Article >> Indian Textile Engineering Industry under XIIth Five Year Plan

Indian Textile Engineering Industry under XIIth Five Year Plan

By

Mr. S. Chakrabarty

Secretary General

 

The Textile Engineering Industry’s (TEI) vision is to build up a strong TEI that can grow, compete, and export; which would provide strong support to the Indian textile industry, to make it vibrant, and competitive. It would  acquire technological strength in all sectors, as we already have in spinning, and meet 70-75% of the demand of Indian textile industry for high tech machinery, from the current position of 45-50% with continuous capacity scale-up commensurate with increased demand. India would become a manufacturing hub for textile machinery, parts/components and accessories, contributing further to employment generation & GDP.

Can this vision be translated into a mission by all the stakeholders and the Government? Let us analyse the position.

Status

Over the period of last 6 decades, the TEI had built up an annual estimated capacity of over Rs. 9,000 crore of complete machinery and other equipment, right from opening up of the fibres to the production of finished fabrics with an investment of Rs. 7,500 crores. There are 1,446 units, 598 units manufacturing complete machinery and 848 units making parts and accessories.   More than 80% of the units are SMEs. It provides employment directly or indirectly to > 250,000 people.

It is needless to mention that since inception the TEI has been contributing greatly to the competitiveness of the Indian Textile Industry (TI) whose main constituent is ginning, spinning, weaving and processing. Though garment and knitting sector made their progress during 1980s onwards, due to the SSI reservation policy of the Government the machinery manufacturing for the same by the domestic companies did not take place.

Production

CATEGORY

2007-08

2008-09

2009-10

2010-11

2011-12(P)

SPINNING & ALLIED MACHINES

3662.22

2417.44

2105

3500

2570

SYNTHETIC FILAMENT YARN MACHINES

625.3

412.79

830

900

925

WEAVING & ALLIED MACHINES

621.64

410.35

495

600

480

PROCESSING MACHINES

635.19

419.29

460

700

750

MISC. (SPINNING, WEAVING & PROCESSING) MACHINES

185.26

122

120

150

100

TEXTILE TESTING & MEASURING INSTRUMENTS

121.86

80.43

30

50

65

HOSIERY MACHINES/ HOSIERY NEEDLES

50.46

33.31

35

50

20

TOTAL OF MACHINERY

5901.93

3895.61

4075

5950

4910

SPARES & ACCESSORIES

253.07

167.39

170

200

370

GRAND TOTAL

6155

4063

4245

6150

5280

% INCREASE/ DECREASE

7%

-34%

4%

45%

-14%

P= Provisional

 

The production of textile machinery has been suffering from demand recession over the last fewyears.  It has adversely affected the growth of the TEI significantly.  The capacity utilization of the industry which increased during 2004-05 to 2007-08 fallen in the subsequent years due to demand recession. A turnaround has happened during 2010-11 with a positive growth of 45% over 2009-10. But it was short lived and there has been a fall in production during 2011-12 to the extent of 14%.

 

Capability

The entire range of spinning machinery is manufactured in India, including ginning, blowroom machinery, cards, draw frame, combers, speed frame, ring frame, ancillary machinery, two for one twisting and auto-cone winding machines and parts and accessories of international standard.

Weaving preparatory machinery i.e. high speed sectional warping, direct warping and sizing are by and large matching up with world class technology are exported to several countries. Majority of parts and accessories for weaving preparatory machinery and weaving machinery are manufactured in India.

The TEI in India has developed shuttleless rapier looms, airjet looms and waterjet looms. India is the largest manufacturer of plain and automatic looms. Shuttleless rapier looms, airjet looms and waterjet looms are also being manufactured. There is still a technology gap in the main weaving looms (shuttleless loom category) used for weaving. The reluctance of the domestic textile industry to buy the indigenous machines and their preference for the secondhand shuttleless looms supported by the Government has adversely affected the domestic development.

