NEWS BRIEFSThe Cotton Textiles Export Promotion Council Speech by Amit Ruparelia, Chairman at the 57th AGMFull text of the speech by Shri Amit Ruparelia, Chairman, TEXPROCIL at the 57th Annual General Meeting held in Mumbai on 30 September, 2011 is reproduced below : Friends, It gives me great pleasure to extend a warm welcome to you at the 57th Annual General Meeting of our Council. The 57th Annual Report and Audited Accounts along with the Auditor’s Report for the year ended 31st March 2011
NCM-NOVEMBER 2011 NEWS BRIEFS 88 Friends, It gives me great pleasure to extend a warm welcome to you at the 57th Annual General Meeting of our Coun- cil. The 57th Annual Report and Au- dited Accounts along with the Auditor’s Report for the year ended 31st March 2011, setting out the fi- nancial statement and major activities undertaken by the Council during the year under review are already with you.With your permission, I take them as read. EmergingTrade Pattern The last few years have seen a pe- riod of considerable change in the glo- bal trading pattern.The economic ac- tivity across the World is increasingly shifting towards the emerging econo- mies in Asia, Far East and parts of South America. In the textiles sector, this is being manifested in a conver- gence between production and con- sumption centres as they shift tec- tonically from the Western countries to the Far East and China.Traditional markets in Europe and USA are ex- pected to adjust to these changing trends. These changes are resulting not only in realignment in the flow of goods and services but also in accel- eration in investments as the flow of capital covets new markets. The shift in balance of economic power is seen largely as an outcome of globalisation and prudent policies. This “rise of the rest” is a remarkable achievement, bringing with it unprec- edented improvements in living stan- dards for a majority of people espe- cially in developing economies. The Cotton Textiles Export Promotion Council Speech by Amit Ruparelia, Chairman at the 57th AGM Full text of the speech by Shri Amit Ruparelia, Chairman,TEXPROCIL at the 57th An- nual General Meeting held in Mumbai on 30 September, 2011 is reproduced below : At the same time for coun- tries like India and many such emerging economies, the challenge is to ensure that boom-like conditions do not yield to overheating in the coming year. Inflation concerns are likely to inten- sify as capacity constraints accentuate supply side pressures in the wake of high growth rates and rising demand. Trends In World Trade World trade recorded its larg- est ever annual increase in 2010 as merchandise ex- ports surged 14.5 per cent, Shri Amit Ruparelia Chairman,TEXPROCIL buoyed by a 3.6 per cent recovery in global output as measured by gross domestic product (GDP). Both trade and output grew faster in developing economies than in developed ones. Exports in volume terms were up 13 per cent in developed economies while the increase for developing econo- mies was nearly 17 per cent. The dif- ference between the trade of the de- veloped and developing economies was even greater on the import side, where developed economies' imports rose by 11 per cent compared with 18 per cent in the rest of the world. World merchandise exports in volume terms rose 14.5 per cent in 2010, while world imports grew 13.5 per cent. In principle, world exports and imports should increase at roughly the same rate, with some discrepancies due to differences in data recording across countries. World trade as measured by exports grew four times as fast as global GDP in 2010, whereas trade normally grows about twice as fast as GDP. Trade Scenario In India As we all know, Asia in the recent past witnessed a recovery that has ma- tured as both exports and domestic demand have fuelled rapid economic growth, which reached 8.3 percent in 2010. Growth is expected to be led by China and India, whose economies are projected to expand by 8.2 per- cent and 7.2 percent, respectively, in the next two years. The Indian economy rebounded strongly in 2010-11 from the modera- tion induced by the global financial crisis. However, several macroeco- nomic factors posed new challenges in 2010-11. Both, fiscal and monetary policies worked in tandem to pull the
Transcript
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Friends,
It gives me great pleasure to extenda warm welcome to you at the 57thAnnual General Meeting of our Coun-cil. The 57th Annual Report and Au-dited Accounts along with theAuditor’s Report for the year ended31st March 2011, setting out the fi-nancial statement and major activitiesundertaken by the Council during theyear under review are already withyou.With your permission, I take themas read.
