A shot in the arm

A shot in the arm

With the unveiling of 207 HSN Codes for the technical textile industry in India, the Government has convincingly conveyed its seriousness to promote this industry in a big way.

With the unveiling of 207 HSN Codes for the technical textile industry in India, the Government has convincingly conveyed its seriousness to promote this industry in a big way. More boosters like uniform standards, mandatory rules in utilities to promote products usage and incentives for producers may not be far off, finds an Exclusive Report of the ITJ.

It came as a huge surprise to the observers and players in the textile industry, when at a recent curtain-raiser event for Technotex in Mumbai, the Minister of Textiles, Smriti Zubin Irani unveiled
the first lot of 207 HSN codes (the entire list is given on page 41) for technical textiles in India. It was a happy departure from the usual debates and discussions, crowding such events as in the past. It also reconfirmed the Government’s resolve to pay closer attention to
and get down to business in the technical textiles,
which is the talk of the nation’s textile industry in the last one decade.

To monitor the data of import and export and in
order to provide any fiscal support to the technical
textile sector, the first step was to recognise and notify separately the technical textiles items spread from chapter 1 to 99 of HSN classification book. In absence
of clear classification of technical textiles, there was confusion and many genuine manufactures were not getting various incentives being allowed to technical textile sector by Central and State Governments.
To fulfill the long-standing demand of industry to
declare technical textile items as separate category,
the Government has notified 207 HSN codes as
technical textiles.

The technical textiles industry is projected to grow
at 20 per cent year-on-year and the segment’s potential
is largely untapped. Everyone in the industry sees
huge growth potential for the technical textile industry in India. With 12 segments of technical textiles and
a market size of Rs 1,16,000 crore, it is projected to
grow 20 per cent per annum. India accounts for
just 3 per cent of global technical textile production.
As compared to countries like Germany where technical textile contributes 50-60 per cent, in India, the contribution is only 12 per cent.

The Government has also made a special focus on technical textiles and has announced various flagship schemes and the industry leaders, who find its future promising, want to pass on the benefits to the consumers.

While introducing the HSN codes, the Textile Minister said, “we have dedicated to the nation 207 HSN codes for technical textiles. I see
this as a function of unleashing the potential of not only technical textiles but also of an industry, which impacts both our farm life and our space pursuits. This decision alone can enable the sector to grow to a market size of 2 lakh crore rupees by 2020-2021.” Stating that the notification is a milestone, which is significant for the industry, the Minister thanked the industry who have guided and inspired the Government in this initiative.

This step will give a major boost to the technical textile sector in India and it is expected that this step
of Government will act as a catalyst for achieving the market size of technical textiles up to Rs 2 lakh crore
by 2020-21.

Member, NITI Aayog,
Dr VK Saraswat said that the standardisation of technical textiles products is important and notification of HSN codes for these items was a major step in that direction. He emphasised that we need to encourage indigenous manufacturing of technical textiles and also check the import of sub-standard items.

Terming it as a welcome step,
and adding hopefully that this is
just a beginning, Pramod Khosla, Chairman and Managing Director
of Khosla Profil Pvt Ltd, said:
“For the past five years as Chairman of ITTA (Indian Technical Textile Association), we had been relentlessly following for the separate HSN codes for technical textiles. It is therefore very heartening to see the dream come true finally. Needless to add that for the first time identity of technical textiles finally got established independently from normal textiles.”

Said Khosla: “There is a huge potential to be
unlocked in technical textiles for Indian technical
textiles manufacturers. This is for both Indian market
as well as Export market with the establishment of separate HSN code for technical textiles. The sectors specially which are aligned with Indian economy like agro, geo, medical, mobiltech, indutech, etc. shall be
the greatest beneficiaries.”

Khosla opined that the next important job is to pursue the Government – both Ministry of Textiles (MoT) and Ministry of Commerce (MOC) for giving special focus on preferential import duties for technical textiles raw materials and establishing its manufacturing in India simultaneously.” His other suggestions included preferential benefits for exports of technical textiles;
FTA Agreements for technical textiles with EU and South American countries; encouragement to technical textiles machinery manufacturing industry in India, and; incentives for participation in technical textiles international fairs/exhibitions.

