CITI’s 60 years of outstanding service to textile industry
Sanjay Jain and his team have successfully tackled all major challenge.
The Confederation of Indian Textile Industry (CITI) has completed 60 years of service to the industry and trade. CITI represents the leading regional and industry associations and 18 corporate members, thereby covering the entire textile value chain, from farm to garments and made-ups to the textile machinery industry.In the last six decades, CITI has been representing the Indian textile industry both in domestic and international forums. It has played an important role by representing the interests of the textile industry to the Government and in formulating policies that support its sustainable, long-term growth.
The Indian textile industry has always had its share of ups and downs due to domestic and international factors. The last 12 to 18 months have been very challenging with the demonetization and the GST roll out affecting the industry in the short term, particularly MSMEs. It is at this difficult juncture that Mr. Sanjay Jain, Managing Director of T.T. Ltd., took over as CITI Chairman in September 2017. Mr. Jain has been ably assisted by Mr. T. Rajkumar and Mr. D.L. Sharma.
We would like to mention here that the Chairman, members of the Committee and the Secretariat have worked tirelessly in actively engaging with the Government and ministries in protecting the interests of all stakeholders.
While taking over, Mr. Sanjay Jain had stated that his priority would be to strongly pursue the important issues of the textile industry so that it gets the much-needed push to move to the next level and enlarge a significant global player. True to his words, he has been relentlessly pursuing issues right from the day he took over. It has been a hectic year for the young Chairman, representing the interests of the entire textile industry, jumping from one issue to another.
We caught up with Mr. Jain, amidst his busy schedule, and got to know about the various issues affecting the textile industry and the apex body’s initiatives. He is the Managing Director of T.T. Ltd., a vertically integrated textiles company (fiber to fashion) having its manufacturing units in different States of the country. A double gold medalist from IIM, Ahmedabad, and a rank holder Cost Accountant and Company Secretary, Mr. Jain is CITI’s youngest ever Chairman.
He is also the Chairman of NITRA and the Textile Skill Council, as also the immediate past Chairman of NITMA, Vice President of FOHMA and WBHA. He is also on the Committees of TEXPROCIL, SIMA, CAI, ICC, MCCI and various other bodies.
The CITI Chairman gave detailed insights into its various initiatives, the impact of the demonetization and the GST roll-out on the industry, his efforts to enable collaborative representation, areas of concern for the textile industry, support from the Government, CITI’s Diamond Jubilee celebrations and the outlook for the industry, among others.
Most of the large industries in India, in sectors like IT, Pharma or Automobile, normally have one or two associations of its member-companies, which represent the larger interests of the industry and its members to the Government and help in formulating key policies. The textile industry is quite unique as there are nearly two dozen associations representing the industry across the value chain, from fiber, yarn, fabric to garmenting. It is particularly challenging to come up with one policy that satisfies all. What is favorable to fiber manufacturers may harm the interests of yarn manufacturers, and the same logic holds good for the fabric and apparel or finished goods manufacturers in the value chain. Hence, traditionally, individual associations have always represented their concerns directly to the Government.
Given the sheer size and diversity of the country’s textile industry, it is often difficult for it to be heard as one voice. This is one of the areas where Mr. Jain has been working on diligently. He has taken a conscious effort to connect all the stake-holders and represent to the Government its problems in one voice. This has definitely helped in solving some of the issues, particularly related to GST and import duties.
CITI has also worked along with other national-level associations to form its National Committee on Textiles and Clothing (NCTC) where some of the most important people in the textile industry sit and discuss issues. The point at the end of the day is that “the industry should benefit”.
One advantage which Mr. Jain has is that he has been part of other key industry associations. “I am the Chairman of NITRA, immediate past Chairman of NITMA and Vice President of FOHMA and WBHA. I am also in the committees of TEXPROCIL, SIMA, etc. I have got excellent relations throughout the country with various stakeholders of the industry. I guess being well connected both segment-wise and region-wise helps when it comes to initiating and carrying forward collaborative initiatives,” he noted.
