Is india geared up for the digital textile revolution ?
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Is india geared up for the digital textile revolution ?
- 2. Is India geared up for the digital textile printing revolution? Aditya Chandavarkar CEO InkjetForum India
- 3. © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 3
- 4. Contents Indian Economy & Textile Industry Textile supply chain & Cluster areas Digital Textile Printing in India Current Scenario – Equipment & Inks Opportunities Challenges Inkjet Forum India Initiative © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 4
- 5. Indian Economy • Large, dynamic and steadily expanding • Characterized by a huge workforce operating in many new sectors of opportunity • 4th Largest economy based on PPP • Average GDP Growth Rate: 7% (Since 1997) • GDP Growth Rate in 2010: 9.7% © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 5
- 6. Indian GDP Growth © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 6
- 7. Indian Economy & Textile Industry Driven primarily by domestic consumer consumption. Massive growth of the Indian middle class - Asia's 'buy' economy 2001-2007 saw per capita income of India rise by 62% Major consumer demand is being generated by fast growing middle class & people from the booming IT-BPO sector Growing Indian economy increasing demand for the products of the India Textile Industry © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 7
- 8. Indian Textile Industry • One of the leading textile industries in the world • Major contributor to fast growing Indian industrial sector • Contributes: • - 27% to total foreign exchange earning - 14 % to industrial production, - 4 % to GDP - 17 % to export earnings. • Provides employment to over 35 m people • 2nd largest provider of employment after agriculture © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 8
- 9. • India occupies a pivotal position in the global textile dyeing and printing industry • 7th in the trade of textile dyeing and printing • 5th in the trade of ready made garments • The output of the Indian colorant industry in 2000 accounted for 5% of the total global output and 12% in 2010 © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 9
- 10. Textile & Apparel Supply Chain © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 10
- 11. Textile Cluster Areas Powerloom Other © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 11
- 12. Major Textile Companies in India Turnover (2008 – Business Areas Company 09) US $ billion Welspun India Ltd 1.19 Home textiles, bathrobes, terry towels Vardhman Group 0.7 Yarn, fabric, sewing threads, acrylic fibre Alok Industries Ltd. 0.62 Home textiles, woven and knitted apparel fabric, garments and polyester yarn Raymond Ltd 0.54 Worsted suiting, tailored clothing, denim, shirting, woollen outerwear Arvind Mills Ltd 0.48 Spinning, weaving, processing and garment production (denims, shirting, khakis, knitwear) Bombay Dyeing Ltd 0.27 Bed linen, towels, furnishings, fabric for suits, shirts, dresses and saris in cotton and polyester blends Garden Silk Mills Ltd 0.27 Dyed and printed fabric © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 12
- 13. Digital Textile Printing in India Digital textile printing is in its initial stage Market is opening up and growth in DTP is very recent Estimated Market Size - 31 million linear meters/year Estimated Market Value - US $ 100 million/year Printing Units – 500 to 2000 linear meters/day © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 13
- 14. Digitally Printed Sarees Average Saree Length: 5.5 m © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 14
- 15. Adoption of DTP Fast Adoption Slow Adoption © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 15
- 16. Current Scenario – Equipment 03/14/12 © 2012, Inkjet Forum India 16
- 17. Major OEM’s in India Mimaki La Mecchanica – TX-2 & JV 5 Based Printers MS – JP5 & JP6 Kornit Reggiani Stork/SPG Prints Atexco Zimmer - ChromoJET New Entrants – Zimmer Colaris, Robustelli Monalisa, Durst Rhotex 320, Konica Minolta 2012 / Aditya Chandavarkar 18/2/2012 © Inkjet Forum India Nassenger Series 17
- 18. Current Scenario – Inks © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 18
- 19. Ink Pricing in India YEAR PRICE ($/Rs.) 1998 360 / 18000 2002 240 / 12000 2004-2006 160 / 8000 2007-2008 120 – 100 / 6000-5000 2010 70 – 50 / 3500-2500 2011-2013 ??? Price Reduced by >80% in 12 years © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 19
