There are many initiatives that are being planned by the government, which will benefit the textile industry soon, says Sanjay Jain, Managing Director of T T Ltd (a flagship company of the 74-year-old TT Group); and Chairman of JITO Business Network. In an interview with FPJ’s Jescilia K, he shared the journey of the textile industry in these testing times.
How has COVID been for the textile industry?
COVID has been a mixed bag for the textile industry. There are segments that have done well like cotton, yarn, basic apparel etc. Initially, there were hiccups in these segments as well. But that has been short lived. Compared to last June 2020, the price of cotton has gone up by 50 per cent in 2021. Farmers and traders have gained a lot. This is the trend internationally and in the domestic market too. Meanwhile, the yarn prices have gone up 50 per cent keeping in tune with raw material price rise.
It is the garment space like formal wear, occasion-based wear and people making designer wear, which has been deeply impacted. The garment industry has seen deep debt due to this. They were hoping things will improve in the second wave. But that did not happen. Now, the garments segment is hoping that the festive season, marriage season and winter season demand does not coincide with the third wave.
While many players reported record breaking sales, there are others who are struggling.
How has business been for TT Limited?
It was not as bad as we expected. The first three-four months of COVID were bad. However, things have improved and profitability has gone up. In the case Q1 of FY 2022, despite the second wave of COVID, we managed to do well. We were a yarn-to-garment company. But we are in the process of restructuring our business. This will make us a pure casual and inner wear brand. We have done the deal and all requisite permission from stakeholders have been taken as well. This will reduce the risk profile of the company and increase margins of the company. The stock market has been positive about this change as well. I hope things will improve for our company.
With COVID past us, we should see an upturn in consumption as well. The new textile minister is bullish about the industry and looking at new initiatives to give a push to the industry. This will give an impetus to the textile industry in 2022.
The textile and apparel industry will be an industry to look out for in the next five years.
The industry has been raising concerns over GST. What is happening there?
The man-made segment is asking for rationalisation and fibre-neutral GST. This is mainly because the man-made segment has to pay a 12 per cent rate and cotton has to pay 5 per cent. The government has an intent to make GST fibre neutral. The GST council is considering discussing it too. However, due to COVID and existing inflation, it was not favorable to increase GST on cotton-based fabric. Sooner or later, there will be a change. But I hope the rise is not a double-digit figure as that will have a huge inflationary hit on the industry. We hope the government finds a midway.
What are the priorities of the government and the industry?
The government is looking at introducing the PLI scheme. Unlike global trends, India’s man-made fibre share is about 40-45 per cent as against the global trend of 70 per cent. If India needs to grow really fast, then India needs to grab a share from the global market. Man-made fibre will get a real push from the government in times to come.
We are pushing the government on FDI and the government is looking at that as well. It is important to expand our market.
The industry expects the government to come up with long-term policies. We do not want uncertainty about incentives and various schemes. Consistency is something the industry is looking for.
We want the government to have a clear policy around cotton as well. This commodity is extremely volatile and this is disturbing for the industry.
In the case of technology and startups, where is the textile industry today?
The textile industry is still seen as a struggling industry largely dominated by micro, small and medium enterprises. There is some effort there. But largely, there is no keen interest among start-ups to introduce technology in the industry.
JITO Business Network (JBN) is organising a 12-day business event called JBN Mahakumbh for the first time. Speaking about this, Sanjay Jain said, “This is giving everyone in the country an opportunity to attend and learn new things. It will give a window to everyone within the country and globally to attend and receive something back in return.” The company is expecting 1 lakh logins over 12 days. This event will start on August 20 and conclude on August 31. Jain added, “This programme will be an opportunity for all start-ups, youth, and women who are facing challenges in their businesses and looking for ideas to grow.” The programme is divided into three verticals namely virtual expo; business opportunity session; and mentorship session. In the virtual expo vertical, there will be 500 stalls covering 27 industries. These online stalls will be there 24X7. In the business opportunity session, around 30-40 large corporations would be presenting various opportunities like buying and jobs they can offer. The third vertical on mentorship will have mentors or business experts speaking on business-focussed topics.