It was in September 2017 that Mr. Jain took over as CITI Chairman. How was the situation in the textile industry when he took over? He said: “It was challenging. I must say it has been hectic. Demonetization and GST were two major shocks for the textile industry. The SMEs were badly hit. The thing is that the bigger players can always take care of themselves and make themselves heard, but who will take care of SMEs? Demand was badly hit by demonetization.”
The CITI Chairman added: “Then came GST, which I would say is one of the best things to happen to our economy in the long run. However, in the short term there were a lot of issues such as job work being taxed, excise rules getting applied to textiles, segments such as fabrics being taxed, higher rates on MMF and cheaper imports from China and Bangladesh”.
CITI has been continuously engaged with the Textile Ministry in solving each of these issues one by one, taking into account the interests of all stake holders, from fiber to apparel manufacturers.
Fast forward to August 2018, Mr. Jain exudes confidence that the worst is over for the textile & clothing industry and it’s finally on the verge of a turnaround. With continuous support from the Government with a slew of measures on all fronts, there has been increase in exports of textiles and apparel from India. As per the quick estimates data by DGCI&S, exports increased by 11% in July 2018 over the same period last year.
Mr. Jain further said that a strong turnaround in the textiles & clothing sector is expected. He listed a few reasons for his confidence. First, the Scheme for Capacity Building in Textile Sector (SCBTS) named ‘SAMARTH’ of the Ministry of Textiles with a huge outlay of Rs. 1,300 crores, along with other parallel skilling programs by the Government, will go in a long way in reducing the skill gap of the industry and more specifically provide a value-added employment opportunity to rural women.
Second, the rupee depreciation by 10% in the last few months has made the industry competitive globally and imports dearer. The import duty on about 400 items has been raised, providing relief to the industry which was post-GST hit by huge imports in view of the significantly reduced import barriers. The Government also announced two important GST decisions in the last three months which allowed refund of excess ITC to the processing and fabric industry. This has reduced the cost of fabric by 3-4%, especially the MMF fabric. The easing of GST returns filing and other reforms have come as a big relief to the SME manufacturers.
Accelerating the refund of GST dues to the industry has eased the working capital pressure it and finally domestic demand picking up due to settling down of GST systems and rural demand picking up due to the MSP increase and good monsoons. All the above factors augur well for the Indian textile industry.
Mr. Jain is happy that the sustained Government support would put the industry back on track, and “we anticipate that textile and apparel exports will grow by 7% while imports stay flat in 2018-19.”
“We are indeed a unique industry. We are among the privileged few who have a separate ministry. We are unique because we are huge, we directly and indirectly employ more than 10 crore people. We are again unique because the skill level required is very minimal and, importantly, women, and that too rural women, play a key role. This is one industry which can lead to inclusive growth, enabling the Government to meet a lot of its objectives”, Mr. Jain stated.
He highlighted the fact that this year imports growth has come down significantly. While T and C imports have increased from $1.78 billion in April-June 2017 to $1.87 billion in the same period this year, an increase of 5%, it is significantly lower than the growth of 16% last year. The measures taken by the Government to increase the import duty on various textile and apparel items will help in further reducing imports in the coming months. Further, as per the RBI Financial Stability Report – June 2018, the stressed advance ratio of the textile subsector has also improved from 23.7% in September 2017 to 22.3% in March 2018, indicating signs of recovery.
Mr. Jain thanked the Minister of Textiles, Ms. Smriti Zubin Irani, for her continuous support to the textile and clothing industry by listening to the industry plea and resolving various issues. He also thanked the Prime Minister, the Union Minister of Finance, and all the concerned policy makers and tax administrators, including the GST Council, for the successful implementation of GST and addressing various GST-related issues.
Global Textile Conclave
Marking its 60th year, CITI is organizing an international conference, Global Textiles Conclave 2018 (GTC 2018) in New Delhi on November 27 and 28. The theme of the event is “Disruptions and Innovations for Sustainable Growth”.