- 20. Opportunities Manufacturing Flexibility Lower Lead Times Favourable Demand Conditions - Large, Growing Domestic Market Strong Presence of related & supporting industry © Inkjet Forum India 2012 / Aditya Chandavarkar Product Development/Design 18/2/2012 20
- 21. Opportunities Industry competition – promotes innovation Applications - Apparel (esp. ladies clothing) - Home furnishings - Soft signage (advertising use of textiles) - Flags & Banners - Finished garment / T-shirt / sportswear printing © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 21
- 22. Challenges Lack of knowledge in industry Requirement of technical trained operators Cost issue – understanding of DTP cost model Information dissemination by OEM’s & distributors for optimal use of DTP technology Customers should actively educate themselves & their staff © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 22
- 23. Challenges Readily Available Technical / Application support. Domestic Market Institutional Support “The emphasis should be more on the long term cost advantages the complete package of Digital Textile Printing technology offers.” © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 23
- 24. About Inkjet Forum India A fresh initiative in the area of Inkjet printing technology to organise: Conferences Education Programs Workshops Conduct Market Research Experience & Understanding of Printing © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 24
- 25. Objectives Assist the Indian inkjet printing industry to: Keep updated with technological developments Understand the various applications & their requirements Understand market trends © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 25
- 26. 29th - 30th November 2012, JW Marriott, Mumbai Focus Areas - Printing Technology - Ink - Design/Software - Pre/Post Processes - Applications © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 26
- 27. Industry Support © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 27
- 28. Any Questions ?? … Discussions ?? Aditya Chandavarkar CEO, Inkjet Forum India M: +91 9869441285 Email: aditya@inkjetforumindia.com Web: www.inkjetforumindia.com © Inkjet Forum India 2012 / Aditya Chandavarkar 18/2/2012 28
Notas do Editor
- who are still at their prime age and are outwardly fashion savvy. This has generated huge demand for fashionable dresses which has consequently led to the emergence of some world class Indian designers with their latest fashion apparels.
- Though was predominantly unorganized industry even a few years back, but the scenario started changing after the economic liberalization of Indian economy in 1991. The opening up of economy gave the much-needed thrust to the Indian textile industry, which has now successfully become one of the largest in the world. India textile industry largely depends upon the textile manufacturing and export. . It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textile exports. Today, Textile industry is one of the major contributors to the total output of the fast growing Indian industrial sector which is at present revolving around 14%. From this background it is quite clear to us that the market size of India is growing at a very high pace. With increasing demand for the products of Indian Textile Industry, new players are jumping in the league to get a slice of the profitable pie and the already existing textile mills are raising their capacity for increasing their supply. Hence, the expansion process of the domestic industry is also not far behind.
- New Entrants: Zimmer Colaris, Durst, Konica Minolta Nassenger Series
- 3
- Pricing will depend on policies by companies New companies entering India – Solunaris, Dystar Local Dye/pigment manufacturers in various stages of developments for inks. We feel that ink prices will be stable in this year owing to increase is cost of raw materials & labour. Additionally continuous development of the printing machines leads to ink companies investing in R & D to manufacture inks which are compatible with the printing speeds. All these factors However we will always see a range of ink products depending on the budget of the end user as we see in all technologies across industries. We at Inkjet Forum India feel that the price of inks should not be the real motivator for growth of the Digital Textile Printing Industry.
