Picking up the threads

Similarly, in the fast growing technical or industrial textiles segment, India is a non-entity. In the top 10 lines in this area, India’s exports were $0.7 billion in global exports of over $80 billion. The PLI is focussed on these remarkably weak links in the textiles value chain. The question, however, is whether the scheme will work well for an industry where MSMEs account for 60 per cent of overall output. Textiles Secretary Upendra Prasad Singh has said that as part of the two-tier PLI, a threshold of Rs 100 crore will suit apparel makers, whereas a higher threshold of Rs 300 crore will benefit spinners of yarn who want to get into weaving and processing. However, it is worth considering whether a Rs 100 crore threshold will exclude many who wish to expand their operations, perpetuating the fragmentation in the sector. That said, the MMF weavers can become competitive with the withdrawal, last month, of anti-dumping duty on viscose staple fibres. India’s local production is way too expensive compared to China even as it produces the basic petrochemicals. China has over time created scales in synthetic textiles, accounting for about 40 per cent of global MMF trade.

Efforts to create an indigenous synthetic yarn sector through tariff protection have merely resulted in an uncompetitive MMF apparel sector. Transformation in textiles cannot come about through PLIs alone. Mega textile parks, envisaged in Budget 2021-22, will reduce overheads, and should be implemented on priority. India should forge FTAs with countries like Britain, Canada and Australia. Textiles, generally regarded as a sunset sector, have been given the attention it deserves. The critical part is to ensure that the PLI clauses enhance the industry’s competitiveness. The success depends on roping in smaller units and incentivising their role in enhancing the quality and quantity of production lines.