The Indian cotton textile industry has been losing its sheen on various fronts. From weaving and processing to rising labor costs, inconsistent fiber policy, delay in signing free trade agreements, have all pushed the cotton textile industry to a tight spot.
The garment sector in the textile value chain is at its lowest ebb, losing out to low cost countries such as Vietnam and Bangladesh, as they enjoy least developed countries status. The spinning sector has established a benchmark, but scaling is required in post-spinning operations, particularly in weaving, processing, knitting and garmenting. There is a need to scale up garmenting. Lack of access to capital and the size of operations have put them in a disadvantageous position.
The knitwear cluster has had to conform with various compliances such as ZLD and social compliance, which, in turn, have resulted in a 10 to 15 per cent rise in production cost, making the operations unviable. Price risk management is important for the cotton sector. The market size is huge, at Rs 65,000 crores, but in 2017-18 the risk cover was only to the extent of Rs 9,000 crores. There is a need for the industry to utilise the MCX platform more aggressively.