'Extension of interest subvention for garment sector by April'

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Namrata Kath Hazarika | 30 Mar, 2010
The extension of two percent interest subvention to the garment sector should be given by April 2010, said Shishir Jaipuria, Chairman of Confederation of Indian Textile Industry (CITI) in an exclusive interview to SME Times.

Excerpts of the interview...

Extending two percent interest subvention to the garment sector is major issue of discussion amongst textile industry. What is your take on this?
Shishir Jaipuria: At this front, we on behalf of Confederation of Indian Textile Industry (CITI), which is the contributor of Indian Textile Industry have taken this request to both the textile and the commerce ministry. The textile ministry have already requested the finance ministry that interest subvention of 2 percent needs to be extended to the textile & clothing sector. The textile ministry has already sent the request to the finance ministry but nothing has been done yet. I think very soon some initiatives will be taken by the government. It has to be done immediately and the extension should be given by April 2010 for the survival of the industry.

The Indian textile industry, yet to recover from the impact of recession, is making a desperate bid to grab a share of the growing textile markets in Latin America. What is your opinion?
Shishir Jaipuria: The Indian textile & clothing industry is presently looking at the alternative markets and Latin America is one of them. It is a focused area as of now. Our major markets are Japan and Europe but as of now demand is coming from all over the world. In fact, China and Bangladesh are few of them from where demand is flowing into the country. However, China is a big importer of Indian textile products. They usually purchase cotton yarn from India.

Is China giving Indian textiles a tough competition in the global market?
Shishir Jaipuria: China is a big importers of raw materials from India and not finished garments. Yes, it gives us tough competition as China's global share in textile &clothing is 40 percent and India's share is 4 percent.

China usually manufactures garments in their country by importing the raw materials from India and export to major destinations like US, Europe and Japan. China has a large volume of share in the global market but India's global share is less. India has lots of scope for extending share in the global market but there should be demand for Indian products globally.

Is the impact of recession over in textile industry?
Shishir Jaipuria: The global demand last year was hit badly by the downfall which we have witnessed due to the US and European crisis. The global demand is increasing eventually from all over the world whether it is Europe, US or the Latin American countries. As we know that last year due to recessionary pressures there have been a lower base volume, the demand has fallen. We were in to difficult times. But as I have seen the exports figures recently, the textile industry is up by 30-40 and the garment is up by 35 per cent, which is a good move.

Ginni Filaments has excelled in the technical textile industry. Could you tell our readers the scope India has in technical textiles area?
Shishir Jaipuria: Our technical textile industry is growing eventually. At present, Ginni Filaments exports have reached up to Rs. 120 crores till March 2010. The technical textile industry is a growing market in India and has enormous potential for growth.

The need of the hour is to create demand for technical textile products in the potential market. It is requisite to reform the government policy and regulations. In fact, the technical textile industry, India's contribution is very less. India can improve its share in the global market but it will take time. Technical textile has lots of scope in the potential market. India can expand its reach in the domestic market at first and then can become giants in the global export trade.

Moreover, the government has to look to make mandatory rule and regulations for this area to excel in future. For instance, Geo-textile has lots of scope in India for roads. So this area should be given focused attention by the government. In the export front, it is sometime difficult to export these kind of bulky items through transport. And, I do not think technical textile will jump to higher level of growth all of sudden.

Can we reach the share US, China and Europe has at present in the world?
Shishir Jaipuria: I don't think we can do extreme in this area immediately but yes there is scope for growth. Hopefully we will increase our share eventually.

It is informed from the sources that garment makers have planned to increase their prices which will impact the consumers, as retailers have also planned to hike the retail price. Is that true?
Shishir Jaipuria: Yes, the fabric prices have increased tremendously due to hike in price of yarn and cotton. We are totally against the registration of cotton exports from the country. We want the government should look in to the matter immediately. Everybody is trying to increase the garment prices as yarn and fabric prices have increased by 40 per cent and however the garment price has thereby got hiked by 20 -25 per cent.

It might happen that the retailers could probably increase their prices but actually they need to reduce their margins. The big retailers such as Walmart, Gap, etc may not charge higher price to the consumers but should probably reduce their profit margins.

If suppose they increase their prices there might be a demand fall, which should not happen. Look, if one has to be in business then they have to bear the costs. It is in that way one can stay in business by making understanding.