The Farm to Fashion global summit of the Gujarat Chamber of Commerce & Industry (GCCI) and Maskati Cloth Market Mahajan (MCMM) will provide a platform for the textile value chain to develop a vision for textiles industry for 2035. The three-day event will take place from May 4 2018 in Ahmedabad, Gujarat. GCCI president Shailesh Patwari discusses with Hiral Oza the highs and lows of the Indian textiles sector.
What went into deciding to organise an event like Farm to Fashion?
Gujarat has been known for its textiles industry. Ahmedabad was once called the Manchester of India. Slowly, the number of composite mills in the state began dwindling. Gujarat is still the highest cotton-growing state; yet, it lags behind in manufacturing products across the value chain-from Farm to Fashion. If we can bridge this gap, Gujarat’s textiles revenue will increase. This will also reduce the cost of transportation. Gujarat has better infrastructure than other states. Farm to Fashion is meant to fill up this gap. Gujarat is growing cotton and we would like to take it from farm to fashion, to realise Prime Minister Narendra Modi’s 5F Formula: farm to fibre; fibre to factory; factory to fashion; fashion to foreign.
What would be the Vision 2030 for the textiles industry?
The textiles policy is very important, which is unfortunately long overdue. We are holding 17 different conferences and conclaves during the three-day event where several national and international speakers will discus various issues and solutions. It will be our sincere attempt to present the outcome of these conferences in the form of a white paper to the government. We want the government to incorporate the inputs in the yet-to-be-announced textiles policy. Our vision for textiles and garment industry for 2030 is for India to shine in the field of textiles, for which a proper policy structure is vital.
How many manufacturers will be participating in the event?
We have about 170 stalls, all of which have been booked. We are expecting delegations from Bangladesh, Sri Lanka, Vietnam and Taiwan. We have invited consulates-general of various countries including the UK. We also did a roadshow in Bangladesh. We will charge a fee from delegates. We want genuine and interested parties to visit and share knowledge, and network with manufacturers. Through Farm to Fashion, we want to provide manufacturers access to international partners and buyers. We have organised industrial visits for them. For instance, they can visit facilities of Arvind to understand the working of mills in Gujarat. We want them to see our core strengths. Environmental compliance, a grave issue in textiles, is also something we will be focussing on.
Since it is Farm to Fashion, our focus is on farm; also, because Gujarat’s cotton production is high. But according to our data sources, the cotton yield here is just 550 kg per hectare while Australia produces 2,000 kg per hectare, the US 1,500 kg per hectare, and China produces 1,400-1,500 kg. We want to increase our productivity and take it to that level. The increase in cotton production will benefit not just farmers, but the high conversion of cotton (into textile products) will also boost the industry.
Which verticals in Gujarat’s textiles industry need development?
Gujarat’s capacity of ginning and spinning units is sufficient. The conversion of fabrics to readymade garments (RMG) is very low. We sell fabrics to manufacturers of RMG in places like Bengaluru, who then send the stitched apparels back to Gujarat. It is our intention to increase the conversion of fabrics into RMG through setting up of apparel units in the state. If we can increase the capacity to manufacture, market, and export RMG from Gujarat, the country and the textiles industry here both will benefit.
What according to you is the global perception of the Indian textiles and apparel industry?
Globally, when compared to Bangladesh, Sri Lanka, and China, India lags behind. Small countries import Indian cotton, chemicals and fabrics to make products. Bangladesh imports textile dyes and chemicals from Gujarat. These countries make and export RMG from cotton, chemicals, and fabrics made in India to large international brands. We too can do this. But we aren’t able to compete due to lack of knowledge, connectivity and appropriate policies. Through Farm to Fashion, which we plan to organise every alternate year, we want to change this perception and attract investments.
What needs to be changed right away?
To change perceptions, we need to showcase our success stories. For instance, it’s not enough to say that Australia grows 2,000 kg cotton per hectare; hearsay is not enough in today’s times. But when you see live demonstrations to such facts, when representatives of farmers and NABARD executives see how cotton is grown on barren lands with less water, people will believe.
What challenges faced by the Indian textiles and apparel industry will be addressed at the event?
The lack of availability of skilled labour in RMG units, loopholes in labour laws, expensive power, and lack of awareness about environmental compliances are some challenges. The industry has the potential to generate high employment opportunities. Farm to Fashion will not only address these issues, but also provide probable solutions. Productive and efficient labour is the need of the hour. The history of Indian textiles began with composite mills. I owned one too. The workers in these mills had no fear of losing their jobs. Even if a worker had deliberately committed a mistake or damaged a cloth, we couldn’t fire him, because then all workers would go on strike. The same labourer in a private setup would be three times more productive and make no mistake because he knows he will be fired. Today, workers do not fear losing their jobs; this attitude is detrimental to the industry.
