According to the recent global economics prospects report by the World Bank, Indian economy is expected to grow at a rate of 7.5-8 per cent during 2010-12. In addition, according to this report, FDI inflows are expected to grow due to India’s efforts to relax investment limits in some sectors and the simplification of foreign direct investment procedures. The Asian Development Bank (ADB) emphasizes the importance of domestic consumption and infrastructural investments on the growth of Indian economy, meaning more opportunities for the technical textiles industry.
Status of the Indian textiles industry
The two main reasons which make the Indian textiles industry strong are: Export earnings and employment opportunities. India’s textiles industry employs some 35 million people directly and contributes 17 per cent to the total export earnings of the country.
Need for technical textiles sector in India
The competitive advantage that India had in terms of its labor cost has been eroding slowly and smaller nations such as Bangladesh and Vietnam due to cheaper labor and trade agreements with the US and Europe are gaining advantageous positions with regard to foreign trade. More recently, the decreases in the consumer spending and the global economic recession have forced the Indian textile industry to start thinking seriously about technical textiles.
The current value of the Indian technical textiles sector is around $8 billion. This means, India’s technical textiles sector has to nearly double in size in years ahead. All stake holders, i.e., industry and trade associations, Government, industry related trade associations and textile academia and working seriously to build a viable technical textiles sector in India. In this connection, the Government is playing a significant role in creating awareness and developing a knowledge base for the NWTT sector.
Market size of India’s technical textiles sector
ICRA, a management consultancy undertook the Government sponsored study and has estimated the current market size to be 398,760 million Indian rupees (~$8.86 billion). It is expected to grow at 11 per cent to reach a size of 664,050 million Indian rupees (~$14.76 billion) by 2012-13. The consumption will be slightly under the market size. The report divides the technical textiles sector into 12 segments as categorized by the TechTextil years ago. The largest segments are Packtech, Clothtech, Indutech and Meditech. The categorization of the nascent Indian technical textiles into 12 segments is premature and will cause confusions. There are several products that can fit well in many segments and such a categorization for an emerging market may not be suitable. In order to have an easier and useful segmentation from the point of view of marketing, a three way classification of the technical textiles sector have been proposed, namely, consumer products, institutional products and Government procurement products.
Consumer products include personal care, baby care and hygiene products. In this category, global brands such as Huggies and Pampers have penetrated into the market. Major players are P&G, Kimberly-Clark, SCA-Godrej and Johnson and Johnson. Products from these major international companies are predominantly sold in pharmacies and retails stores such as Birla’s More and Big Bazaars. The consumers who use these products are predominantly middle-income, upper middle class and those from the upper strata of the society. The cost and the lack of awareness prohibit the penetration of these products into the rural and low income areas. There will be a growth in the consumption of institutional products such as geotextiles, automotive textiles and hospital products.
What the Indian NWTT sector needs?
v There is an immediate need for the converting sector in India. Due to the growing domestic consumption and increase in wages, the need for consumer products at affordable rates will rise. International NWTT industry, machinery makers and trade bodies should look for win-win opportunities in the creation of converting clusters.
v India has adequate roll good manufacturers although not of high quality. The needs of the domestic market as of today can be met with the existing capacity. There are approximately 50 spunbond manufacturers with predominantly Chinese, Korean and Taiwanese machinery. The industry at present is reluctant to invest in high-end machinery as the market is not established and well built for marketing the products.
v Technical schools to educate and train skilled workers who can be employed in the growing NWTT sector are needed.
v Knowledge on converting roll goods to end-user products is needed. This also includes knowledge on chemical finishing and formulation developments.
v Marketing know-how and co-ordinated approach towards marketing are needed.
To sum up, in 2008, it was predicted based on the available GDP growth numbers for India from the World Bank, India’s NWTT sector will grow at a rate of 13 per cent in the following years. The Government sponsored market survey by the ICRA consultancy is forecasting a growth of 11 per cent per annum. In a general sense, the growth will be in double digits. As elaborated above, there is an emergent need to grow the converting sector, which will spearhead the growth of other segments of the NWTT sector. Machinery makers, fabric producers, fiber manufacturers and industry trade bodies should take note of the above immediate needs of the NWTT industry and the Indian market and engage in relevant trade talks and promotional activities.