Almost the entire range of processing machinery is now being manufactured in the country, with continuous scouring, bleaching, mercerising, washing, dyeing plants, preshrinking ranges and more, being produced by domestic manufacturers. The indigenous machinery available now competes on an even footing with their European counterparts with low liquor to material ratio, and is capable of processing fabric with comparable results at a very reasonable cost.  Many critical electronic components and equipments are still imported. All other types of parts and accessories are also made in India. In this category almost 50% of the requirement is fulfilled. The technology gap is getting reduced due to indigenous development and FDI in the processing sector.

Today a wide range of high quality latest generation testing and monitoring equipment is being manufactured in the country. Almost 80% of the requirement is met by the domestic manufacturers.

Synthetic yarn and fabric processing machinery viz. draw texturising machines, draw twisters, two-for-one twisters for filament yarn, zero-twist filament sizing machines, rewinders and precision cone winding machines are made here. With the development of such machinery indigenously, the industry is not only catering to domestic demand but is also exporting the same. Here the percentage share of demand is 80-90%. 

In jute machinery the percentage share of demand met by local manufacturers is over 60%. There are half a dozen good manufacturer of jute machinery in the eastern sector. Many items of jute machinery are being manufactured in the country. The total capacity may not exceed Rs. 70 crores.

Items not manufactured

Hi-tech garment making machinery and knitting machinery are not made in India. There is of course no shortage of ordinary domestic sewing machines and low tech knitting machines. The decentralized character of the hosiery and garment sector was not conducive for indigenous development.

The capacity of domestic hosiery and garment making machinery is approx. Rs.70 crores.

Similar is the case of nonwoven and technical textiles machinery. There was very little demand in the past. However there are many technical textile items which are being manufactured in indigenous machines e.g. Glass fiber fabrics, fish nets, mosquito nets, filter fabrics etc.

Current Status

Total world demand for textile machinery estimated at about 30 bn USD in 2010

 

Current Status

India based production of textile machinery is still minor in most segments

12th Plan Target

     Target size and growth rate

TEI is projected to grow from Rs 8000 Cr to Rs 14300 Cr during XIIth Plan at CAGR of 15.1% based on commensurate growth of Indian textile industry and expected policy interventions.

 

                                                                       (Value in Rs Cr)

 

2012-13

2013-14

2014-15

2015-16

2016-17

Sales Value of domestic production

8000

9400

11000

13000

143000

Exports

800

900

1000

1100

1200

Domestic Consumption

7200

8500

10000

11900

13100

Target employment levels:

 

Existing employment (Direct & Indirect) in TEI is expected to grow from 2.85 lakhs to 4.27 lakhs during XIIth Plan however being a capital and technology intensive sector the principal gains will be in value addition & import substitution:

 

 

2012-13

2013-14

2014-15

Direct employment

85000

95000

142500

Indirect employment

165000

190000

285000

Target technologies to be developed:

à      Acquire know how related to:

?High end compact spinning

?High speed OE 

?High speed winders

?High speed woolen / worsted frames

?Air Jet technology

?Extruders

?Spinning beams

?Godets

?Winders

?Opening, Cleaning, Blending

?Spinning

?Filament yarn testing (on / offline)

?Shuttleless looms (rapier >400 rpm; air jet > 800 rpm; water jet > 800 rpm)

?   High speed circular knitting machinery (Microprocessors)

?   Warp knitting

?   Environmentally sustainable processing

?   High speed wide width processing

?   Special purpose processing and finishing machinery (e.g. plasma-finishing)

?   Hi-tech industrial stitching/sewing machinery (lockstitch, overlock, coverstitch, bar tacking, pocket set, button holes, etc.)

Issues

à        Technology Gaps: Particularly in Technical textiles/nonwoven machinery, Hi-tech machinery in weaving, knitting and processing and jute machinery, Machinery for environmental protection, and conservation of energy and design of machines

à        Lack of sustained demand from the user sector

à        Cumbersome procedure for refund of terminal excise duty encouraging the EPCG license holders to import the machinery

à        Large scale import of second hand weaving machinery of outdated technology

 

THE NEED OF THE HOUR – The Government’s strategy to enhance the competitiveness of the TEI should be to ‘Reduce the Technology Gap’ by following measures.