- Good spending power & absorption Market available for all ranges. 4.1.2 Low costs India has significantly lower raw material costs, wastage costs and labour costs when compared to other countries. A recent study estimated India’s labour costs (total employment cost for labour across industries) to be amongst the lowest (2.024 Euro) in the world, a sixth of even China’s (13.88 Euro) 4.1.3 Manufacturing flexibility The fragmented industry structure and small average scale of operation in India’s textile industry has created the capability for enhanced flexibility in production. Indian firms are Corporate Catalyst India A report on Indian Textiles Industry used to handling small-runs, and have skilled manpower with the ability and willingness to work on complex designs. Therefore India has the ability to produce not only large orders but also smaller and complex orders. In contrast, the textile industry in other countries like China are more industrialised, and production lines are mostly geared to handle relatively simple designs that can be easily broken down and mass-produced. The flexibility offered by India’s textile industry can be a significant advantage for the fashion industry, which typically demands small lots of complex designs. India also offers flexibility in its ability to handle different materials such as cotton, wool, silk and jute, with equal skill. These advantages also enable the Indian industry to produce high value customised apparel that is increasingly finding demand in several exports markets. 4.1.4 Lower lead times India is one of the few developing countries today with a fully developed textile value chain extending from fibre to fabric to garment exports. The presence of capabilities across the entire value chain within the country is an advantage as it reduces the lead time for production and cuts down the intermediate shipping time. Indian textile firms have leveraged this advantage to integrate their operations, either forward or backward. For example, Arvind Mills, the largest producer of blends and denim in the country and the third largest denim producer globally, supplies fabric to virtually every major clothing brand in the world, such as Levi’s, Gap, Dockers and so on. Three years ago it integrated forward into garment manufacturing (jeans and T-shirts), investing more than $30 million in ten new factories. 4.1.5 Favourable demand conditions – large, growing domestic market Demographic trends in India are changing, with increase in disposable income levels, consumer awareness and propensity to spend. According to NCAER data, the Consuming Class, with an annual income of US$ 980 or above, is growing and is expected to constitute over 80 per cent of the population by 2009-10. There is a change in the consumer mindset that has led to a trend of increased consumption on personal care and lifestyle products as well as branded products. These trends offer great growth opportunities for companies across various sectors, including textiles. Supporting the increasing demand for consumption is the revolution taking place in India’s retail sector. Organised retail is playing a key role in structuring the Indian domestic market, reinforced by the rapid rise of supermarkets, malls, theme stores and franchises across urban India. India thus presents a large and vibrant market for textiles and apparels, with a potential for sustained growth. 4.1.6 Strong presence of related and supporting industries India’s textile industry is supported by well established supporting industries and institutions that provide inputs and expertise to the industry in terms of design, engineering and machinery. 4.1.7 Product development/ design Corporate Catalyst India A report on Indian Textiles Industry India has built adequate infrastructure throughout the various stages in textile development, that is, design, sourcing, merchandising and production. Apart from institutes such as NIFT (National Institute of Fashion Technology) and Apparel Training Institutes, there are several colleges, including the Indian Institutes of Technology and National Institutes of Technology that offer courses in Textile Engineering. Thus, India has the infrastructure in place to produce qualified and skilled manpower in areas of textile design and engineering Indian firms have leveraged this strength to develop a competitive advantage – the ability to contribute to the design, not only in preparing samples and prototypes, but also in translating concepts into varieties of finished designs, as well as introducing designs of their own. Several Indian firms have their own design departments and in the last five years have begun to work closely with overseas designers and/or agents. High value, up-market specialty buyers such as Gap, Banana Republic and J. Crew value such expertise and have been leveraging this while buying from India. 4.1.8 Textile machinery The Indian textile engineering industry, which began as an offshoot of the textile industry, is today reckoned as the largest segment in the country. Indian textile machinery manufacturers are able to produce at competitive prices sophisticated machines of higher speed and production capability. The textile industry also gets significant support from the well developed IT capabilities of Indian firms. 4.1.9 Industry competition – promotes innovation Despite a large and growing market, the presence of a large number of small scale players makes the Indian textile Industry highly competitive. A number of MNCs have also entered India in different areas. The high level of competition in the industry impels the firms to work to increase in productivity and innovation. India today is one of the lowest cost manufacturers of quality textiles, not only due to its inherent strengths, but also because industry rivalry has prompted firms to focus on quality improvement, cost reduction and productivity increase. 4.1.10 Favourable Policy Initiatives The Indian Government is trying to create an environment to attract an investment of Rs 1,400 billion in the Eleventh Plan period (2007-2012) when the textiles and garment exports are expected to rise from the current US$14 billion to US$40 billion. The Multi Fibre Arrangement (MFA) that came to an end on January 1, 2005 has opened up a plethora of opportunities for the Indian textile industry. Global trade in textiles is expected to increase to US$ 600 billion by 2010 from US$ 356 billion in 2003. The phasing-out of MFA has ensured that quota restrictions in US, European Union and Canada which restricted textile and apparel exports from India to these regions have been removed. India and China are the two countries poised to derive the maximum benefit from the phasing out of MFA. India’s quota allocation for important markets like the US, EU and Canada was very low. Corporate Catalyst India A report on Indian Textiles Industry With textiles accounting for almost 20 percent of Indian exports, and the industry and allied areas providing employment to around 80 million people in India, the Indian government is turning its attention to removing the bottlenecks that hinder its growth.
