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To triple exports to $11b by 2010 -- Leverage textile strengths: McKinsey

G. Gurumurthy

COIMBATORE, Sept. 5

A JOINT study on opportunities to increase India's cotton textile exports by the cotton textiles export promotion council (Texprocil) and the international management consultancy firm, McKinsey and Company, has suggested a two-pronged strategy to triple the country's exports from the current $4 billion to $11 billion by 2010.

The McKinsey study, unveiled at a gathering of leading members of textile industry, entrepreneurs, high-ranking Government officials and the industry experts in Mumbai, as the phase-I strategy, wants leveraging India's current strengths and capabilities to boost product exports, specifically in cotton yarn, made-ups and processed fabric manufacture to lift its exports to $6.5 billion.

The near-term planning in this strategy calls for aggressive marketing to penetrate Asian markets, particularly the Greater China market for cotton yarn through front-end market initiatives and post-sales services; concentrating on the 'mid-segment' shir tings (in the processed fabrics) for export to the US and the European Union garment conversion centres; and focussing on the 'niche' made-ups segments such as hand-embroidered products and the medium to high-end terry towels/kitchen/table linens in the made-ups exports.

The study points to the possibilities of bridging the 12 to 15 per cent cost gap Indian yarn had compared to the competing yarns and in such an event, yarn exports could increase to $2.2 billion. Similarly, successful implementation of strategy in the ar ea of processed fabrics, which calls for developing close relationships with top 10 middle-end retailers in the US/EU garment conversion centres, will enhance exports to $1.3 billion and the made-ups exports to another $2.5 billion by 2010.

The McKinsey study has underlined the need to explore selective processing investments in the manufacture of wide-width bed-linen category through joint ventures with global majors to facilitate higher exports from the country.

The study has, as part of the long-term strategy, enunciated Government-industry initiatives to create level-playing field for all domestic textile manufacturers in the areas of excise duty structure, labour laws, power and infrastructure. India needs to improve the domestic cotton base significantly if it has to off-set the estimated loss of Rs 3,000 crore arising out of low yield and contamination in cotton annually. Both the Government and the industry need to develop a comprehensive programme to plu g the value loss and raise investments in this area, the report says.

The textiles sector currently runs the risk of being left behind by its competitors like China and Pakistan and the key areas of concern for the textile industry has been eroding its cost competitiveness across products, due to fragmented nature of the i ndustry, its weak position in quality and service parameters. India currently enjoys a 14 per cent share in world cotton textile trade, next only to China. And, in a worst-case scenario, its exports could fall to $3 billion from the present $4.1 billion by 2010 reducing its share in the world cotton textile trade to just five per cent, the study has cautioned.