1)     SHORT TERM MEASURES

  • Facilitate FDI through pro-active FDI policies
  • Encourage/force foreign manufacturers to set-up manufacturing base in India through appropriate restrictions in imports of complete machinery
  • Facilitate foreign collaborations through liberal policy for royalty payment etc.
  • Financial support to the domestic manufacturer for development of hi-tech machines(SMEs)

1.     By cash support

2.     By credit support

3.     By marketing/business development support

4.     By reducing the duty on raw-material, components & accessories

  • The Government Schemes and tax holidays to create an enabling environment
  • Technology Upgradation Fund for the Textile Engineering Industry with interest subvention to achieve the long term goals
  • Providing a level playing field

1.       Streamlining of duties and taxes across the board, to ensure no additional burden on domestic manufacturers (compensating the additional burden of duties & taxes like octroi, sales tax(VAT) and other local taxes and Transaction Tax)

2.       Duty free import of components and accessories by the machinery manufacturers

3.       Higher depreciation at 25% for manufacturing hi-tech machinery

2)     LONG TERM MEASURES

·         Setting up common facility Centre/s

1.       Infrastructure for product/prototype development

2.       Infrastructure for testing facility

3.       CAD/CAM Design Centre (Design Boutique)

4.       Training Centre

5.       Miscellaneous office infrastructure

6.       Provision for sustaining the Centre for Five years

  • Developing the existing clusters like Coimbatore, Surat, Ahmedabad, Mumbai, Panipat, etc. with common approach for Capital Goods sectors
  • Promoting Research & Development

1.       Strengthening the existing facilities by adequate funding

2.       Setting up facilities in existing institutes

3.       Specific scholarships to research students for textile machinery related projects

4.       Tie up with foreign Research institutes for proper cooperation

5.       Special incentives for innovative designs and product development for individuals  and private companies

6.       Exemption from income tax on expenditure on R&D by any manufacturing company

  • Human Resource Development

1.       Strengthen the technical institutes to impart practical training after degree and diploma to make them employable directly

2.       The industrial training institutes should be strengthened to be more industry oriented. “Train the trainer” program viz. teaching staff of ITIs and colleges should also receive training in modern textile machinery technology

3.       Stipends for the trainees from the rural areas and adivasis preferably with hostel facilities at subsidized cost

4.       Textile engineering concentric training set up in the existing clusters( Set up training institutions exclusively for textile machinery impart practical training and knowledge)

5.       An in-depth study of the skill gaps and needs

6.       Draft new curriculum for certificate, diploma and graduate courses

7.       Introduce new courses in technology in engineering colleges, IITs and similar institutions.

8.       Include CMTI in designing and running higher degree courses in manufacturing technology

9.       Centre of Excellence for developing managers, leaders and visionaries for the industry be set up which will serve the entire manufacturing industry in the country

10.    Regular exchange program between academia and industry experts

MISCELLANEOUS

  • Policy guidelines to banks/financial institutions to extend financial support to TEI
  • Some specific incentives for the growth of TEI
  • Second hand Textile machinery import

1.       Discourage import of 2nd hand machinery for modernisation

2.       Channelize used machine imports through two designated ports

3.       Levy a uniform custom duty of 30% on used machine imports

4.       Disallow depreciation on used machines

5.       Impose “actual user” conditions on importers

6.       Limit the vintage of 2nd hand machinery to 5 years only

  • Discourage cheap imports by providing necessary safeguard measures
  • Removal of  existing cumbersome procedures for refund of terminal excise duty for purchases of textile machinery under EPCG license from domestic supplier which indirectly encouraging the EPCG license holders to import the machinery
  • Excise duty on all textile machinery items including parts, components and accessories may be kept at a level of 8%
  • Customs duty on all textile machinery items including parts, components and accessories may be kept at a level of 7.5%
  • Customs duty on all critical components and accessories of textile machinery may be kept at zero.

EXPORTS

  • Easy availability of MDA through Textile machinery Export Promotion Council(to be formed & run by TMMA in Mumbai with own funding or funding from Industry)
  • Special assistance for participation in international textile machinery exhibitions

The XIIth Plan Target could be achieved only if Government becomes proactive, the Textile Industry and the Decentralized Powerloom Sector are supportive to the domestic textile machinery manufacturers.

 

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