Liaison Office, India

Indian Textile Industry Scenario June 2013
1. Market Information: Application Industry 1.1 India’s textile exports may grow 15% in 2013-14 1.2 SEL posts 70.5% jump in FY’13 turnover 1.3 India’s Cotton Exports to exceed estimates: USDA 1.4 Extended interest subvention to aid textile exports: FIEO 2. Market Information: Manufacturing Industry 2.1 India’s TUFS disbursement for 2012-13 at Euro 330 million 3 4 5 6 7 8 9 Government Information: 3.1 Development of textile industry in North Eastern States Indian Manufacturers & Dealers General Economic Information Exhibitions & Seminars Special Rates at Hotels in India Activities and Services of VDMA Liaison Office – India About the Author/Editor 2 2 3 3 4 4 5 5 6 7 7 8

Please Note: 1 crore: 10 000 000 1 lakh: 100 000 1 Euro: Rs 65

Created by VDMA India Textile Machinery Division

Indian Textile Industry Scenario, June 2013

VDMA Liaison Office

1. Market Information: Application Industry 1.1 India’s textile exports may grow 15% in 2013-14 India’s textile exports for the current fiscal year 2013-14 are likely to grow by 15 percent over last year, Minister of State for Textiles Panabaaka Lakshmi has said. During the first eleven months of last fiscal year, India exported textiles worth Euro 17.57 billion, registering a dip of 4.1 percent, owing to slow demand from Western markets. The Minister expressed hope that the performance of the country’s textile sector would improve this fiscal, as demand from Western markets has started to revive. Traditionally, around 60 percent of India’s textile exports are exported to the EU and the US. The Minister said the order flow from the US market has increased, however, the demand from European market is still slow. She added that Indian textile exporters have started exploring new markets like Russia, Latin America and Africa.

1.2 SEL Posts 70.5% jump in FY’13 turnover SEL Manufacturing Company Limited, an integrated textile conglomerate having presence in yarns, knitted fabrics, terry towel, ready-made garments and captive power generation, has witnessed 70.57% jump in its turnover to Euro 611 million (Rs. 3975.62 crore) during the financial year ended 31st March, 2013 as compared to Euro 358 million (Rs. 2330.83 crore) in the last fiscal. SEL’s consolidated EBIDTA has risen to Euro 110 million (Rs. 719.76 crore) during the year ended 31st March, 2013 as compared to Euro 60.3 million (Rs. 392.75 crore) in the previous year, registering an increase of 83.26%. Net Profit after Tax increased from Euro 12.68 million (Rs. 82.47 crore) to Euro 21 million (Rs. 136.99 crore), recording an increase of 66.11% during the financial year ended 31st March, 2013. SEL is fast on its way to implementation of new units and expansions. SEL Textiles Limited, a wholly-owned subsidiary of SEL Manufacturing Company Limited commissioned the state-ofthe-art Greenfield Mega Integrated Textile Park at Village Panjava, District Muktsar, Punjab in April, 2013. In the first phase, SEL commissioned the yarn spinning section, which is being set-up with a capacity of nearly 200,000 spindles. This Textile Park would catalyse significant additional investments in the textile industry of Punjab. On the one hand, the plant will be ultra-modern with the latest technology and strong systems, on the other hand, special emphasis will be laid on employment of women and regional workforce besides development of green-belts. The major raw material for the project i.e. cotton shall be procured mainly from the northern belt consisting of Punjab, Haryana and Rajasthan, hence creating value-addition for the textile sector in the region. The textile park will generate substantial employment opportunities. The project will also contribute significantly to the State Exchequer. SEL is confident that its expansion initiatives will not only catalyse industrial activity in India but also contribute to India’s standing in the textile sector of the world.