Thanking the Government of India for notifying 207 HSN codes
as technical textiles, Sanjay Jain, Chairman, Confederation of Indian Textile Industry (CITI) affirmed that it was a long-standing demand by the industry and
this step will give a major boost to the technical textiles sector, which is considered as the sunrise sector.

Jain pointed out that technical textiles provides new opportunities to the Indian textile industry to have long term sustainable future. “They are not limited to Chapters 50 to 63 of HSN Codes pertaining to conventional textiles, but are covered under the HSN Codes spread over Chapter 1 to 99. In order to compile the data on export and import and also provide fiscal support, it was necessary to identify the HSN Codes of
all the technical textile items.” He further stated that the absence of clear classification of Technical textiles was creating confusion and many genuine manufacturers were not getting various incentives and subsidies being allowed to technical textiles. This was impacting investment in the fast growing and sunrise segment of Textiles. Jain is confident that this policy intervention
will help the industry to invest increasingly in this sector and enable the growth of the Indian textile industry.

The CITI Chairman also elaborated that technical textiles are very significant for the growth of the textile Industry as they are value-added textile products that
are manufactured primarily for technical performance and multi-functional properties with less intent on aesthetics and design.

Jain opined that there is an immense opportunity in technical textiles sector. As per the Baseline Survey of Technical Textile Industry carried out by Ministry of Textiles, the technical textiles industry in India was estimated at Rs 1,16,217 crore in 2017-18. It is estimated that the domestic market is likely to reach at Rs 2,00,823 crore by 2020-21 with CAGR of 20 per cent. The demand for this sector is rising due to many factors including rapid urbanisation, advances in medical technology, expansion in construction sectors, awareness on
safety and environmentalism and increased spending
on healthcare.

However, he said that India still has a long way to
go as it currently lacks the ability to domestically fulfil the rising demand and to be globally competitive in this sector. There is untapped potential both in exports and domestic market of technical textiles. Jain said that to make Indian technical textiles Industry globally competitive, dual policy needs to be adopted for exports as well as domestic markets. A proactive approach from Government as well as industry stakeholders will be
the key for Indian technical textiles to realise its full potential. One of the key steps that may be taken by
the Government is to establish regulatory norms for mandatory usage of technical textile items in specific industries to increase consumption. Apart from that, focus on bringing foreign direct investment in order
to get the requisite technical know-how and expertise would be crucial.

Nikhil Meswani, Executive Director of Reliance Industries, said that the technical textile industry alone will be around $165 billion globally and it will grow to $220 billion by 2020 at a growth rate of
6 per cent, which is double of the regular polyester graph. He added,
“If you look at the technical textile industry in India, it is around $15 -16 billion and has
the potential to grow to $24 billion at the growth rate
of nearly 20 per cent.”

Meswani felt that this has the potential to create
over 15 lakh jobs, which is solving over 10 per cent of
the country’s job creation problems. “This will bring
back technical textile industry to the forefront,” he said.

“The fourth industrial revolution is going to create more value then the previous three revolutions put together, and the background of which is innovation,” said Meswani.

“Now with the introduction
of HSN codes, a lot of State Governments will formalise their policies”, said Raghvendra Singh, Secretary, Ministry of Textiles. He said, “Technical textiles is present in each and every sector. We are actually in the process of mandating rules and regulations, which will help all the products in the sector immensely.”

Singh said that the government is taking a number
of steps for the technical textiles sector; the sector is given importance at the highest level. There are many more measures in the offing, such as giving weightage
to technical textiles in government tenders.

“We have also initiated a baseline survey. A survey
of this kind was done some years back and had become outdated. With this baseline survey, it will give us
a reality check,” added Singh.

Dipali Goenka, CEO & Joint Managing Director, Welspun India, one of the leaders in technical textiles, felt that recent declaration of HSN codes for technical textile products will give a boost to the sunrise sector.

“Currently, the designated market for technical textile is around $50 billion, growing at a strong rate of
12 per cent. Despite achieving a high growth rate, the per capita consumption of technical textile in India is very low as compared to its competing countries,” she said.