Emerging Trade Pattern
The last few years have seen a pe-riod of considerable change in the glo-bal trading pattern.The economic ac-tivity across the World is increasinglyshifting towards the emerging econo-mies in Asia, Far East and parts ofSouth America. In the textiles sector,this is being manifested in a conver-gence between production and con-sumption centres as they shift tec-tonically from the Western countriesto the Far East and China.Traditionalmarkets in Europe and USA are ex-pected to adjust to these changingtrends. These changes are resultingnot only in realignment in the flow ofgoods and services but also in accel-eration in investments as the flow ofcapital covets new markets.
The shift in balance of economicpower is seen largely as an outcomeof globalisation and prudent policies.This “rise of the rest” is a remarkableachievement, bringing with it unprec-edented improvements in living stan-dards for a majority of people espe-cially in developing economies.
The Cotton Textiles Export Promotion CouncilSpeech by Amit Ruparelia, Chairman at the 57th AGM
Full text of the speech by Shri Amit Ruparelia, Chairman, TEXPROCIL at the 57th An-nual General Meeting held in Mumbai on 30 September, 2011 is reproduced below :
At the same time for coun-tries like India and manysuch emerging economies,the challenge is to ensurethat boom-like conditions donot yield to overheating inthe coming year. Inflationconcerns are likely to inten-sify as capacity constraintsaccentuate supply sidepressures in the wake ofhigh growth rates and risingdemand.
Trends In World Trade
World trade recorded its larg-est ever annual increase in2010 as merchandise ex-ports surged 14.5 per cent,
Shri Amit RupareliaChairman,TEXPROCIL
buoyed by a 3.6 per cent recovery inglobal output as measured by grossdomestic product (GDP). Both tradeand output grew faster in developingeconomies than in developed ones.
Exports in volume terms were up 13per cent in developed economies whilethe increase for developing econo-mies was nearly 17 per cent.The dif-ference between the trade of the de-veloped and developing economieswas even greater on the import side,where developed economies' importsrose by 11 per cent compared with 18per cent in the rest of the world.
World merchandise exports in volumeterms rose 14.5 per cent in 2010, whileworld imports grew 13.5 per cent. Inprinciple, world exports and importsshould increase at roughly the samerate, with some discrepancies due todifferences in data recording acrosscountries. World trade as measured
by exports grew four times as fast asglobal GDP in 2010, whereas tradenormally grows about twice as fast asGDP.
Trade Scenario In India
As we all know, Asia in the recent pastwitnessed a recovery that has ma-tured as both exports and domesticdemand have fuelled rapid economicgrowth, which reached 8.3 percent in2010. Growth is expected to be ledby China and India, whose economiesare projected to expand by 8.2 per-cent and 7.2 percent, respectively, inthe next two years.
The Indian economy reboundedstrongly in 2010-11 from the modera-tion induced by the global financialcrisis. However, several macroeco-nomic factors posed new challengesin 2010-11. Both, fiscal and monetarypolicies worked in tandem to pull the
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Indian economy quickly and firmly out of the slowdown.Even as growth reverted to its trend, new challengesemerged. Despite its recovery, inflationary trends andvolatility in commodity prices led to strong demand sidepressures on the Indian economy. The country’s eco-nomic strength was being continuously leveraged forattracting larger capital flows and foreign direct invest-ment.
Hon’ble Minister of Commerce and Industry Shri AnandSharma took over the additional charge of the Ministryof Textiles in the month of July 2011. The entire textilefraternity hopes that under the new leadership this vi-brant sector will get the attention due to its needs inthese trying times.
Global Trade In Textiles & Clothing
The World trade in Textiles & Clothing is estimated togrow by 10.82 per cent for the year2010, playing a significant role in to-tal merchandise trade with a share ofaround 4 per cent. The trade is esti-mated at a level of US $ 584 Billion inthe year 2010 marking a growth of10.82% over the previous year’s levelof US $ 527 billion.
