29th may 2015 textile & textile engineering industry (tei) · bridge them – gherzi report....
TRANSCRIPT
National Workshop on
Sectoral Perspectives & Initiatives: Creating an Enabling Framework for Stimulating Investments in Manufacturing organized by FICCI at Ahmedabad
29th May 2015
Textile &
Textile Engineering Industry (TEI)
Mr. Prakash Bhagwati Chairman
Textile Machinery Manufacturers’ Association(INDIA)
2
Textile & TEI: Most eligible industries for
“Make in India” initiative
With abundant availability of raw material, skilled work force, established
installed base “Textile Industry” has great potential to generate.
Jobs at highest level
Earn valuable foreign exchange by exporting high value added
textiles & apparel.
To meet growing domestic demand of demographically young India.
-----
To support Textile Industry, it is imperative to develop “Textile
Engineering Industry (TEI) ” which needs to undergo technological up-
gradation at accelerated rate.
Competition for both industries from China & European countries is
rapidly declining on account of several reasons. Rising manpower cost
being the prime factor. Change in circumstances offers golden
opportunity for more than double digit growth.
TMMA(I), 29th May 15 : PKB
3
An overview of
Textile & Textile Engg. Industry (TEI)
It is envisaged in Draft Textile Policy “Vision 2024-25” that domestic sale of
textile industry should reach a production level of US$ 350 billion from the
current level of about US$ 100 billion. Further, India has the potential to
export textile & apparels worth US$ 300 billion by 2024-25 from its current
level of US$ 40 billion.
This would maximise employment generation and value creation within the
country. In the process, investment of about US$ 120 billion would take place
and about 35 million additional jobs would get created.
The TEI in India is one of the five key capital goods industries
Consists of more than 1400 units, with a total investment of Rs. 9,100 Cr
More than 80% of the units are SMEs
Installed Capacity of TEI, is Rs. 10500 Cr
Provides direct / indirect employment to > 285,000 people
Meets 45-50% of the demand of the Indian textile industry
* (Source: Textiles Committee Survey & TMMA)
TMMA(I), 29th May 15 : PKB
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Reasons for high import of Textile equipment rendering
poor domestic capacity utilization of TEI.
1) User textile industry is highly fragmented.
2) Slow modernization as user industry is not subject to global
competition.
3) With regard to spinning sector, TEI has no technology gap
and is able to offer spinning equipment of world class quality.
4) However, for weaving and processing sectors, TEI is
focusing more on customers who are in unorganized sector.
As a result, wide technological gaps exists. Even used
imported weaving machines are preferred over new low tech
weaving machines, produced locally.
5) Gaps in technology as stated above have forced organized
textile industry to go for high import of modern equipment
enabling them to compete in export market.
TMMA(I), 29th May 15 : PKB
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Se
cto
r
Required know how
Ways to acquire know how / brands
Bu
ild
-up
an
d / o
r s
tre
ng
the
n
de
dic
ate
d R
&D
Ce
lls
at
IIT
D
elh
i,
Po
wai a
nd
CM
TI
We
avin
g
Acquire know how related to
Shuttleless looms (rapier >400 rpm;
air jet > 800 rpm; water jet > 800
rpm)
Attract FDI (Picanol, ITEMA) regarding air
jet, rapier technology to be produced
competitively in India
Indian OEM’s should initiate JV / M&A
discussions with Panter, SMIT & ITEMA
Contd..
Identified technology gaps & possible ways to
bridge them – GHERZI Report.
TMMA(I), 29th May 15 : PKB
TMMA appointed Gherzi Consultants, to identify technology gaps and
recommend how, such gaps can be bridged. Additionally, to develop an eco-
system, manufacturing critical high-tech components for supporting
production of new generation machine in TEI on sustained basis,
recommendations are also made in the said report.
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Kn
itti
ng
Acquire know how related to:
a) High speed circular knitting
machinery (Micro-processors) and b)
Warp knitting
Indian players should evaluate M&A and/or
JV’s with EU OEM’s (mainly Italian & German
OEM’s)
Explore opportunities with Ningbo Yuren
(who is expanding fast) about manufacturing
in India
Bu
ild
-up
an
d / o
r s
tre
ng
the
n d
ed
ica
ted
R&
D C
ell
s a
t II
T
De
lhi,
Po
wa
i a
nd
CM
TI
Pro
ce
ss
ing
Acquire know how related to:
a) Environmentally sustainable
processing, b) High speed wide
width processing and c) Special
purpose processing and finishing
machinery (e.g. plasma-finishing)
Gherzi foresees also here several
opportunities for Indian OEM’s to tie up with or
take over EU producers (mainly Italian – there
are more than 50 SME’s)
Ind
us
tria
l/S
titc
hin
g
Acquire know how related to:
Hi-tech industrial stitching/sewing
machinery (lockstitch, overlock,
Cover stitch, bar tacking, pocket set,
button holes, etc)
Attract FDI (e.g. the remaining EU OEM’s:
Dürrkop, Pfaff; Necchi)
Identified technology gaps & possible ways to
bridge them – GHERZI Report.
