The textile timepiece is ticking away. As the decades-old quota system is dismantled on January 1, 2005, India’s textiles industry — the country’s largest employer — is gearing up for the brave new world. Or is it? While the large Indian textile firms — Arvind Mills, Raymond, Ashima, Welspun — are investing in technology and in building capacity, market watchers say the many medium-sized firms just don’t match up in terms of scale, productivity, lead-times. These attributes will mark the difference between success and failure, as consuming markets and international retailers start the ruthless exercise of consolidating sourcing. If the stakes are high, the competition is ruthless. China is on a roll, exporting $49 billion of garments and growing at a stupendous rate. India, with exports of $5.48 billion, will face stiff competition from other Asian countries like Japan, Korea, Taiwan, Indonesia, Sri Lanka and Bangladesh. If India has one thing going for it, it’s a presence in a small club — with China, Pakistan and Brazil — which deals with the entire value chain, from yarn to garments. But the problems are many. Show Me The Money Investments, either in capacity expansion or in R&D, are not visible. As Pradeep Bhandari, Deputy Group President of Raymond Group, puts it, “Huge investments will be required in the post-quota regime and players need to go in for integration. But there is hardly any big investments, especially in the synthetics sector.’’ At present 70 per cent of the Indian textile export is cotton-based while 25 per cent is man-made fibre (synthetics) and the rest consists of woollen. Says Rahul Mehta, managing director of Creative Outerwear Ltd, a Rs 300-crore garment exporter: “To take advantage of the post quota regime, we need to double capacity. But no investments to expand capacity has taken place,’’ Mehta added. No wonder a part of the domestic industry is also resting its hopes on the possibility of US and EU deciding to selectively extend quotas on China till 2008.