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VDMA Liaison Office

1.3 India’s Cotton Exports to exceed estimates: USDA India’s cotton exports for the 2012-13 marketing year ending in July are likely to surpass the earlier estimates of 7.2 million bales of 170 kg each, a recent report of the US Department of Agriculture (USDA) says. The report pegs India’s cotton exports at 9.2 million bales during the ongoing marketing season, which would, however, be 34 percent lower than last year’s exports of 14.17 million bales. By April end, India’s cotton export registrations had reached 8.9 million bales, while actual exports exceeded 8.5 million bales, the report said. However, exports for April were considerably low at 200,000 bales as exports to China almost came to a standstill. India’s Cotton Advisory Board (CAB) has upwardly revised the country’s cotton production estimates for the 2012-13 season to 34 million bales from its earlier estimates of 26.5 million bales. By April, the country harvested 29 million bales, which is the same as the quantity of cotton harvested by this time last year, but 3 percent lower than 2010-11’s output, the report titled “Cotton and Products Update April 2013” said. Analysing the demand-supply situation on the basis of CAB data, USDA said consumption remains steady on account of strong demand for yarn from China and Bangladesh. Holding around 2.1 million bales in unsold stock, state-owned Cotton Corporation of India (CCI) initiated the process of releasing the stocks on April 26 this year, by auctioning 25,000 bales. Both the textile industry and the CCI have been urging for releasing the unsold stocks for over weeks, however, the corporation presently it does not have the permission to auction anything in excess of 25,000 bales, USDA said. According to the report, owing to its proximity to leading textile manufacturing area around Tamil Nadu’s Coimbatore, almost all of the CCI cotton is in Andhra Pradesh, however there are concerns regarding the quality of CCI cotton, it added. USDA cautioned that the longer the time for which CCI clings to these stocks, higher are the probabilities that future auctions would lead to a fall in prices, particularly as farmers are deciding on their crop plantations for 2013-14. 1.4 Extended interest subvention to aid textile exports: FIEO Mr. M Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO) while commenting on the expansion in the interest-subvention scheme including 6 tariff lines for textiles including made-ups and 101 tariff lines in case of engineering goods besides the 134 lines that were included in January 2013 stated that this would provide some leeway to the MSME export sector who are impacted by the recessionary conditions in the global markets affecting exports of Engineering and Textiles, both of which declined by about 4% in last fiscal. FIEO Chief stated that the six tariff lines for textiles included: Blankets and Travelling Rugs ; Bed Linen, Table Linen, Kitchen Linen ; Curtains Including Drapes) And Blinds ; Sacks And Bags, Awnings And Sunblinds; Other Made Up Articles etc . Given that the turnover of the textile industry is pegged at Euro 43.45 billion at current prices with exports accounting for 36 per cent , India ranked third in global textile export, coming up behind China and the European Union . Being intensively employment oriented, the extension of interest subvention may come as the much needed relief which was announced in the Annual FTP announced in April this year said Mr. Ahmed.
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VDMA Liaison Office