During 2010, US imports of Textiles& Clothing showed a growth of 21.26per cent inTextiles and 12.80 per centin Clothing – the overall growth inTex-tiles & Clothing sector being 14.72 percent.The trends in the first six monthsof 2011 shows that the textile andclothing sector recorded an overallgrowth of 12.89%.
In EU (27), the combined imports ofTextiles & Clothing grew by 6.62 percent.While Textile trade grew by 19.53per cent, Clothing grew by 2.64 percent during 2010. During the first sixmonths of 2011, combined imports oftextiles and clothing products in Eu-ropean Union grew by 26.63%.
While the first six months of the cur-rent year have shown reasonable goodgrowth in imports into EU, there areconcerns as to whether these trendscan be sustained during 3rd and 4thquarters of the current year.
Exports Of Cotton Textiles
During the year 2010, the WorldTrade
in Cotton Textiles accounted for43.27 per cent of the totalTrade.Cotton Fabrics accounted for54.25 per cent share of thistrade, followed by 34.90 per centfor Made-ups and 10.85 percent forYarn.While Cotton Fab-rics dominated World Trade incotton textiles, Cotton Made-ups held the largest share (44per cent) in India’s Trade fol-lowed byYarn (38 per cent) andFabrics (18 per cent).
As per the Council’s estimatesthe exports of Cotton Textiles(i.e. Cotton Yarn, Fabrics andMade-ups including Handloom)are expected to reach a level ofUS $ 6,840 Mn, during the pe-riod 2010-11 as compared toUS$ 5,644 Mn marking a growthof 16.67 per cent in Rupeeterms and 21.19% in Dollarterms over the previous year.
During the first quarter of the currentfiscal year 2011-12 exports of cottontextiles are reported to have registereda growth of 10% over the previous yearsame period.
CottonYarn
Within the textile basket, exports ofcotton yarn reached a level of 720
Million Kgs as compared to 586.76Million Kgs in 2009-2010. In volumeterms the growth increased by 22 percent and in dollar terms the growthwas 62 per cent rising from US $1614.76 Million (Rs. 75912.88 Million)in 2009-10 to US $ 2619.16 Million (Rs.118936.06 Million) in 2010-11.
It is to be noted that in spite of quan-
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SUMMARY DETAILS OF EXPORT AWARD FOR THE YEAR 2009-2010
titative restrictions cotton yarn exportsrecorded the highest growth amongstthe products under the purview of theCouncil.
Yarn export has since been broughtunder OGL with effect from April 2011.Prices in the world market havestarted to moderate and the downstream industry in various textileeconomies is looking forward to sta-bility in policies & prices.
As the largest supplier of CottonYarnto the world in value terms as well asquantity terms, India needs to be cau-tious of its external obligations aspolicy interventions imposing supplyside restrictions have a significantbearing on international trade. Thisfact was repeatedly brought to thenotice of the Council by many Over-seasTextile Associations and Federa-tions during interactions at variousFairs/Exhibitions and Meets.
Cotton Fabrics
Exports of Cotton Fabrics increasedmarginally by 1.64 per cent from US$ 1221 Million in 2009-2010 to US $1241 Million in 2010-11.The share ofCotton fabrics in the overall cotton tex-tile exports was 18 per cent.This sec-tor needs the attention of the Govern-ment to improve its competitivenessand share in India’s basket of textileexports as data shows that the worldtrades more in fabrics (both grey andfinished) than in yarns and fibres. It ishoped that the remodified TUFScheme with its emphasis on theweaving sector will provide impetusto fabric production and exports.
Cotton Madeups
Exports of Cotton madeups reacheda level of US $ 2980 Million in 2010-11 as compared to the previous year’sexports of US $ 2808 Million markinga growth of 6 per cent in the cottontextile trade. Considerable opportuni-ties exist to increase our exports inthis segment as we streamline ourefforts to augment our processingcapabilities.
