industry experts, “This is unfortunate as the Indian industry has the knowledge, capability and strength to develop products, gauge and understand international trends, provide the right kind of service to the garmenters, but is not doing much of this.”

(With inputs from Sapna Dogra, New Delhi)