President, FIEO stated that the 12th Plan document for boosting engineering exports inter-alia suggested reducing credit costs as a necessary pre-requisite for exports. Coverage of more Engineering products for interest subvention is a step to reduce cost of credit and impart competitiveness to Engineering exports which dominate export basket. 2. Market Information: Manufacturing Industry 2.1 India’s TUFS disbursement for 2012-13 at Euro 330 million (Rs 21.50 bn) Around Euro 330 million (Rs. 21.51 billion) of the total Euro 357 million (Rs. 23.23 billion) earmarked under the Technology Upgradation Fund Scheme (TUFS) for 2012-13, have been disbursed by the Indian Textile Ministry. During the previous year, allocation under the same scheme stood at Euro 569 million (Rs. 37 billion), while disbursements totalled to Euro 451.8 million (Rs. 29.37 billion) The scheme, launched since 1999, aims at providing low-rate credit to local textile entrepreneurs in the organized as well as unorganised sector, to help them modernize and upgrade their textile facilities. The scheme mainly focuses on modernization of processing, spinning, weaving, garmenting and technical textiles segments, where there is good scope for massive employment generation and value-addition. 3. Government Information 3.1 Development of textile industry in North Eastern States All the major schemes of the Ministry of Textiles are implemented all over India including the North Eastern States. As per the Government decision, the Ministry of Textiles has been earmarking 10 percent of its total budget outlay exclusively for the North Eastern States. During the current year the Ministry of Textiles has formulated three new schemes exclusively for implementation in the North Eastern States. These Schemes are North Eastern Textile Promotion Scheme, Scheme for usage of Geotextiles in the North Eastern States and Scheme for Promoting Agrotextiles in North Eastern States. The Government has taken various initiatives to address the issue of deficit of trained manpower in the handloom sector and bridge the gap between the skill and the market requirement. The Scheme of Integrated Skill Development for Handloom workers targets to create a pool of 50,900 trained weavers in the span of five years from 2012-13. Skill upgradation is also one of the important inputs in the cluster development programme of Integrated Handloom Development Scheme (IHDS). For the betterment of skilled labour in the handloom sector, the government has introduced policy initiatives such as cluster development approach, marketing promotion, revival of viable and potentially viable societies through loan waiver and recapitalization assistance, availability of subsidized yarn and credit etc. In addition, life insurance and health insurance coverage is also being provided to handloom workers. Similarly, for the betterment of sericulturists, the government is implementing schemes such as Catalytic Development Programme. In addition, the Government has introduced the Integrated Skill Development Schemes (ISDS) in 2010-11 with the objective of creating a skilled workforce for the textile sector. Under this scheme, a total of 1,00,000 persons have been trained since the beginning of the scheme. An outlay of Euro 292.3 million (Rs.1900 crore) has been provided for training 1.5 million persons during the 12th Plan.

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Indian Textile Industry Scenario, June 2013

VDMA Liaison Office

4. Indian Manufacturers and Dealers Company Products Wet Processing & Finishing Swastik Textile Engineers machinery for Pvt. Ltd Mr. Mehta  Woven Fabric Managing Director  Knit Fabric Swastika Premises, Amraiwadi,  Yarn & Fibre Ahmedabad – 380026, India  Terry Towel Tel: +91 79 65435017  Technical Textile Fax: +91 79 2274 9131  Nonwovens info@swastiktextile.com swastika.intl@rediffmail.com

Profile Established in 1937 as a trading concern, SWASTIK was converted into a Private Limited Company in 1946. Manufacturing activities commenced in 1947. In 1958 the Engineering Division started producing Textile Wet Processing Machines, under license from world-renowned manufacturers like MEZZERA S.P.A. & COMERIO ERCOLE S.P.A. of ITALY as well as other reputed European manufacturers. Now, with more than 50 years of manufacturing experience

5. General Information 5.1 Indian Economy to grow 6.1% in year 2013-14 The World Bank on Tuesday scaled down India’s GDP growth forecast to 6.1% for the current fiscal (2013-14) from its earlier estimated 7% but underlined that growth is expected to recover gradually. According to the World Bank’s latest India Development Update, a twice-yearly report on the Indian economy and its prospects, economic growth is likely to accelerate to over 6% during the current fiscal year, up from an estimated decade low growth of 5% in the previous fiscal year. Growth is expected to further increase to 6.7% in the next fiscal year, it said. The reduced forecast is largely due to estimated farm sector growth of 2% during 2013-14 against the previous estimate of 2.7%, despite normal monsoon projections. “Despite the current downturn, long-term prospects remain bright for India,” said Martin Rama, chief economist, South Asia, World Bank. “India possesses the fundamentals to grow at sustained high rates over the next several decades,” he added. In recent months, both wholesale price index-based inflation and trade deficit have declined. Inflation fell below 6% and is now within the Reserve Bank of India’s (RBI’s) comfort range. With the stabilization of the rupee and expectations of a good monsoon, inflation is expected to decline further, the update said. The current account deficit, which reached a record high of 6.7% during October-December 2012, is also expected to narrow in the medium term.

