Speaking @ 64th Annual General Meeting of the Textile Machinery Manufacturers' Association (TMMA) on September 19, 2024, Chairman M. Sankar shared his in-depth trade insights against transforming the Indian Textile Engineering Industry (TEI) landscape challenging trade to do its best.
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The event, well-attended by key figures from the textile sector, featured Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), as the Chief Guest. The discussions emphasized the critical role of technological advancement on the back of AI making inroads and the need for a foundational approach in shaping future paradigms.
Sankar began by addressing the global economic challenges affecting the TEI.
He outlined the growing impact of geopolitical tensions and impending global slowdown and the outlook of clouds on the horizon. Given the uncertainty and there is no way one can expect the government to subside the losses so the businesses will have to sort themselves out against the backdrop of moderating inflation, shrinking global trade leading to inventory buildups, and so on.
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India's TEI capacity utilization has dipped to 84 percent and, the export of textile machinery dropped by 14 percent in FY 2023-24 V/s the previous year only to be shielded by the domestic resilient parallel market.
Despite these global challenges, India’s domestic market has remained strong showing inherited fundamental resilience. The economy registered a robust growth of 8.2 percent in FY 2023-24, with inflation staying within the targeted range of Monetary Policy Committee (MPC), and what is discomforting is the fiscal deficit having reduced to 5.6 percent from 6.4 percent.
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Sankar alluded that, the fundamental to the performance of this industry has been on the back of improved tax compliance, economic activity which is started to show recipients signs of green shoots, and sound fiscal discipline demonstrated by the sector.
What is heartening is segments like spinning, processing, and spare parts witnessed positive growth, although overall industry turnover slowed in the latter part of the fiscal year, and the government's pitch of 'Make in India' (vocal for local) is securing the future.
Another observation is the K-shaped economic growth of the textile sector both domestic and in the globe amidst a challenging operating environment/volatility, while certain sectors performed well, the broader industry continues to grapple with roadmaps as we move ahead.
The Drive for Technological Modernization
A key focus of Sankar’s speech was the pressing need for modernization within the TEI. He called for closer collaboration between textile machinery manufacturers and their user industries, stressing that embracing advanced technologies and investing in research and development (R&D) is key for maintaining global competitiveness.
Competitive landscape; Sankar pointed out that countries like China and those in Europe have made significant strides in technological innovation, widening and deepening of product lines.
Contrary to this, given the structural contour of the Indian textile and machinery producing sector dominated by MSMEs of the world marred by limited financial prowess, lack of manufacturing excellence and heft, poor infrastructural capacity & capability, short on management bandwidth takes winds out of sails.
Risk management; Sankar also addressed the criticality of making structural changes as the demand in TEI per se happens to be cyclical leading to financial instability and operational inefficiencies. He suggested there is a dire need for spreading machinery orders more evenly throughout the year so that risks are evenly divided besides helping reduce costs in pursuit of sustainable business.
Sankar urged the government to step up investments in R&D and technology, warning that without such support, India risks falling further behind its global competitors.
Though it has to be appreciated the positive policy interventions with a considered view and the ministry staying engaged with its intent very clear, initiatives like the Production Linked Incentive (PLI 2.0) Scheme and the PM MITRA Scheme to boost infrastructure triggering the scope of the scale of business designed to create jobs, besides possible fallout of reducing India's reliance on imported machinery given the need for closing the technological gap with global leaders, specifically in areas like weaving and processing can be a game changer.
Call to action: Collaboration..collaboration..collaboration
Packing a punch by alluding In his closing remarks, Sankar emphasized that the pursuit of excellence is driving the importance of collaboration between the TEI and the broader textile industry at all levels.
Some of the levers of growth are government support, disruptive innovation @ scale, and the stress on continued research embracing modernization and technological advancements promising to take Indian manufacturing to its rightful place which has been languishing all these years,
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