Indias increasing imports of looms from China is an interesting trend", says Kanti Prakash Brahma, Senior Consultant, Fashion-Textile & Apparel at Technopak Advisors.
Excerpts from his informal talk to the Editor of ITJ.
"As we know, India continues to depend on imports for its requirement of hi-tech shuttleless looms owing to the relatively underdeveloped indigenous weaving machine manufacturing segment. Out of the number of looms imported by India from China in 2012, 85 per cent were shuttleless looms of more than 30 cm width. The share of China in Indias imports of shuttleless looms was 28 per cent in value terms in 2012, which is much higher compared to a corresponding share of 10 per cent in 2007. In the period-2007 to 2012-Indias total import value of Chinese looms have increased at a year-on-year growth rate of 30 per cent. The trend has also continued in 2013. However, a large share (70-80 per cent) of the number of machines imported by India from China comes from second hand used machines."
"The Chinese machines, even the new ones, are generally less productive and consume more power compared to the machines imported from European or Japanese manufacturers. However, the players in Indian powerloom sector still prefer the Chinese machines because of their relatively low cost.
It is expected that the trend of imports of Chinese machines, both fresh and second hand, will continue in the short to medium term. Lack of domestic production of looms and too high cost of looms manufactured in China and Japan makes Chinese looms attractive to the decentralised powerloom sector."
"At present, under the Revised Restructures TUFS scheme, the Government of India provides six per cent interest reimbursement and 15 per cent capital subsidy or 30 per cent margin money subsidy on brand new shuttleless looms, and only 2 per cent interest reimbursement or 8 per cent margin money subsidy on second hand imported shuttleless looms with 10 years vintage and with a residual life of minimum 10 years. India government plans to conduct periodic reviews of the extent of subsidy on import of second hand shuttleless looms in tandem with the progress in indigenous manufacturing of shuttleless looms. But it will take several years for the indigenous weaving machine manufacturing segment to come to a level where they can meet the shuttleless loom requirements of the Indian manufacturers as the import content of machine components for any high-end loom currently is as high as 40-50 per cent. Therefore, Indian powerloom players will continue to explore scopes of machines imports from China in short to medium term."