HIGHEST GLOBAL EXPORTS :
Welspun Global Brands Ltd.Special Gold
Alok Industries Ltd.Silver
Abhishek Industries Ltd.Bronze
TOP EXPORTERS AWARD :
Yarn : Counts 50s and below
Nahar Spinning Mills Ltd.Gold
Vardhman Textiles Ltd.Silver
Nagreeka Exports Ltd.Bronze
Yarn : Counts 51s and above
Lahoti Overseas Ltd.Gold
Premier Mills Pvt. Ltd.Silver
GTN Enterprises Ltd.Bronze
Processed Yarns :
Kikani ExportsGold
Vardhman Textiles Ltd.Silver
Winsome Textile Industries Ltd.Bronze
Nahar Spinning Mills Ltd.Bronze
FABRICS :
Grey
Loyal Textile Mills Ltd.Gold
Vardhman Textiles Ltd.Silver
Paramount Textile Mills (P) Ltd.Bronze
Bleached/Dyed/Yarn Dyed/Printed
Alok Industries Ltd.Gold
Morarjee Textiles Ltd.Silver
The Asian Traders (India)Bronze
Denim
Arvind Ltd.Gold
Raymond UCO Denim Pvt. Ltd.Silver
K G Denim Ltd.Bronze
MADEUPS :
Bed Linen/Bed Sheets/Quilts
Alok Industries Ltd.Gold
Welspun Global Brands Ltd.Silver
Indo Count Industries Ltd.Bronze
Terry Towels
Welspun Global Brands Ltd.Gold
Abhishek Industries Ltd.Silver
Sharadha Terry Products Ltd.Bronze
Other Madeups
JVS ExportGold
Asia Fabricx Pvt. Ltd.Silver
Welspun Global Brands Ltd.Bronze
MERCHANT EXPORTERS’GOLD AWARD :
YARN :
Lahoti Overseas Ltd.
FABRICS :
The Asian Traders (India)
MADEUPS :
Welspun Global Brands Ltd.
SPECIAL ACHIEVEMENTGOLD AWARD :
Alps Industries Ltd. (In Yarn Category)Shrijee Lifestyle Pvt Ltd. (In Fabrics)
Indo Count Industries Ltd. (In Madeups)
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Data of registration of Contract forExport of Cotton Yarn (DirectorateGeneral Of Foreign Trade - ExportCel l)
Month Quantity in Million Kgs.
April 2011 71.36
May 2011 63.19
June 2011 54.079
July 2011 57.212
August 2011 97.734
Challenges : Old & New
In the recent past, as the cotton pricessoared, the chasm between realityand perception has come to dominatethe textile business. The perceptionof a shortage not only helped to feedpanic in the market, but also helpedsuppliers to push their customers forhigher prices. The reality, however,persists that there's plenty of cottonavailable at a competitive price.
Infact, in India, the textile trade con-tinues to reel under the pressures ofgenerating orders for stock in hand,maintaining demand-supply equilib-rium and increasing value added com-petence to improvise profits. Thoughthe order inflows in the initial fewmonths had raised hopes for a prom-ising year, the prevalent fact is thatthe departing crisis has left manyconsumers increasingly price-con-scious.
One of the prominent issues that per-sists is finding the right balance be-tween stocks, prices, domestic salesand exports of the “White Gold” viz.‘Cotton’! Instead of devolving into awar of speculations, the industryshould focus more on increasing theaggregate demand so as to encour-age the impulse for future growth.
As seen from the recent develop-ments in 2011, the textile industry isconfronted with a coalition of difficul-ties and opportunities. Despite strongbuoyancy in trade, in order to sustaingrowth, India needs to fur therstrengthen its external trade. Intra-Asian exports are seen as a growingsource for increasing the country’saffluence in trade. To fur therstrengthen its economic growth, In-dia needs to focus on increasing de-mand from the rest of the world asdomestic demand may suffer declineon account of high inflation and lowinvestment.To emerge as the winner,the Indian textile sector needs aboost–especially in its efforts to re-structure itself attract investments,and strengthening of supply chains.
