There is an un-acknowledged competition between textiles made from different fibres such as cotton, polyester, silk, artificial silk, etc. Garments made from different fibres, and blend of different fibres, have various markets and different segments of consumers. Most of this competition is determined by price, even though quality and content are also the influencing factors. Each of these fibres has a distinct supply chains – from production, spinning, weaving and garmenting are some of the main stages of these chains. There is a criss-cross of these supply chains, starting with spinning (yarn making) to develop blended yarn to cater to different needs. In the past more than two decades, there is a clear cut division between handloom sector and non-handloom, modernized textile production. Handloom sector depends on pure natural fibres, be it cotton, silk, wool or jute. Whereas, modern, automated, machinery-based textile production cannot but depend on fibre blends, or man-made fibres.
There is competition among, each level and across, fibre supply chains. Stakeholders at each level, in each supply chain, would be interested in increasing exports (to boost their revenues) and imports (to decrease their cost of production), or otherwise, decrease taxation, increase subsidies, decrease ‘rival’ subsidies, etc. Such a behavior has its implications on supply chains in terms of market prices, access, etc. For example, a decision to lower duties on silk yarn imports would negatively impact on sericulture farmers, but would directly benefit automated silk weaving units. Ultimately, any of the government policies, schemes or approaches towards each of these fibre supply chains would have a impact, positive or negative, on cost of production, access to raw materials and market segmentation.
India is a major country, with many fibre supply chains, right from raw materials, fibre production, spinning, weaving and garmenting. China is the only other country, which can match India, on this. That is, the problem is unique.
Dayanidhi Maran, Union Minister for Textiles, wanted to shift natural fibre-centric textile production to MMF-centric industry. Simplest reason being given is world production of MMF is above natural fibre production. The basis itself is hollow. Yet, a draft National Fibre Policy has been developed, which recommended decreasing taxation and increasing subsidies for MMF production.
This draft National Fibre Policy is skewed. As it is Indian textile industry has no champion at the national level. Industry lobby is divided trying to get firm-level benefits. Confederation of Indian Textile Industry (CITI), which claims to be representative of Indian textile industry, is caught in this conflict of interests. National Fibre Policy, in its present form, accentuates the conflict of interest. Recent decision of Union Cabinet to allow 10 lakh bales of cotton, in addition to 55 lakh bales allowed before, has created concern in the cotton spinning and weaving industry. Lobbies feeding on State, regional and corporate politics, are active.
However, there is no institution or individual, which is championing the national cause, in the form of promoting employment, economy and environment. Small producers, especially farmers and handloom weavers, do not have a lobby or access to influence policy making or policy makers. Present form of National Fibre Policy would influence the cost of production of handloom sector, its access to natural fibres (price, quality and quantity), working capital flow into the production and markets (prices of handloom products would be comparatively high). It would influence the consumer choices in textile markets, and would lead to rearrangement of market segments. With increase in cost of production and decline in sales, handloom products would be dire straits. As it is, handloom weavers have been living on low wages for the past 15 years and every family is indebted.
Already, in the last one year, cotton and silk yarn prices have jumped multi-fold, forcing many handloom weaving families to look for alternative employment. Sericulture farmers are committing suicides. Silk handloom weavers are not able to compete with cheap imitations and artificial silk products. Acreage under jute has been declining steadily. Wool is becoming a scarce raw material.
It is our estimate that atleast 10 crore population dependent on natural fibre-based livelihoods, from raw material, fibre production, spinning, weaving and garmenting would be directly affected, if National Fibre Policy is approved in its present form. On other hand, it would benefit one huge industrial conglomerate, increase the production of plastic and plastic materials and would result in crippling of a diverse Indian textile industry. GDP might increase in the short term, but India would end-up being a textile import country.
The most galling aspect is that none of these vulnerable sections have been consulted during the formulation of National Fibre Policy, nor it is being put up for consultation.
This draft National Fibre Policy needs to be discussed widely, and at various levels. Its acceptance, without debate and discussion, would be detrimental to lakhs of small producers in particular and Indian economy in general.