How does this event dovetail with the Centre’s Make in India initiative?
Make in India is a very good initiative. However, our policy structure is weak, and we will draw the government’s attention to this. For example, when we import garments from Bangladesh there is no duty on it, but there is if you buy from an SEZ and sell in the domestic market. This anomaly needs to be done away with. It is unfair that duty is applied on products that are made and sold in India whereas no duty is charged when the same are imported. The industry cannot sustain itself in such an environment.
The government has agreed to a long-standing demand of MMF producers by lowering GST. What opportunities and challenges await India’s synthetic textiles industry?
The policies are not conducive for MMF manufacturers in India. The government must listen to manufacturers while making policies. The government is making policies without any consultation, and when we oppose it, discussions do take place. This takes up 3-4 years. Our concern is that when new policies are framed, industries should be consulted and their suggestions must be considered.
What can the industry do to increase global exports?
Bangladesh and Sri Lanka are giving India stiff competition. China has reduced their share in RMG. All international brands are currently sourcing garments from Bangladesh and Sri Lanka. These countries import and use fabrics that are made in India. Power in India is very expensive; in Ahmedabad the cost of energy is ₹7.5 per unit. But the cost of power in these countries is about ₹2.5 per unit. The labour cost is also less. Apart from this, the Indian government does not levy any duty when garments are imported from these countries. This is counter-productive and affects our domestic industry. The entire value chain must be considered when we talk about Make in India.
How adept is the Indian textiles industry in adopting new technologies?
When it comes to new technologies, Indian textiles and apparel manufacturers lag behind. We still import buttons for shirts. Our ancillary industries are not quite developed. The availability of technically sound staff is scarce. We need training centres for imparting technical skills. The productivity of labour is very low in India. A Chinese worker makes 20-25 pieces of apparel, while in India a labourer barely works on 7-8 pieces per day. This is a big challenge for us. I am not a big supporter of robotics, since we are a labour-intensive nation. Industry 4.0 is working well for the European markets; in fact, they are going beyond that too. In India, industry 4.0 can be used in the textile engineering sector, but not for garmenting. It will otherwise create unemployment. A lot of uneducated people are absorbed in the textiles industry as workers; hence, I wouldn’t recommend it at the garmenting level.
The government has simplified the process for global retailers to enter India. Will this affect manufacturing or retail in India?
We always lay out red carpets for foreign companies, not only in textiles, but for other industries too. There should be a level-playing field. This will also be highlighted in the white paper. The policies and ease of doing business provided to international retailers and foreign investors must also be given to domestic companies. When a foreign company wants to invest, land is easily available, and the paperwork gets done in a few days. But when an Indian entrepreneur wants to do the same, the prices are high, and the paperwork is time-consuming. This is affecting the textiles and retail industry.
Has e-commerce helped small and medium enterprises, or changed the usual business pattern?
A company like Raymond can sell a shirt at ₹3,000 at different places across the country while many MSMEs sell one for ₹800. Their markets and target audiences are different. Selling beyond that will be difficult unless they provide quality products and market those, which is important to survive in the domestic as well as global markets. Another essential aspect is environmental compliance. Whether it is a small or big company, it has to become compliant, especially small ones-if they fail to do so, they will vanish. We have schemes for cluster development for environmental compliance. Under this, 50 per cent of the cluster development cost from land and construction to machinery is sponsored by the government through a subsidy, and the rest 50 per cent has to be borne by members of the cluster. And because it’s a cluster, the laws are liberal. But, non-compliance is no more an option. No small company can say that because I am small, I can pollute. The court, NGT, or an NGO will not accept it. There is a lot of awareness about protecting the environment. NIMBY-not in my back yard-is the mantra people go by. Every industry needs to deal with its own waste and pollution. No third party is liable for it.
What would be your expectations from the textiles policy?
The labour laws need to consider the fact that if a worker is not productive, the company can fire him/her. The laws need to be fair and not favour labourers by providing them protection. The government cannot keep neglecting this. Other countries have stricter rules to hire and fire. No company is going to fire workers unnecessarily, since there is a shortage of manpower. But a worker can be fired for misconduct or wilful mistakes. This freedom is needed for the growth of the industry.
What would be your concluding thoughts?
Farm to Fashion is GCCI’s first event of this kind. We hope that the global summit gives life to the textiles industry. We are expecting the government to become a part of this. They have shown their inclination to join our conferences. If every state identifies its core strength across the textiles value chain and works towards developing them, we can reduce our imports and increase revenues. (HO)