- Good spending power & absorption Market available for all ranges. 4.1.2 Low costs India has significantly lower raw material costs, wastage costs and labour costs when compared to other countries. A recent study estimated India’s labour costs (total employment cost for labour across industries) to be amongst the lowest (2.024 Euro) in the world, a sixth of even China’s (13.88 Euro) 4.1.3 Manufacturing flexibility The fragmented industry structure and small average scale of operation in India’s textile industry has created the capability for enhanced flexibility in production. Indian firms are Corporate Catalyst India A report on Indian Textiles Industry used to handling small-runs, and have skilled manpower with the ability and willingness to work on complex designs. Therefore India has the ability to produce not only large orders but also smaller and complex orders. In contrast, the textile industry in other countries like China are more industrialised, and production lines are mostly geared to handle relatively simple designs that can be easily broken down and mass-produced. The flexibility offered by India’s textile industry can be a significant advantage for the fashion industry, which typically demands small lots of complex designs. India also offers flexibility in its ability to handle different materials such as cotton, wool, silk and jute, with equal skill. These advantages also enable the Indian industry to produce high value customised apparel that is increasingly finding demand in several exports markets. 4.1.4 Lower lead times India is one of the few developing countries today with a fully developed textile value chain extending from fibre to fabric to garment exports. The presence of capabilities across the entire value chain within the country is an advantage as it reduces the lead time for production and cuts down the intermediate shipping time. Indian textile firms have leveraged this advantage to integrate their operations, either forward or backward. For example, Arvind Mills, the largest producer of blends and denim in the country and the third largest denim producer globally, supplies fabric to virtually every major clothing brand in the world, such as Levi’s, Gap, Dockers and so on. Three years ago it integrated forward into garment manufacturing (jeans and T-shirts), investing more than $30 million in ten new factories. 4.1.5 Favourable demand conditions – large, growing domestic market Demographic trends in India are changing, with increase in disposable income levels, consumer awareness and propensity to spend. According to NCAER data, the Consuming Class, with an annual income of US$ 980 or above, is growing and is expected to constitute over 80 per cent of the population by 2009-10. There is a change in the consumer mindset that has led to a trend of increased consumption on personal care and lifestyle products as well as branded products. These trends offer great growth opportunities for companies across various sectors, including textiles. Supporting the increasing demand for consumption is the revolution taking place in India’s retail sector. Organised retail is playing a key role in structuring the Indian domestic market, reinforced by the rapid rise of supermarkets, malls, theme stores and franchises across urban India. India thus presents a large and vibrant market for textiles and apparels, with a potential for sustained growth. 4.1.6 Strong presence of related and supporting industries India’s textile industry is supported by well established supporting industries and institutions that provide inputs and expertise to the industry in terms of design, engineering and machinery. 4.1.7 Product development/ design Corporate Catalyst India A report on Indian Textiles Industry India has built adequate infrastructure throughout the various stages in textile development, that is, design, sourcing, merchandising and production. Apart from institutes such as NIFT (National Institute of Fashion Technology) and Apparel Training Institutes, there are several colleges, including the Indian Institutes of Technology and National Institutes of Technology that offer courses in Textile Engineering. Thus, India has the infrastructure in place to produce qualified and skilled manpower in areas of textile design and engineering Indian firms have leveraged this strength to develop a competitive advantage – the ability to contribute to the design, not only in preparing samples and prototypes, but also in translating concepts into varieties of finished designs, as well as introducing designs of their own. Several Indian firms have their own design departments and in the last five years have begun to work closely with overseas designers and/or agents. High value, up-market specialty buyers such as Gap, Banana Republic and J. Crew value such expertise and have been leveraging this while buying from India. 