Goenka, who highlighted the potential of technical textiles in India, said that India continues to be a bright spot in the world and is estimated to become the third largest economy by 2030. She said it can leverage its strength in fibres and yarns for the growth of technical textiles sector.

Added Goenka, “Technical textiles, driven by innovation, will find its application in many industries, from FMCG to automation to defense. This has opened millions of opportunities in composites.”

Rashesh Shah, Immediate Past President, FICCI and Chairman & CEO, Edelweiss Group, said that
the focus on technical textiles by Government compliments well with the Prime Minister’s vision of New India where we are looking at the development of next generation infrastructure. Shah thanked the Textiles Minister for notifying HSN Codes for the 207 technical textiles items; he said
it would help in giving due recognition to the sector.

Said Shah, “For India’s development in the last few years in the field of construction, railways, telecom, communications, infrastructure, etc., technical textile will play a crucial role in all these sectors. It will create a lot
of jobs for the country. India today is in the top 10 FDI destinations. We have a truly competitive global environment. We have a vast pool of quality and well-experienced engineers. The technical textile sector has to tap those.”

Said Siddharth Kusumgar, Managing Director, Kusumgar Corporates: “HSN code number is an internationally adopted commodity description and coding system.
This code is used by more than
200 countries as a basis of custom’s tariffs, GST etc. 207 products adopted from HSN codes classified as technical textiles will help both Central and State Governments to provide fiscal and other benefits to technical textile manufacturers.

Talking of his company, which is one of the pioneers in technical textiles, launched by Yogesh Kusumgar, his father, Siddharth said: “We are importing and exporting technical textiles based on existing HSN codes; so far we don’t have any problem. But there are grey areas that can be solved by using these codes. In this connection we
feel that more products may be included in the list.”

While conveying his suggestions for the improvement of technical textile industry, Kusumgar said: “There is
a need to not only to produce technical textiles but to produce end products since the country is marching to produce helicopters and aircrafts in the country and the country will have to produce emergency slides, runners and many more products based on technical textile.
Same is applicable when we talk about bullet trains or trains having speed of more than 200 km per hour.”

Kusumgar was firm about the application of mandatory rules in the use of technical textiles. “The Government should use the following application for the growth Technical Textiles, including mandatory use of fire retardant fabrics in public places; amending the factory norms
to provide adequate protective clothing to the workers,
and the mandatory use of airbags for all vehicles.”

He summarised: “The call of the day is to create awareness amongst the users’ segments for the growth and consumption of technical textiles that can replace conventional technology and materials and products
so produced can perform better with cost advantages.”

The job-giving potential of the technical textiles sector is huge; every Rs 1 crore investment generates 70 jobs, according to the Minister of Textiles Smriti Irani. She said that this will lead to growth in sectors such as research, facilities such as testing laboratories as well. Partnership between agrotech companies and Krishi Vigyan Kendras can be very impactful, noted the Minister. She cited a McKinsey Global Institute report, according to which application of agricultural technologies can help close to 90 million farmers by 2025.

Speaking on the historic initiative of Ayushman Bharat, the Textiles Minister said that the government
is poised to unleash close to 1.5 lakh health and
wellness centres across the country. These will be in
need of medical textiles. Given standardisation and
need for quality control, our domestic manufacturers
can compete and contribute to the meditech segment, said the Minister.

Underlining the steps taken by the Government for promotion of technical textiles, the Textiles Minister said that 530 prototype samples in technical textiles have already been developed within the sphere of the Ministry in the past four years; 8 CoEs have been set up at a cost of Rs 140 crore; 22,000 Indians have been trained in technical textiles in the past three to four years;
11 incubation centres have been set up; 40 geotextile projects for roads, water reservoirs and slope stabilisation have been undertaken; steps have been taken to ensure that farmers embrace agrotech through demonstrations at 54 agrotech demonstration centres; and kits have been distributed kits on using agrotech.

The Minister informed that a committee has been constituted to give recommendations for R&D plan for the future growth of the technical textile industry and specifically for preparing a way forward for high performance speciality fibres in India. Noting that imported specialty fibres is one of our biggest challenges, Irani said that India is well-poised to ensure that the technology is affordable, we being the affordable innovators of the world. She said that steps like this can help us go beyond the Rs 2 lakh crore target for the sector.

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