AHMEDABAD: For the Rs 2.75 lakh-crore Indian textiles and apparel industry, a global competitive edge is emerging in its cotton fields.
Though China continues to be the world leader with 4.2-crore bales (1 bale is 170 kg) against India's cotton production of three crore bales, Indian mills can flex their low-cost production muscle in the world market. As per the International Textile Manufacturers Federation (ITMF) data, India's cotton yarn production cost is estimated at $2.13 per kg, much lower than China's $2.89 per kg and the US's $2.81.
The 35% cost-advantage against the main rival, China, is primarily due to more than 100% rise in cotton production in the past eight years. The natural fibre, which was fast losing out to man-made fibre in the early 80s to 2000 period, is now capturing its lost sheen in the textile industry.
Before the emergence of Reliance and its world-class synthetic yarn facilities, the share of cotton in the textile industry was around 62% (in 1982). However, it started losing its turf to the man-made fibre that was cheaper and more durable. The share of cotton textiles further dipped to 39% in 2001. But, the mid-2000 saw a reversal in the trend. The ratio of man-made and cotton changed to 50:50 in the textile industry, giving a lot of hope to the sector.
As per Centre's latest estimates, cotton's share vis-a-vis that of synthetic fibre is set to touch 60%. Availability of raw material in abundance, along with the low-cost production advantage, has brought the limelight back to cotton.
"Ample availability of raw material and a rise in disposable income of the people are responsible for the high growth of cotton textiles in the country," said an Ahmedabad-based entrepreneur.
The increase in production of cotton in India from 1.4 crore bales in 2000-01 to more then three crore bales in 2008-09 has made a huge quantities available for the industry.
"At the time of division of British India and the formation of India and Pakistan, the cotton-producing areas were mostly in Pakistan and there was a scarcity of cotton in India. However, after 1970, there was a phenomenal growth in the production of cotton in the country," according to PR Roy, a 40-year-old veteran of the textile industry.
An importer of cotton about four years ago, India has now become a net exporter. High stock of cotton in the domestic market has significantly improved the competitiveness of the country's mills.
Source : The Economic Times