This apart many old challenges re-main unaddressed even as new oneshave emerged. The only silver liningis that as per a recent IMF forecastthe advanced economies will grow atless than 2.4 per cent in 2011 and in2012 and the emerging and develop-ing countries at 6.5 per cent in bothyears.The apparent rapid recovery ofAsian economies, driven by a China-led regional economy, is supported bystrong domestic demand and an in-crease in people's spending.
Policy Initiatives
During the first half of the year 2011,the Government was engaged in anexercise to formulate theTwelfth Five-Year Plan. Different scenarios weredrawn up by Sub Group on Textilesand Apparel and the various commit-tees so formed.
In this regard the Committee on Ex-ports under my Chairmanship madea presentation to the Ministry of Tex-tiles.The Committee drew up two sce-narios one growth on a “business asusual” basis and secondly on achiev-ing “growth at a higher trajectory” withsolid policy support.
While in the first scenario exports areexpected to grow at a CAGR of 10per cent to reach a level of US $ 52billion by 2016-2017, in the secondscenario ex-ports can reachUS $ 65 billionat a CAGR of15.17 per centprovided theg o v e r n m e n tgives unfetteredpolicy support.
To achieve thetarget of US $65 billion by theend of theTwelfth five yearplan there is aneed to placeemphasis oncreating a
framework of policies cutting acrossvarious segments and sub segmentsof the sector. The Government on itspart must also ensure policy supportlike raw material availability at nearinternational prices, stable export Poli-cies, treating home textile sector atpar with the apparel sector for all ex-port benefits and simplification of pro-cedures to minimise transactioncosts.
The Hon’ble Minister of Textiles ShriAnand Sharma, after taking a com-posite view of the current scenario,recently announced the restoration ofthe DEPB benefits for cotton yarn from1st April, 2011 and on Cotton from 1stOctober, 2010.The decision has pro-vided the cotton fraternity with muchneeded relief.
While the step taken to restore DEPBrates on Cotton and Cotton Yarn arewelcome developments, we need toconstantly remind ourselves that thevalue added segments like Fabricsand Home Textiles should be the fore-runners in our export basket andshould commensurately receive dueattention and support. At no stageshould our competitors get the advan-tage of raw material supply (like cot-ton and cotton yarn) at a price lowerthan the domestic manufacturers.
That is why the Council has been
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propagating a modular incentive basedsystem, where the value added seg-ment gets proportionately higher levelof support than the raw materials.Thegovernment has also embarked uponan ambitious plan to double thecountry’s exports in next five years.
Considering the export levels of fis-cal year 2010-2011, the target for thissector has been fixed at US $ 7 bil-lion in the fiscal year 2011-2012.TheTarget is extremely high consideringthe sharp decline in exports on ac-count of low demand, high inventorylevels and sharp drop in prices.
The Council however is making ev-ery effort to achieve the target of US$ 7 billion set for the year 2011-2012.
Looking Ahead
Friends, during my first year as Chair-man of the Council, I have tried toensure that the Council strengthensits position as an authority function-ing to increase the exports of CottonTextiles from India (comprising the fourimportant subsets of the value chaini.e. fibre, yarn, fabrics, and madeupsincluding entire home textiles rangemade from cotton and cotton blends).The Council, through its wide ambitof activities, aims to improve theindustry’s competitiveness and brandimage in the world markets.
The Draft National Fibre Policy hasperceptively observed there is a needto “ensure balanced growth of the en-tire sector by promoting all the fibresequally and equitably”.
As we strive to achieve excellence,in line with the policy, the Council re-quires not only reconciliation of theinherent conflicting positions faced bythe sectoral subsets recognising theirdynamic needs but also to work to-wards optimal ‘trade-offs’which wouldmaximize the benefits not only for the‘subsets’ but for the sector as a‘whole’.
Amidst these developments, the
Council played a proactive role andcommissioned a quick assessment ofvarious products and markets of im-portance to enhance Indian textilesexports. Our coordinated efforts inrepresenting the needs of Indian ex-porters were well accepted and wewere successful to a large extent inmeeting the policy objectives.