4.1.8 Textile machinery The Indian textile engineering industry, which began as an offshoot of the textile industry, is today reckoned as the largest segment in the country. Indian textile machinery manufacturers are able to produce at competitive prices sophisticated machines of higher speed and production capability. The textile industry also gets significant support from the well developed IT capabilities of Indian firms. 4.1.9 Industry competition – promotes innovation Despite a large and growing market, the presence of a large number of small scale players makes the Indian textile Industry highly competitive. A number of MNCs have also entered India in different areas. The high level of competition in the industry impels the firms to work to increase in productivity and innovation. India today is one of the lowest cost manufacturers of quality textiles, not only due to its inherent strengths, but also because industry rivalry has prompted firms to focus on quality improvement, cost reduction and productivity increase. 4.1.10 Favourable Policy Initiatives The Indian Government is trying to create an environment to attract an investment of Rs 1,400 billion in the Eleventh Plan period (2007-2012) when the textiles and garment exports are expected to rise from the current US$14 billion to US$40 billion. The Multi Fibre Arrangement (MFA) that came to an end on January 1, 2005 has opened up a plethora of opportunities for the Indian textile industry. Global trade in textiles is expected to increase to US$ 600 billion by 2010 from US$ 356 billion in 2003. The phasing-out of MFA has ensured that quota restrictions in US, European Union and Canada which restricted textile and apparel exports from India to these regions have been removed. India and China are the two countries poised to derive the maximum benefit from the phasing out of MFA. India’s quota allocation for important markets like the US, EU and Canada was very low. Corporate Catalyst India A report on Indian Textiles Industry With textiles accounting for almost 20 percent of Indian exports, and the industry and allied areas providing employment to around 80 million people in India, the Indian government is turning its attention to removing the bottlenecks that hinder its growth.
- ALL NEW Technologies face resistance in acceptance Scale: Except for spinning, all other sectors suffer from the problem of scale. Indian firms are typically smaller than their Chinese or Thai counterparts and there are fewer large firms in India. Some of the Chinese large firms have 1.5 times higher spinning capacity, 1.25 times denim (and 2 times gray fabric) capacity and about 6 times more revenue in garment than their counterparts in India thereby affecting the cost structure as well as ability to attract customers with large orders. The central tendency is to add capacity once the order has been won rather than ahead of the demand. Customers go where they see both capacity and capabilities. Large capacity typically goes with standardized products. These firms need to develop the managerial capabilities required to manage large work force and design an appropriate supply chain. For the size of the Indian economy, it will have to have bigger firms producing standard products in large volumes as well as small and mid size firms producing large variety in small to mid size batches (the tension between the organized and un-organized sectors will have to be addressed first, though). Then there is the need for emergence of specialist firms that will consolidate orders, book capacities, manage warehouses and logistics of order delivery. Skills : Three issues must be mentioned here : (a) there is a paucity of technical manpower – there exist barely 30 programmes at graduate engineering (including diploma) levels graduating about 1000 students – this is insufficient for bringing about technological change in the sector; (b) Indian firms invest very little in training its existing workforce and the skills are limited to existing processes (Chandra 1998); (c) there is an acute shortage of trained operators and