Mr. Jain stated that the two-day event will witness interactions with global T&C businessmen, buyer-seller meets, exhibitions, award functions and the launch of special publications and reports covering the entire journey of CITI and the T&C industry. In a nutshell, it will cover the entire textile value chain from “FARM to FASHION” and will be one of the largest-ever textile industry events.
Mr. Jain further highlighted that the event will not only offer the participants the opportunity to interact with a very select group of 800-1,000 peers from the global textile & clothing industry, but will also provide them a platform to brainstorm, share and gain key insights over a period of two days into the present and future of this resurging, dynamic sector. GTC 2018 will be delineating the disruptive ideas, innovative technologies and best practices for a sustainable growth in the textile and clothing industry. It will have separate sessions with “Partner States”, “Partner Countries” and Senior Government officials.
CITI has invited the Prime Minister, Mr. Narendra Modi, to inaugurate GTC 2018, and Mr. Venkaiah Naidu, Vice President, to deliver the valedictory address on November 28, 2018.
He also disclosed that Mr. Suresh Prabhu, Union Minister of Commerce & Industry and Civil Aviation, and Ms. Smriti Irani, have already confirmed their valuable presence for the mega event.
Some of the leading international speakers who have already confirmed their presence include Mr. Kihak Sung, Chairman, Korea Federation of Textile Industries (KOFOTI), Mr. Han Bekke, President, International Apparel Federation, the Netherlands, Mr. Mark Green, Executive Vice President, PVH Far East, Hong Kong, and Dr. Christian Schindler, Director General, International Textile Manufacturers Federation (ITMF), Switzerland.
Mr. Jain added: “We are expecting a huge turnout of delegates not only from India and Asia but also from other parts of the world. More than 70 international associations have been invited, including the China National Textile & Apparel Council (CNTAC), the Bangladesh Garments Manufacturers & Exporters Association (BGMEA), and the Vietnam National Textile and Garment Group (VINATEX). Some important MoUs are also expected to be signed at the event.”
For the first time an innovation contest for the TandC industry has been launched in India. CITI has taken the lead to create an innovation culture by launching “InnoTex 2018”.
Mr. Jain said the contest will invite entries on innovative ideas/concepts devised for the best design, method, process, product and cost reduction in any area, from ginning to garment.
The CITI Young Entrepreneurs Group (YEG), under the chairmanship of Mr. Prashant Mohota, has been entrusted with the task of organising InnoTex. YEG, which is an integral part of CITI formed for nurturing young minds/talents of the industry.
Further, Mr. Jain was happy to announce that NITRA is the Knowledge Partner of the event. As premier research institute, it will help in the proper evaluation of the applications and provide guidance to the applicants.
CITI being one of the apex bodies of the textiles and clothing industry strongly feels that Innovation is the need of the hour for any industry to grow. InnoTex will give boost to the ideas of the Innovators by enabling them to showcase their talent to the industry leaders and get instant recognition. The contest will bridge the gap between the innovators and the end user industry and would further guide the researchers in realising the actual demand of the industry in these areas.
Time to negotiate
Talking about some of the challenges facing the industry, Mr. Jain disclosed that India’s huge trade deficit with China is a matter of great concern. It has increased from $51.1 billion in 2016-17 to $62.9 billion in 2017-18. The bilateral trade with China was $89.6 billion in 2017-18. India exported $1,362 million worth of textile and apparel products to China in 2017-18 while its imports stood at $2,905 million, indicating a trade deficit of $1,543 million. It is pertinent to mention that during 2010-11 to 2013-14, India was a net exporter of textile and apparel products to China. However, after that India’s trade deficit with China is constantly increasing.
Mr. Jain further said that if the level playing field is given to India like its competitors, it can double its exports and help in reducing the trade deficit with China. CITI has urged the Government to push negotiations with China to give duty-free access to Indian cotton textiles.