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Indian Textile Industry Scenario, June 2013

VDMA Liaison Office

6. Exhibitions and Seminars

Techtextil India 2013 International Trade Fair for Technical Textiles and Nonwovens Date Venue Organizer Profile Messe Frankfurt Trade Fairs Exhibitor Profile 03Bombay India Pvt. Ltd. 05.10.2013 Exhibition 215 Atrium, 4th Floor, C-420, Center,  Research, Andheri Kurla Road, Chakala, Goregaon(E) Development, Andheri (E) Mumbai Planning Mumbai - 400 059 Consultancy Tel: +91-22-6144 5900 (Fax): +91-22-6144 5999  Technology, Machinery for Exhibits: Accessories Bijoy Varghese Deputy Project Head Contact: +91 22 6144 5960 Email: bijoy.varghese@india.messefr ankfurt.com Amita Singh Sales Executive Contact: +91 22 6144 5961 Email:amita.singh@india.mes sefrankfurt.com  

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Fibres and Yarns Wovens, Scrims, Braids and Knitted Fabrics Nonwovens Coated Textiles Composites Bondtec (Surface & Bonding techniques) Associations Publishers

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Indian Textile Industry Scenario, June 2013

VDMA Liaison Office

7. Special Rates at Hotels in India We have negotiated special rates for VDMA member companies with Taj Group, Oberoi Group & ITC Group of Hotels covering not only the major cities like New Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad but also other destinations in India like Goa, Agra, Rajasthan, Kerala and many others. The discounts range from 25% up to 45% depending on the city and the hotel. However these discounted rates would be valid only when the booking is done through VDMA Liaison Office in Kolkata. For further details or reservations feel free to contact us.

8. Activities and Services of VDMA Liaison Office in India  Promotion of sales of members in participating divisions within VDMA, especially exports, including participation in exhibitions.  Organizing symposia and similar presentations of German companies in India.  Participating in and servicing bilateral program such as those in existence, with governmental participation between Germany and India.  Furnishing of information about the complete product program of the German industry to assist Indian companies to identify right partners for mutual business relationship.  Providing information on market trends, prospects, future development, new projects and tenders. Please contact us at: VDMA North India Office Mr. Sumit Sharma (Regional Manager) C 25, Sector 61 Noida 201301, INDIA TEL :- 00- 91- 120 - 4255029 FAX :- 00- 91- 120 - 4255029 Mobile :- +91 93505 19034 E-mail: sh.sumit@yahoo.com VDMA Liaison Office Mr. Rajesh Nath (Managing Director) GC 34, Sector III, Salt Lake Kolkata – 700106 / India Tel.: 0091-33-2321 9522 / - 2321 7391 Fax: 0091-33-2321 7073 E-mail: vdmaindia@eth.net

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VDMA Liaison Office

9. The Author

Sumit Sharma, representative of VDMA North India Office, which was established officially in October 2006, was born in January 1977 and studied in New Delhi. He completed his graduation in Entrepreneurship and Small Business from Delhi University, with distinction in the year 1999. Thereafter, from 2001 to 2006 he pursued a career in marketing with a division of Samsung Electronics, based at Mumbai heading the states of Maharashtra & Gujarat. He returned to Delhi in October, 2006 to work for VDMA Noida office. His responsible sub-sectors include VDMA Textile Machinery, VDMA Woodworking Machinery, VDMA Agricultural Machinery, VDMA Cleaning Systems and co-ordination of activities with VDMA India Head Office at Kolkata. The North India office also maintains close contacts with the German Embassy, Industry Chambers of Commerce in Delhi as well as German and Indo-German Companies in North India.

VDMA India Quarterly Newsletter-German Machinery Industry The VDMA India office publishes a Quarterly Newsletter-German Machinery Industry. This Newsletter informs the Indian industry about the development in the German Machinery industry in various industrial sectors. This Newsletter has a circulation of around 8000 copies in different industrial divisions. The VDMA member companies have the possibility of giving an advertisement in this Newsletter at a discounted rate.

For further details, please contact: Ms Jamly John at: jamly.vdma@gmail.com

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