supervisors in India. It is expected that Indian firms will have to invest close to Rs. 1400 bn by year 2010 to increase its global trade to $ 50 bn. This kind of investment would require, by our calculations, about 70,000 supervisors and 1.05mn operators in the textile sector and at least 9 112,000 supervisors and 2.8mn operators in the apparel sector (assuming a 80:20 ratio of investment between textiles and apparel). The real bottleneck to growth is going to be availability of skilled manpower. Cycle Time : Cycle time is the key to competitiveness of a firm as it affects both price and delivery schedule. Cycle time reduction is strongly correlated with high first pass yield, high throughput times, low variability in process times, low WIP and consequently cost. Indian firms have to dramatically reduce cycle times across the entire supply chain which are currently quite high (Chandra, 2004). Customs must provide a turnaround time of ½ day for an order before Indian firms can they expect to become part of larger global supply chains. Indian firms need a strong deployment of industrial engineering with particular emphasis on cellular manufacturing, JIT and statistical process control to reduce lead times on shop floors. Penetration of IT for improving productivity is particularly low in this sector. Innovation & Technology: A review of the products imported from China to USA during January–April 2005 reveals that the top three products in terms of percentage increase in imports were Tire Cords & Tire Fabrics (843.4% increase over the previous year), Non-woven fabrics (284.1% increase) and Textile/Fabric Finishing Mill Products (197.2% increase) (FICCI, 2005). None of these items, however, figure in the list of imports from India that have gained in these early days of post-MFA. Entry into newer application domains of industrial textiles, nanotextiles, home furnishings etc. becomes imperative if we are to grow beyond 5–6% of global market share as these are areas that are projected to grow significantly. Synthetic textiles comprise about 50 per cent of the global textile market. Indian synthetic industry, however, is not well entrenched. The Technology Upgradation Fund of the government is being used to stimulate investment in new processes. However, there is little evidence that this deployment in technology has accompanied changes in the managerial regimes – a necessary condition for increasing productivity and order winning ability. Domestic Market : The Indian domestic market for all textile and apparel products is estimated at $26 bn and growing. While the market is very competitive at the low end of the value chain, the mid or higher ranges are over priced (i.e., ‘dollar pricing’). Firms are not taking advantage of 10 the large domestic market in generating economies of scale to deliver cost advantage in export markets. The Free Trade Agreement with Singapore and Thailand will allow overseas producers to meet the aspirations of domestic buyers with quality and prices that are competitive in the domestic market. Ignoring the domestic market, in the long run, will peril the export markets for domestic producers. In addition, high retail property prices and high channel margins in India will restrict growth of this market. Firms need to make their supply chain leaner in order to overcome these disadvantages. Institutional Support : Textile policy has come long ways in reducing impediments for the industry – sometimes driven by global competition and, at other times, by international trade regulations. However, few areas of policy weakness stand out – labour reforms (which is hindering movement towards higher scale of operations by Indian firms), power availability and its quality, customs clearance and shipment operations from ports, credit for large scale investments that are needed for upgradation of technology, and development of manpower for the industry. These are problems facing several sectors of industry in India and not by this sector alone. In conclusion, competitive strategies are developed by sector level firms and its their individual and collective initiatives that secure higher market share in global trade. While one has to be ever vigilant of non-tariff barriers in the post MFA world, the new market will be won on the basis of capabilities across the supply chain. Policy will need to facilitate this building of capabilities at the firm level and the flexible strategies that firms will need to devise periodically.
