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Indian textile sector set to bounce back despite uncertainties

The current global market conditions are more challenging, volatile and uncertain than it has ever been before. It is not just textiles but all businesses face uncertainties following changes in government policies, natural/ environmental calamities and other factors that are contributing to the volatility. Explaining his predicament Abhay Sidham, CEO, Batliboi Textile Machinery Group says 25 years back one could assume certain circumstances and make decisions and even keep back-ups for any possible leak or loop and sail through the storm smoothly. Today it has become extremely difficult to judge what would happen next and predict the exact market trend, changing preferences and fashions especially in terms of textile products. These fast-moving conditions are very difficult to tackle.

Unlike the well-organised spinning sector in India, the knits value chain is mostly decentralised and unorganised. One of the main disadvantages of the players in the Indian knits textile segment is their lack of competitiveness in production cost and quantity. India still does not have volume players (such as China) who can cater to a wide range of customers. Investment in the latest technology is another drawback if one is to fall in line with international standards. Besides, the demand for textiles is increasing exponentially.

Sidham further explains that to meet growing demand, the industry has to be more competitive in terms of volume and quicker deliveries to cope with the ever-changing fashion scenario. Before GST, the bottom of the value chain was not tax bound and paying an immediate tax of 18 per cent has created a major liquid cash crisis. However, from a long term point of view, as the impact of GST wanes it will be beneficial both for the business and customers.

GST’s impact is also evident on imported goods. When capital goods are imported, their input tax credit is much higher than the tax liability, posing a big challenge to the trade. Paying the tax amount proves difficult in most case and affects the financial condition of a company. This is a big issue for small entrepreneurs and growing businesses. Batliboi recently started representing a company called Danitech from Italy offering Softfow dyeing machines with very innovative concepts resulting in optimised water consumption and higher productivity.

 
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