Policy Recommendations
The Council continued its efforts andheld a series of meetings with theconcerned authorities to sensitise theGovernment on the current woes ofthe stakeholders in the textile indus-try. The representations made in thisregard included some important is-sues like expressing grave concernson the EU proposal to grant duty con-cessions to Pakistan; request for im-mediate commencement of restruc-turedTUF Scheme and increasing theoutlay for the sector; review of thecurrent situation of exports of CottonYarn and the need to publish detailsof Contracts & Exports Registered soas to enable exporters to keep trackof export performance in leading mar-kets; representation for the Extensionof Market Linked Focus ProductSchemes to Made Ups/Home Fur-nishings covered under Chapter 63;suggestions regarding the ProposedDuty Drawback rates for the Year2011-2012; request for an early inter-vention to mitigate the impact of highinterest rates and transaction costsamongst others.
Protectionist Measures
The Council, on its part, continued tostay watchful about the efforts to im-pose various protectionist measureson India’s textile trade initiated throughSafeguard action or imposingCountervailing Duties or by simplyincreasing Import Tariffs, from coun-tries like Indonesia, Turkey, Peru andKorea in recent times. The Councilactively opposed Indonesia andTurkey’s efforts to extend the safe-guard measures on cotton yarn fromIndia.Matter relating to ban on import
of cotton yarn from India to Peru forwant of Phytosanitary Certificate hasalso been taken up with the Peruvianauthorities. Discussions were alsoheld with the Korean Spinners Asso-ciation (SWAK) recently to dissuadethem from filing a complaint for initi-ating anti dumping/safeguard mea-sures on imports of cotton yarn fromIndia.
Government Support
Friends, I must acknowledge hereinthe support received from the variouspolicy formulations of the Ministry ofTextiles, which have favored inclusivegrowth through participatory develop-ment.The various policies formulatedwith objectives to maintain the incipi-ent export growth momentum, in-crease production and productivity incotton and cotton yarn, enhance theshare of value added segments, pro-viding employment opportunitiesthrough skill development et al., havesubstantially enabled the exportingcommunity to withstand therecessionary pressures and developcompetencies in the global market.
I must also mention that alongsidewith these initiatives, it would not havebeen possible to overcome the vari-ous challenges faced during my ten-ure as Chairman, without the valuablecontributions, support and encourage-ment received from all our members.I am confident that with the concertedefforts and continued guidance fromthe industry and trade, the Council willscale new heights of excellence in theyears to come.
Acknowledgements :
Before I conclude, I would like to takethis opportunity to place on record mysincere thanks on behalf of the Coun-cil and members of the Committee ofAdministration to Shri Anand Sharma,Hon’ble Minister for Commerce & In-dustry and Textiles for his encourag-ing support and benign counsel inexpanding exports. Our thanks arealso due to erstwhile Minister of Tex-
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tiles Shri Dayanidhi Maran. I also wishto convey our deep gratitude to Smt.Rita Menon, Secretary (Textiles), forher positive approach in resolving thevarious issues confronting the textilesector.
We are also grateful to Dr. RahulKhullar, Secretary (Commerce) andDr.Anup Pujari, DGFT for their con-structive approach and positive re-sponse to the various issues relatingto EXIM Policy.
We are also grateful to ShriV.Srinivas,Joint Secretary for his understandingof various issues and Shri A. B. Joshi,Textile Commissioner for his contin-ued support to the growth of the sec-tor. I would also like to convey my sin-cere thanks to Shri ManikamRamaswami, Deputy Chairman andShri R. K. Dalmia, Vice Chairman forsharing my responsibilities and mak-ing my task lighter and easier. I alsothank my colleagues in the Commit-tee of Administration and other Sub-Committees for their active coopera-tion and support.
Finally, I would like to thank ShriSiddhartha Rajagopal, Executive Di-rector and his team of Officers andStaff for carrying out their responsi-bilities with a sense of dedication andcommitment.