- Scale: Except for spinning, all other sectors suffer from the problem of scale. Indian firms are typically smaller than their Chinese or Thai counterparts and there are fewer large firms in India. Some of the Chinese large firms have 1.5 times higher spinning capacity, 1.25 times denim (and 2 times gray fabric) capacity and about 6 times more revenue in garment than their counterparts in India thereby affecting the cost structure as well as ability to attract customers with large orders. The central tendency is to add capacity once the order has been won rather than ahead of the demand. Customers go where they see both capacity and capabilities. Large capacity typically goes with standardized products. These firms need to develop the managerial capabilities required to manage large work force and design an appropriate supply chain. For the size of the Indian economy, it will have to have bigger firms producing standard products in large volumes as well as small and mid size firms producing large variety in small to mid size batches (the tension between the organized and un-organized sectors will have to be addressed first, though). Then there is the need for emergence of specialist firms that will consolidate orders, book capacities, manage warehouses and logistics of order delivery. Skills : Three issues must be mentioned here : (a) there is a paucity of technical manpower – there exist barely 30 programmes at graduate engineering (including diploma) levels graduating about 1000 students – this is insufficient for bringing about technological change in the sector; (b) Indian firms invest very little in training its existing workforce and the skills are limited to existing processes (Chandra 1998); (c) there is an acute shortage of trained operators and supervisors in India. It is expected that Indian firms will have to invest close to Rs. 1400 bn by year 2010 to increase its global trade to $ 50 bn. This kind of investment would require, by our calculations, about 70,000 supervisors and 1.05mn operators in the textile sector and at least 9 112,000 supervisors and 2.8mn operators in the apparel sector (assuming a 80:20 ratio of investment between textiles and apparel). The real bottleneck to growth is going to be availability of skilled manpower. Cycle Time : Cycle time is the key to competitiveness of a firm as it affects both price and delivery schedule. Cycle time reduction is strongly correlated with high first pass yield, high throughput times, low variability in process times, low WIP and consequently cost. Indian firms have to dramatically reduce cycle times across the entire supply chain which are currently quite high (Chandra, 2004). Customs must provide a turnaround time of ½ day for an order before Indian firms can they expect to become part of larger global supply chains. Indian firms need a strong deployment of industrial engineering with particular emphasis on cellular manufacturing, JIT and statistical process control to reduce lead times on shop floors. Penetration of IT for improving productivity is particularly low in this sector. Innovation & Technology: A review of the products imported from China to USA during January–April 2005 reveals that the top three products in terms of percentage increase in imports were Tire Cords & Tire Fabrics (843.4% increase over the previous year), Non-woven fabrics (284.1% increase) and Textile/Fabric Finishing Mill Products (197.2% increase) (FICCI, 2005). None of these items, however, figure in the list of imports from India that have gained in these early days of post-MFA. Entry into newer application domains of industrial textiles, nanotextiles, home furnishings etc. becomes imperative if we are to grow beyond 5–6% of global market share as these are areas that are projected to grow significantly. Synthetic textiles comprise about 50 per cent of the global textile market. Indian synthetic industry, however, is not well entrenched. The Technology Upgradation Fund of the government is being used to stimulate investment in new processes. However, there is little evidence that this deployment in technology has accompanied changes in the managerial regimes – a necessary condition for increasing productivity and order winning ability. Domestic Market : The Indian domestic market for all textile and apparel products is estimated at $26 bn and growing. While the market is very competitive at the low end of the value chain, the mid or higher ranges are over priced (i.e., ‘dollar pricing’). Firms are not taking advantage of 10 the large domestic market in generating economies of scale to deliver cost advantage in export markets. The Free Trade Agreement with Singapore and Thailand will allow overseas producers to meet the aspirations of domestic buyers with quality and prices that are competitive in the domestic market. Ignoring the domestic market, in the long run, will peril the export markets for domestic producers. In addition, high retail property prices and high channel margins in India will restrict growth of this market. Firms need to make their supply chain leaner in order to overcome these disadvantages. Institutional Support : Textile policy has come long ways in reducing impediments for the industry – sometimes driven by global competition and, at other times, by international trade regulations. However, few areas of policy weakness stand out – labour reforms (which is hindering movement towards higher scale of operations by Indian firms), power availability and its quality, customs clearance and shipment operations from ports, credit for large scale investments that are needed for upgradation of technology, and development of manpower for the industry. These are problems facing several sectors of industry in India and not by this sector alone. In conclusion, competitive strategies are developed by sector level firms and its their individual and collective initiatives that secure higher market share in global trade. While one has to be ever vigilant of non-tariff barriers in the post MFA world, the new market will be won on the basis of capabilities across the supply chain. Policy will need to facilitate this building of capabilities at the firm level and the flexible strategies that firms will need to devise periodically.
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