Global competitiveness through legal software

Rudimentary requirement for any textile manufacturer-exporter, and who is a part of the international market must legalise the ownership of the hardware and software IT, cautions Prerna Sharma.

One of the most vibrant industries in India, the textile and apparel industry at both domestic and export level, is estimated to grow at 9.5 per cent CAGR and is expected to touch $223 billion by 2021 in comparison to $89 billion the previous year. Today, prior to the recession, strengthening of the value chain with increased investments on capacity building and technological advancements seems to be the next step for varied sectors including weaving and processing segments en route rapid development. Rapid innovation and technology upgradation, introduction of Fund Schemes and removal of excise duty, has given a major boost to the textile industry.

The Indian Textile Industrys growth opportunities

The abundant availability of raw material has made the Indian Textile Industry relatively more competitive in the international market, thus reliance on imports is almost negligible. High operational efficiencies in spinning and the weaving sector is of great advantage for the Indian Textile Industry, whereas operational efficiencies in the apparel Industry has not made much progress in recent years. Low cost labour and excellent design capabilities have helped tremendously in giving better operational efficiencies. The industry also has an extemporised its manufacturing capabilities and has a well-diversified product base which has helped it in emerging as an important global player.

Traditionally, US has been a prominent market for India, the export to the US from India across various sectors has increased from USD 5014.48 million in 1995 to USD 19493 million by the end of 2010. Indian products form about 4 per cent of the total textile products imported into the US. The annual increase of 3 – 4 percentage from 2007-11 in the imports to US, suggests that there is a tremendous growing potential for India to capitalise on. The market share today of Indias Textile Industry exports is considerably less, in spite of growing competition from major exporting countries like China, Bangladesh, Vietnam and Thailand. The unrealistic expectations of rapid growth in the international market might change soon with the coming in of Unfair Competition Act and other similar compliance laws aiming at fair competition.

Zero Tolerance against Unfair-Competition

Against the backdrop of the latest US Laws against unfair competition and the subsequent enforcement action taken by a US lawmaker against an Indian company allegedly using pirated software in its production process, it has become clear that the competitiveness and the further growth prospects of the Indian textile industry is based on clear compliance on IT front. The prevention of unfair competition is aimed at providing a level playing field for suppliers and manufacturers in the international market and can have major implications on the Indian exports.

The Unfair competition act and other compliance laws have come recently into play in the United States of America; it aims at eliminating undue cost advantage taken by the manufacturer employing illegal IT in its production process in collation to the manufacturer who does employ legal IT. This law allows either the competing manufacturer or the respective State Attorney Generals to commence civil proceedings against the manufacturer who do not comply with the law. If the alleged charges are proven, the manufacturer may have to face injunction against sale of his/ her products in the US. Currently, 39 states in the US have taken up the resolution to fight against unfair trade practices in manufacturing by preventing usage of illegal or stolen IT. The rationale behind the act