\nEconomic Times, India
\n BANGALORE\/MUMBAI: The going is not just bad for textile exporters of Tirupur, it\u2019s the worst ever. And official policies have come back to haunt
\nthem.
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\nTirupur has about 6,250 factories, which provide direct employment to 3.5 lakh people (mainly rural women) and indirect employment to about 2 lakh. The units are mainly dependent on the export of hosiery and knitwear, with around 50-55% going to the EU countries, 30-35% to the US and the remaining to other countries.<\/p>\n
A Sakthivel, president of the Tirupur Exporters Association (TEA) contends that had the government made the import of necessary machines cheaper, lower production costs could\u2019ve made things easier. The industry is facing a 25-30% decline in growth this year.<\/p>\n
FISME secretary general Anil Bhardwaj says funding is the bottleneck for investments by MSMEs in technology. \u201cIt\u2019s almost impossible to go to bankers today with a proposal for technology upgradation,\u201d he says. \u201cBetween 2004 and 2014, the system was flush with funds from non-traditional sources such as VCs and PEs.<\/p>\n
Those days, there was competition to grow; now it\u2019s to survive,\u201d he adds. Ask R Sivaram, executive director, Royal Classic Mills, which exported goods worth around Rs 300 crore last year. He points out that with modern knitting machines, costs have gone down by 20% and water consumption has fallen by around 42%. But with each machine costing Rs 35 lakh, the higher efficiencies have not yet been passed on.<\/p>\n
\u201cHad the government made this import cheaper, we would be in a better position,\u201d he adds. The key problem, according to Sakthivel, is that China enjoys a 4-6% interest differential over India, making its exports cheaper. Vietnam and Cambodia are also surging ahead with exports, although the main markets such as the US and Europe continue to reel under recession.<\/p>\n
Modern knitting, fabric furnishing and cutting machines from Germany are still expensive and in such times, unaffordable. But people like Britto M Joseph, who heads the JVS Group, and clients like Wal-Mart and Tesco, regret missing the bus. \u201cThe government should have given sops earlier. We would have had less manpower and done with fewer layoffs today,\u201d he says.<\/p>\n
Auto companies are also caught in a quandary on the technology front. Vishnu Mathur, executive director, Automobile Component Manufacturer\u2019s Association of India, explains: \u201cThe main problem for MSMEs is the unavailability of funds for R&D. The government and private players should provide some support.\u201d
\nMost of the time, no private player is willing to risk his money by lending to a MSME for R&D.\u201d However, large companies often drive their smaller suppliers towards technology upgradation and the Tata Nano is a perfect example.
\nOn the process technology front, Dinesh Agarwal, CEO, Indiamart says IT software should be simple to use:<\/p>\n
\u201cOne can\u2019t expect SMEs to use complex technology at a time when many of them do not even have access to the internet. So the government should make such software imports cheaper and push them to the hinterland, along with the spread of broadband,\u201d he says. Jasjit Sawhney, CEO, Net4India agrees, \u201cMany software packages are used by the large players, to begin with. Hence the software is not tailored to the smaller players, either in terms of size or cost.<\/p>\n
The government can either provide rebates or incentives for making such customisations.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Economic Times, India BANGALORE\/MUMBAI: The going is not just bad for textile exporters of Tirupur, it\u2019s the worst ever. And official policies have come back to haunt them.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\n