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Will the sun shine on India’s technical textile sector?

Jan 01, 2021
Will the sun shine on India’s technical textile sector?

The technical textiles industry world over is growing apace. The global technical textile market is expected to grow from $177 billion in 2018 to $220 billion by 2022 with CAGR of 5.8 per cent, as per a textile ministry report. The US occupies leading position for being the largest manufacturer and consumer globally, followed by Europe, China and Japan. India’s share to the world technical textile market is only about 6 per cent.

India might be the world’s second largest producer of textiles and apparels, but it has a lot of ground to uncover in the technical textiles realm. Imports still dominate the Indian technical textiles market. But increasing investments, growing domestic consumption and high-level government interventions hold the potential to change the tides for the Indian technical textiles.

Status quo of the Indian market

The demand for technical textiles is led by the development of large-scale industrialisation especially in developing countries like India. This is a huge factor responsible for the growth of this industry. Besides this, increasing disposable incomes, growing end-user industries like automobile, meditech, and infrastructure, increasing awareness about hygiene and sanitation, and consistently growing government support make the market for technical textiles extremely conducive.

According to Michael Jaenecke, Director, Technical Textiles & Textile Processing, Messe Frankfurt Exhibition, said, “Gujarat is a key player with 800 technical textile units and a contribution of more than 25 per cent to the national technical textile business. In terms of meditech, geotech, sportech and nonwovens, Tamil Nadu is a fast growing market and its commitment to development of textile parks in the state dedicated exclusively to technical textile is a further testament to its potential. Apart from that, Maharashtra, Telangana (Warangal textile park) and Punjab hold strong significance due to their individual areas of focus on agrotech, mobitech and protech, defense industries, protech and indutech products.”

The export market is flourishing too and shows plenty scope for improvement. According to a Baseline report, India’s expot of technical textiles for 2018-19 was Rs 14,013 crore. The trade deficit, in this sector, decreased from Rs 1,100 crore (Jan-June) in 2018 to Rs 523 crore in (Jan-June) 2019. Shujaul Rehman, CEO, Garware Technical Fibres, informed that, “We approximately export 55 per cent of our total production. The rest 45 per cent is for the domestic market.”

Speaking on the prevailing market conditions, Rehman, shared,” Despite the economic slump and the overall demand for textiles going down because of the COVID-19 pandemic, the sector remains the second largest employer in India. While the technical textiles industry is at a nascent stage in India, it holds vast potential for growth. With the government’s aim to create world class infrastructure in the country, in addition to the implementation of several policies and schemes to boost the textile sector. In India, the market is estimated at $19 billion, growing at a CAGR of 12 per cent over the past five years. It contributes to about 0.7 per cent to India’s GDP and accounts for approximately 13 per cent of India’s total textile and apparel market. According to the baseline of ministry of textiles survey India’s technical textiles market shows a growth of 20 per cent from $16.6 billion in 2017-18 to $28.7 billion in 2020-21. In terms of exports, in 2018-19, India exported an estimated $1.9 billion of technical textiles, with exports growing at a CAGR of 4 per cent over the past four years.”

Geotech is a booming segment in India. Shedding some light on the propsects of this segment, Rachit Agrawal, Managing Director, Suntech Geotextile, said,” India also has huge potential to adopt technical textile in the water resources sector. The design and construction of water resources with conventional methods use large quantities of natural resources such as aggregate, stones etc. Various parts of India are subjected to flood and environmental degradation is a perennial phenomenon. In these terrains, the flood management and control relies heavily on technical textile tubes, containers and bags. Technical textiles have been found to perform better than concrete as water protection component because of permeability, flexibility and ease of underwater placement. “

The pandemic brought a long list of challenges. The most significant one for the Indian technical textile MSMEs was to meet, not just the domestic, but also a global demand for masks and protectivewear. Jaenecke, in agreement, said,“ This challenging year called for ingenuity on the part of textile sector players worldwide; and from manufacturing zero PPE kits in March, to becoming the second largest manufacturer after China, India has managed to rise to the challenge. Even as global manufacturing came to a grinding halt and ban on exports, with the way the Indian technical textile industry has responded to the critical need for medical equipment (PPEs), I would describe it as innovative, robust and agile.”

Technical textile sectors witnessing growth

From all the 12 major categories of technical textiles, packtech holds a major market share, followed by indutech, mobilitech and hometech, according to a ministry of textiles report. Geotech is predicted to be the fastest among the 12 segments with a CAGR of 30 per cent. The government report declared shade nets, crop covers, baby diapers, sanitary napkins and surgical disposables as products with high-growth potentials in the industry.

Garware shared Agrotech and Geosynthetics segments will witness pickup in demand. The main reasons Rehaman said, “The Indian farming industry is moving gradually but surely toward Protected Cultivation which is in nascent stage .The technology and products used in Protected Cultivation enable better temperature control in the Poly house/Shade nets house and also enhances the yield and quality of the produce which are exported and sold locally at a remunerative price to the farmers.”

He further added, “In case of Geo-synthetics, India is quite far away in the usage of technically superior products as compared to advanced countries. The infrastructure industry is a focus area of the government and segments like roads and railways which are essentially under the wings of the government considering huge capital outlay are coming out with specifications wherein the usage of Geo-synthetics is a must for better quality and durability. Further, India having a long coastal belt of approximately 8000 km is increasingly prone to erosion as the sea water is inching its way in to the land. The erosion control products do limit the damages to a great extent and various state governments are going for such initiatives. The industrial lining sectors is another segment which holds promise of growth.”