Another burning issue is imports from Bangladesh where there is a full exemption of basic customs duty, and hence Chinese fabric is easily coming to India duty free through Bangladesh in the form of garments. Until and unless the Government intervenes and puts a Rule of Origin clause, imports from Bangladesh will keep coming in the same pace and would affect the fabric as well as other segments of the value chain. In the last one year apparel imports from Bangladesh have increased 44% from $140 million in 2016-17 to $201 million in 2017-18. Hence, the urgent need for the Government to consider imposition of safeguard measures such as Rules of Origin, Yarn Forwarding Rules and Fabric Forwarding Rules on the countries that have FTAs with India to prevent cheaper fabrics produced from countries like China routed through these countries.
CITI – Cotton Initiative
CITI undertakes cotton development and activities through its extended arm – CITI Cotton Development & Research Association (CITI CDRA). Since inception in 1970, it has been involved in various initiatives in different parts of India for improvement in yield and production of cotton. A good example is the work that it has been doing in Rajasthan over a period of 10 years along with the State Agriculture Department, Bayer Crop Science and the regional textile mills associations in rain-dependent districts. It conducted front-line demonstrations and kisan melas for farmers for the spread and adoption of the latest production plant protection and crop management technologies.
According to Mr. Jain, the initiatives resulted in increase of cotton production in lower Rajasthan from 1.91 lakh bales in 2007-08 to around 13 lakh bales in 2017-18. In overall Rajasthan, it increased from 9 lakh bales to 22 lakh bales for the same period. The cotton yield in Rajasthan increased 79% from 415 kg of lint per hectare in 2007-08 to 744 kg in 2017-18. For the same time period, the average yield in project areas was 863 lint/ha as compared to the State average of 398 lint/ha. Under the same initiative a wide variety of ELS seeds are also being tested in Ratlam district of Madhya Pradesh.
Mr. Jain further said: “Recently, CITI, along with Bayer, is implementing the project in Maharashtra too where cotton growers are given information regarding sustainable growth of cotton, importance of preventing contamination, better use of fertilizers and modern farming methods like high density planting and drip irrigation. We have submitted photographs of the project to the Textile Minister with a request to replicate this on a larger scale. The Government needs to conduct similar projects and invest extensively on research in development of cotton seeds with better yield and productivity.”
The Textile Sector Skill Council (TSC) is promoted by CITI and approved by the National Skill Development Corporation under the aegis of the Ministry of Skill Development & Entrepreneurship. TSC is mandated to facilitate scalable “skill training” to the complete workforce engaged in the manufacture of textile and handloom products for the spinning, weaving, knitting, processing and handloom sectors.
Till date TSC has developed 88 Qualification Packs listing competencies for the respective job roles in the textile mills and handloom sector. Of these, 67 are NSQF aligned. TSC has 468 training providers and 20 assessment agencies accredited to carry out training and assessments respectively and has so far certified 1,22,734 candidates. It aims to fill the estimated skill gap for 2018-19 for spinning, weaving and knitting which has been estimated at 1,94,538, 50,728 and 820 respectively.
TSC has been conferred the “Award for Best Performance” for 2016 at the Silver Jubilee celebrations of the National Backward Class Finance Development Corporation (NBCFDC). It has also received the “Champion Sector Skill Council” Award from the Finance Minister, Mr. Arun Jaitley, at the Third Foundation Day Function of the Ministry of Skill Development & Entrepreneurship (MoSDE).
Asked to do a bit of crystal ball gazing and predict the outlook for the industry in 2018-19, Mr. Jain confidently said: “I can put my neck out and say FY 2018-19 is definitely going to be better than 2017-18. It may not be as good as desired, but we are already witnessing a turnaround”.
Mr. Jain thanked the Textiles Minister, Ms. Smriti Irani, for her continuous support to the textile and clothing industry. “The Minister is a fantastic person. One who tries to know the issues in depth, she is willing to listen. What is more, she even took us to other ministries. She also took us to meet Mr. Piyush Goyal. Similarly, she came with us to meet Mr. Suresh Prabhu. What more can you ask for? I would also like to thank the Prime Minister, the Minister for Finance, and all the concerned policy makers and tax administrators, including the GST Council, for the successful implementation of GST and addressing various GST-related issues”, he stated on a parting note.
By M.K. Prabhakar & K. Gopalakrishnan