TMMA(I), 29th May 15 : PKB
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Sr.
No
Name of the Item HS Code No.
1 Rapier Parts (Rapier tape, Rapier Head and Rapier Drive Wheel), Electronic
weft stop motion
84484950
2 CAM or CAM Beat up rapier loom 84484990
3 Weft feeders / Accumulators with or without electronic controlling
mechanism), weft selectors with programmer
84484950
4 Shedding motion
-High speed dobby mechanical or electronic(300 RPM and above)
-High speed dobby jacquard or electronic(300 RPM and above)
84481900
5 Electronic take up motion with servo motor control and Electronic let off
motion with servo motor control
84484990
6 Water Jet weft insertion system with water supply mechanism along with
electronic control and Profile Reed for Air Jet and Water Jet Looms
84484290
Contd..
Imperative to have an eco system to support
high tech machines, when produced in India
TMMA(I), 29th May 15 : PKB
8
Sr
No
Name of the Item HS Code No.
7 Compact Spinning Attachment 84483990
8 Automatic Yarn Splicers for Automatic Cone Winders 84483290
9 Spindle Motor for Automatic Cone Winders 84483290
10 Grooved Winding Drums for Automatic Cone Winders 84483290
Imperative to have an eco system to support
high tech machines, when produced in India
Import of above critical components should be at zero duty till
production of high tech weaving machine is established, locally.
TMMA(I), 29th May 15 : PKB
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Cluster approach for development through institutional linkages like
IIT-Delhi & Powai, CMTI should be encouraged by government(DHI)
for machines and components, as identified above.
TMMA has been able to organise a shuttleless loom
development project among 5 of our members and CMTI.
Creating Technology Acquisition Fund: Textile Industry and TEI is
migrating from Europe to Asian countries. This has resulted into
reputed manufacturers of textile equipment closing down. Their
technology can be acquired from earmarked funds, either for
individual Indian unit or for Cluster.
Import should be permitted at zero or nominal rate of duty for a
period of 3 years. After this timeframe, duty should be raised to
15%. This will facilitate Indian sector to acquire new, technically
superior machinery at reasonable costs and also signal foreign
machinery manufacturers to invest in India.
Recommendations for speedy implementation
for bridging technological gaps.
TMMA(I), 29th May 15 : PKB
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TEI – ISSUES (TUF SCHEME)
TUFS – Policy with regard to TUFS for textile industry should be followed:
without any change for 10 years period. Allocation of funds in the central budget
should be made in consultation with industry.
In order to promote investment in textile machinery manufacturing it is recommended
that incentives under Scheme of Hire• Purchase and TUFS in specific segments
should be made available only on indigenous machinery after period of 3 years. This
will give sufficient time for international and Indian investors to join hands or
make independent investments for manufacturing machinery within India.
At present TUFS benefits are not available for second hand machinery except
specific shuttleless looms. In order to promote usage of latest technology
machineries and promote machinery manufacturing investments it is recommended
that import of second hand machinery should not be encouraged except in case of
select technical textile and nonwoven machinery.
RRTUF Scheme.-Benchmarking of only domestic loom manufacturers should
be removed. This is an injustice.
Introduce Scheme Similar to TUF – For modernisation of TEI.
TMMA(I), 29th May 15 : PKB
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TEI – ISSUES (Inverted Duty Structure)
Inverted Import Duty Structure :
Existing customs tariff on Textile machinery and components are
inverted in nature‐ import of complete machinery attracts 5%
basic customs duty in general while raw materials and number of
components attract an average duty rate of 7.5% and above. For
promoting indigenization of machinery manufacturing, basic duty
of complete machinery should be at least 5% higher than on
inputs. It is recommended that a detailed exercise should be
carried out to assess whether the import duty on the raw material
needs to be decreased or import duty on complete textile
machinery need to be increased to maintain this differential
TMMA(I), 29th May 15 : PKB
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Thank You
Mr. Prakash Bhagwati Chairman
Textile Machinery Manufacturers’ Association(INDIA) & Chairman – InspirOn Engineering Pvt Ltd.