From the perspective of a leading technical textiles tradeshow director, Jaenecke thinks, “Given the constant growth of Techtextil India and Techtextil in Germany, the Indian technical textiles market appears to be on a growth path in sectors like clothtech and packtech showing the highest demand. With the changing trends brought about covid-19 pandemic, demand for protective technical textiles, anti-viral apparels and textiles will now amplify growth in medtech, sportech and hometech segments. India’s increasing focus on upgrading its defence and security measures is also likely to push growth in safety related textiles such as high altitude clothing, bullet proof jackets, ballistic fabrics etc in the coming years.”

PLI push & other measures to power the sector

The Indian government has been providing increasing support to the manmade fibres and technical textiles sector. From notifying separate HS codes for 207 technical textiles items in January, 2019 to the launch of the Focused Product Investment Scheme (PLI) to attract investment and growth in the man-made fibre (MMF) and Technical Textile segment in November, 2020, and the decision to form a dedicated Export Promotion Council for Technical Textiles in December, 2020, shows the concerted efforts to empower this sector. But are they enough?

Sharing his views, Confederation of Indian Textile Industry’s (CITI) Chairman, T Rajkumar, said, “PLI scheme is extended for 10 key specific sectors, of which textile is one of the sectors and has been allocated Rs 10,683 crore of the total estimated outlay of Rs 1.46 lakh crore, mainly for MMF and technical textile segment. The objective of the scheme is to promote building of new facilities and attract investment in the MMF sector under Greenfield and Brownfield investments.”

Jaenecke believes the impact of such initiatives will be significant. He said, “The share of India in world technical textiles market is about 4-5 per cent. I believe the policy push will drive further momentum in the sector and help the industry boost domestic manufacturing, especially in the MMF segment and technical textiles. Moreover, with the industry under severe financial stress due to the pandemic, it is a thrust in the right direction as it will also incentivise and encourage new product development and manufacturing competitiveness that can open up new opportunities for export as well as in the domestic market in the long term.”

The proposed scheme will not only attract investment in the technical textiles sector but also improve India’s global share and create employment opportunities. “The scheme incentivises incremental output which is holistic unlike others which primarily emphasize on setting up local manufacturing. It shares similarities with the South Korean incentivising scale model. The 5 year tenure is attractive and facilitates gradual scale up. The scheme supports not only green field investments but capacity expansion as well. The manufacturing sector would not only focus on local markets & import substitution but also would go for global market for business expansion,” according to Rehman.

The blocks & the road ahead

India’s imports of technical textiles are higher than the exports at the moment. The domestic technical textile relies heavily on imported machinery and specialty fibres, which poses a major challenge for Indian manufacturers. A major thrust to promote production of high-tech machinery by the government can help bridge the gap and push the performance of this sector in future. High duty on raw materials and low duties on finished products have marred the industry too. Sharing other pain areas of this industry, Rehman said, “lack of product diversification, scale and capacities to manufacture high-tech products and speciality fibre production in India.”

A large majority of prospective end-users of technical textile products are still unaware of the advantages of utilising such products in India. This is mainly the reason for slow adoption of technical textiles. The penetration level of technical textiles in India is also relatively low compared (5 to 10 per cent) to developed economies. As solution to the above roadblocks Jaeneck suggests that, “Focus on high-end research and development and facilitating investments in this sector, can accelerate growth.

There is also a strong need for standardisation, and safety regulations for technical textile products to curtail production of sub-standard low quality products. According to Agarwal, “There is a huge gap between the market potential India holds for technical textiles and for the domestic demand for high value products. Lack of awareness among user agencies/departments, non-availability of Indian standards, codes & guidelines, lack of production facilities covering the entire gamut of products, authorities not taking into consideration life cycle cost of the projects are key bottlenecks for the Indian technical textiles industry.”

As solution to the above roadblocks Jaeneck suggests that, “Focus on high-end research and development and facilitating investments in this sector, can accelerate growth. “ Incentivising research and development in the technical textiles sector can fuel indigenous production of well-engineered machines and lessen the dependency on imports.

“Subsides and incentives should be offered to set up export focused technical textile manufacturing hubs. Steps to be taken to identify potential organisations and in promoting international standardisation to meet the demands of global market. To bolster the existing BIS, a new department dedicated to fast tracking standardisation of Technical Textiles must be formed. Ease in licensing and regulatory requirements will boost foreign investments and facilitate the development of next generation technologies in this sector. Mandatory use of technical textile in priority sector like roadways, railways, defense and construction must also be considered,” suggests Agarwal to improve the status quo of the Indian technical textile industry.

However, on the upside 100 per cent FDI by the central government in this niche and joint ventures have been instrumental in bridging the technological gap. Leading players of the global technical textile industry, like DuPont, Kimberly Clark, and Ahlstrom to name a few have benefitted from it. Moreover, the ministry of textiles is under the process of developing an ecosystem for the creation of new mega textile parks exclusively for technical textiles and for upgrading 19 functional textile parks supported by the government. To reinstate government’s commitment to develop this sector, in February 2020, Cabinet Committee on Economic Affairs (CCEA) approved the setting up of a National Technical Textiles Mission (NTM) with a total outlay of Rs 1,480 Crore implemented during 2020-21 to 2023-24. The most recent being the setting up of a dedicated Export Promotion Council for technical textiles, one of the four components of the NTM, aimed to achieve a 10 per cent growth rate every year until NTM ends. In the present backdrop, India’s technical textile market although still in its nascent stage but with right amount of government intervention and a growing demand holds a bright future.