Textile majors and apparel exporters do not share the government?s optimism that their sector will meet the $ 50-billion export target by 2010, up from the existing $ 14 billion.
They maintain that the country missed the bus by not investing in new capacities just after phasing out of the quota regime in 2005, paralytic 2007, when good orders arrived, however, giving the required capacities had been a major contstraint.
Because of this, players who have the right kind of attitude and can perform well would stay in the prevalent cut-throat competition. What added to the woes of the community was continued appreciation of rupee during the year.
?We were not aware of the opportunities three year ago. It was only in the last one year that we started drawing up our plans,? joint managing director of Rajasthan Spinning and Weaving Mills, Riju Jhunjhuwala said.
The target set by the government was mooted five years ago, however, the investment have started flowing in only recently. Meanwhile, other competing countries such as China, Pakistan and Bangladesh have built large capacities. Similarly, India during the period had strict quota norms and there were no restrictions on exports from Sri Lanka and Bangladesh.
According to consulting firm, KSA Tecknopak, an investment of $ 20 to 25 billion would be required in the textile infrastructure for exports to touch $ 50 billion mark in the next five years. As per the government estimates, an investment of Rs 1,40,000 crore is required in the area, however, the nine textile majors in the countries have put in Rs 2,600 crore in new capacities in the recent past as compared to China which has spent $ 60 billion in textile infrastructure in the last 10 years.
Indian companies need to invest just the double to meet the testing standards of global companies. Processing in many Indian units is still done manually as it works cheaper, but it lack consistency in output. This is unacceptable to buyers, the firm added.
Industry sources lament that they are not able to attract enough private equity investments as there are only a handful of Indian textile companies with a market capitalization of over Rs 1,000 crore. China has about 25 to 30 such firms.