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Indian textile industry needs value-addition

Aug 05, 2019
Indian textile industry needs value-addition

Indian textiles sector needs to refocus and concentrate on value addition. Textile industry in India is in distress due to sluggishness in yarn uptake by the upstream sectors. The ongoing trade war between the United States and China is having its own effect on the manufacturing and textile sectors in India. Cotton availability situation, manufacturing cost and slowing of yarn export are some of the factors that are negatively affecting the industry.

While cotton prices are showing a declining trend since this June, spinning industry is not enthused in buying cotton at the present time. The 30-mm cotton that used to be priced at Rs 47,000 to 48,000 per candy (about 356 kg) few months back, today is priced around Rs 44,000 per candy, which should interest mills to buy and stock. Lack of cotton yarn buying by the upstream sector in India has put enormous pressure on the spinning industry and allied sectors such as textile machinery.

“Yarn demand is not there,” stated S K Nanjappan, Managing Director of Coimbatore-based Kanaka Lakshmi Mills Pvt Ltd, who has been in the textile field for 50-years. Nanjappan disclosed many valuable points worth considering. Indian domestic market is saturated and hence value-addition focusing on technical products and export market is needed. He highlighted how his company started moving away from fashion and commodity textiles in the year 2000. Today, his weaving mill manufactures 400,000 square meters of woven cloth per month that goes into making base cloth for abrasives, showcasing the positive aspect of diversification. He is still exploring various options to take his company into technical textiles industry.

“Cotton yarns are selling at a much lower price than last year, thus squeezing margins and forcing production shutdown,” stated Velmurugan, general manager of a 70,000 ring spindle mill in Aruppukottai, South India. China factored heavily in his views on the slowdown of the Indian textile sector. He is convinced that value-addition is the need of the hour. He stated that Indian spinning sector is a world leader, however, upstream sectors such as processing and technical textiles sectors need enhancement. He insisted that Indian government needs to support export by boosting incentives to capture high-end markets.

The cotton yarn situation has forced one day/week mandatory factory closures in some regions in India and idling about 30 per cent of the total spinning capacity in India. Indian textile and manufacturing industry needs an uptick. “Indian industry, not only the textile sector is in a wait and watch mood,” stated textile industry veteran Nanjappan.