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Economy

India looks to technical textiles as $17bn 'sunrise sector'

Nation aims to boost sector's manufacturing, export earnings in 'Make-in-India' initiative

Technotex 2017, an international conference on technical textiles, will take place in Mumbai in April. (Photo by Kiran Sharma)

NEW DELHI -- The Indian government is vigorously promoting its technical textiles industry.

With measures such as tax concessions, special financial packages and allowing 100% foreign direct investment, the government is hoping to boost the "sunrise sector," which is projected to grow to 1.16 trillion rupees ($17 billion) by March next year from 736.8 billion rupees in 2014.

Technical textiles are engineered fabrics with specialty fibers and functionality. They are used in sectors such as autos (seat belts, air bag and tire cord fabrics, upholstery); agriculture (greenhouse and crop covers, mulch mats, ground water management shade nets); healthcare (surgical cloth, bandages, extracorporeal devices like artificial kidneys and lungs, soft tissue implants); sports (parachutes, artificial turf); and construction (hoardings, scaffolding nets, tarpaulins).

Overall, the country's textiles industry is worth $108 billion and is expected to reach $223 billion by 2021. It contributes over 14% to India's industrial production, 5% to GDP and 11% to exports earnings, and employs over 45 million people directly and 60 million indirectly. From March 2014 to March 2016, the FDI equity inflows in the textiles sector totaled $427.55 million, according to the "Textiles & Apparel Sector Achievements Report" released in November.

However, there is a lack of awareness about the technical textiles segment among prospective entrepreneurs and consumers, especially those in the agriculture sector. High-technology textile products are especially useful for farmers to avoid crop wastage and reduce the use of pesticides, among other benefits.

The application of technical textiles in agriculture sector "has led to increased productivity and increased income generation for our farmers," India's Textiles Minister Smriti Irani said here on Tuesday. There is potential in India to expand the use of agricultural technology and "the need of the hour is conversion of efforts," she said. 

She was speaking at a curtain raiser event of Technotex 2017, the 6th International Exhibition and Conference on Technical Textiles in Mumbai April 12-14. It is being jointly organized by the Ministry of Textiles and the Federation of Indian Chambers of Commerce and Industry.

The theme of the three-day event is "Advantage India -- Emerging Global Manufacturing Hub for Technical Textiles," and it aims to provide innovative solutions, identify new business opportunities and create an environment congenial for growth.

Players

Reliance Industries is the single largest supplier of fiberfill-based technical textiles in India, catering to over 50% of the market. In addition, it has its own line of mattresses and pillows under its Recron brand, and has diversified into other technical textile areas, including high tenacity polyester and industrial rope, and agro-based polypropylene netting.

Reliance is "benefiting from continuous value addition and branding efforts," according to a baseline survey of the technical textile industry in India.

Other prominent companies in the field include Arvind (fire retardant fabrics, apparel); Nobel Hygiene (adult/incontinence diapers); Ginni Filaments (non-woven spunlace, home and medical wipes); Gujarat Raffia Industries (tents, shelters, pond and canal linings); and SRF (nylon and polyester tire cord, breathable laminated fabrics, coated flex fabrics).

Schemes

To facilitate higher integration of technology into manufacturing processes and end products, the Indian government allows up to 100% foreign direct investment under automatic routes without prior approval of the authorities in the sector. Several global technical textile manufacturers such as Ahlstrom, Johnson & Johnson, DuPont, Procter & Gamble, 3M, SKAPS, Kimberly Clark, Terram, Maccaferri and Strata Geosystems have begun operations in India.

Other programs launched by the government include establishing centers of excellence for research into technical textiles; decreasing the customs duty from 5% to 2.5% on select high-performance specialty fibers or raw materials; and a 15% subsidy on capital investment subject to a ceiling of 300 million rupees for entrepreneurs over a period of five years.

The government has also extended an outlay of 4.27 billion rupees to promote geotechnical textiles in its remote northeastern region for use in infrastructure such as roads, hill slope protection and efficient water usage via reservoir linings.

India's textiles industry has contributed enormously to the country's growth since its independence from British rule in August 1947. The 1991 economic reforms that liberalized investment and trade accelerated the growth of the industry. India is the largest producer of jute in the world and is the second largest producer of silk and cotton.

The government last year approved a special 60 billion rupee package for textiles sector with the aim of creating 10 million jobs in the next three years and giving a boost to exports.

Major technical textile products produced in India are woven sacks, tire cord fabrics, sport shoe components, narrow elastic strips and fishing nets. India accounts for only 3% of technical textile production globally, while China and Europe "are the leading manufacturers," with over 75% production, according to Kavita Gupta, the country's textile commissioner.

India's global exports of technical textiles is just 4%, and imports stand at 3%. The country, which has only 2,200 technical textiles units, is expecting "larger investments through joint ventures and other opportunities to have an expansion in this sector in India," Gupta said.

Internationally, most of these high-technology products are used as Mobiltech textiles for seat belts, air bags, automotive upholstery, etc., while in India it's predominantly woven fabrics and non-woven polyester materials. Gupta said the government wants to encourage the use of technical textiles in areas such as automotive and medical textiles.

"Technical textiles have emerged as one of the most innovative sectors, with their ever widening applications in view of growing industrialization worldwide," Alka Panda, director general of the Bureau of Indian Standards, said.

Despite the high growth rate, per capita consumption of technical textiles in India is only 1.7kg, compared to 10-12kg in developed countries. Globally, this segment makes up about 27% of the textiles industry -- in some Western countries its share is as high as 50% -- while in India it is a meager 11%.

However, Panda observed that technical textiles have found a place in "Make-in-India" initiative aimed at turning the country into a manufacturing hub. "India enjoys comparative advantage in terms of skilled manpower and low cost of production over major textile producers worldwide and can attract potential investors," she said, adding that changing technology and increasing demand for quality products are set to fuel demand for high standards for this sector.

To boost the standardization of technical textiles on a fast-track basis, BIS has set up separate specialized sections and committees for areas such as agricultural, industrial, geo and medical textiles.

Challenges 

According to the "2016 Technical Textiles Top Markets Report" by the U.S. Department of Commerce's International Trade Administration, the competitive advantage India had in terms of low labor costs "has been eroding slowly" due to competition from countries like Bangladesh and Vietnam that offer a skilled and cheaper workforce.

High energy and transportation costs, as well as obsolete labor laws, are some of the reasons India is shifting its focus from traditional textile manufacturing to technical textiles. "India's shift to focus on the development and production of technical textiles cannot be done with just monetary and tax incentives alone," the report says. "In order to successfully compete globally in technical textiles, there needs to be investment from the private sector."

However, it notes that entrepreneurs are reluctant to invest in the sector as marketing of technical textiles is more complex than with conventional textiles. In addition, specific raw materials, machinery and manufacturing equipment are not readily available in India, and importing these products is expensive. Besides, the sector is still in its infancy, and will take at least five years before entrepreneurs could see a return on their investment.

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