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India’s Tamil Nadu Textile Industry Wants to Move Up Value Chain

The textile industry in Tamil Nadu, a southern state in India, is looking to move up in the value chain with its potential dependence upon the central government, according to D. Prabhu, secretary of Texpreneurs Forum, Coimbatore.

Prabhu spoke at a conference titled, “Make in India-textile industry-opportunities & challenges,” which was organized by a group of textile associations in Western Tamil Nadu. He explained that the spinning mills in the state accounted for consumption of 30 percent of the cotton produced in the whole country, according to The Hindu Business Line.

He added that the troubles being witnessed by Russia were not only temporary, but offered a huge market for the Indian textile sector.

Tamil Nadu’s share of yarn exports is nearly 60 percent of the whole country’s exports. The industry accounts for exports of textile goods worth 75,000 crore rupees ($11.8 billion) a year. The value-added garments’ export was worth 30,000 crore rupees ($4.7 billion).

According to The Hindu Business Line, Prabhu said despite the state’s achievements, “the industry has also been facing several headwinds in the past four or five years like the unprecedented fluctuation in cotton prices and competition from countries like Pakistan, Bangladesh and Vietnam in garment export. There were also opportunities galore with economic boom leading to market expansion in India.” He added, “The different segments in the entire textile value chain-from spinning to knitting, dyeing, weaving etc. engaged professional experts to study issues concerning the sector that threw up three important issues.”

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Prabhu explained three key issues that affected the textile sector, including the impact of bilateral trade agreements between countries in the industry. He added that the industry wants textiles to be included in the India-Latin America trade agreement. “Though Indian textile industry has a sizeable share of EU market, it was facing threat from competing countries that enjoy preferred duty treatment,” he noted.

As reported by the Hindu Business Line, Prabhu said, “Barring clusters like Karur and Tirupur, others in Tamil Nadu in the textile sector were lower on the value chain because of which their margins were very thin. Unless the manufacturers in this sector moved closer to the customers by adding value to their products, they would not be able to bear the relentless cost increase.”

Thus, the aim of the industry participants was to move up to be at the top of the value chain. There were weaknesses, such as processing, that they wanted to be addressed so that the industry could reach its full potential. He said the textile ministry was “endorsing our view” and had already discussed issues with the Union Textile Minister and Textile Secretary.