RIL’s RD Udeshi Expresses Confidence That Govt. Will Agree To Fibre Neutrality In Implementing GST

Economy

RIL’s RD Udeshi Expresses Confidence That Govt. Will Agree To Fibre Neutrality In Implementing GST

The government’s recent announcement of 18% levy of GST on synthetic rayon fibres of which India is the second largest exporter has not gone down well with the man-made fibre industry sector in the country. Amidst much speculation and doomsday predictions, RD Udeshi, President Reliance Industries Limited’s Polyester Chain, sounded it calmly that while the government has agreed to fabric neutrality, arriving at fibre neutrality is only a matter of time. In an exclusive interview with our Special Correspondent Venkatesh Raghavan, Udeshi exuded confidence on India’s potential to capture greater space in the global markets in the MMF segment and also listed the requirements that have to be met. Excerpts from the interview are reproduced below.

The global trend is shifting towards man-made fibers as was cited during the course of the Textile Association of India Summit. What steps do you think India should take to stay a globally significant player in the textile market five years from now?

Globally man-made fibre plays an important role in the Textile Industry. Globally, land is required for producing food grains and providing food security for mankind. Most of the countries would like to utilize the existing available land to provide food grain to meet the food security.

Global man-made fibre share in total consumption of fibre is 65% whereas cotton fibre contributes 35% of the fibre consumption. We have seen in last few years cotton production has stagnated in the range of 23 – 26 million tons globally. If India needs to increase textile production from existing US $ 120 billion to US $ 500 billion, we strongly believe that entire growth of textile production will need to come from man-made fibre since India has reached a point where not more than 6 – 7 million tons of cotton would be available to meet the incremental requirement of fibres. Indian Textile Industry needs to scale up their production in areas of quality and quantity. India needs to have high quality processing facility to meet the global fashion trend. The entire value chain starting from production of MMF, weaving, processing and garmenting needs to be more innovative to improve cost structure, efficiency and also to maintain quality standards.

What role is Reliance Industries Limited envisaged to play as textile major in ensuring the growth of the synthetic textile industry in India?

Reliance will play a major role in growth of entire polyester value chain. Reliance has an advantage of implementing the cycle from start to finish. From exploration to refinery to Xylene to PX to PTA + MEG to fibre filament to textiles, we cover it all. Entire value chain will be made available to meet the requirement of the textile industry.

Our R & D facility has been established at Patalganga to produce innovative fibres like moisture management fibres, fire retardant fibres and we also have product application centre. This will provide end-to-end solution for the textile Industry.

What role has the organized sector to play in promoting man-made fiber industry as an export-centric sector?

As we all know cost of production has increased in China due to increase in wages and power cost. Indian cost of labour and power continues to be competitive. Indian industry is capable of providing products at competitive cost provided we scale up our production and improve our efficiency. China will be vacating some of its export markets due to cost escalation and also increase in internal consumption of textile. This is a big opportunity for Indian textile industry to fill the gap and increase exports. India needs to be a production hub since entire raw material chain is available within India and we need to take advantage of our cost benefit.

Organized sectors need to have more knowledge in changing fashion trend and quality standards required to meet customers’ needs. Some of the brands need textile/products from India, provided we meet our tiime line and quality standards.

Currently the government has imposed 18% GST on synthetic rayon fibers. Do you view this as an impediment to the growth of man-made fiber industry? How do you propose to circumvent this disadvantage?

Government proposed to impose 18% GST on synthetic fibres. However, in the first stage Government has brought fibre neutrality at fabric stage and we are sure in the coming time, they will also bring fibre neutrality at fibre stage. Industry will continue to request Government to reduce GST from proposed 18% to be in line with cotton fibres.

What are the infrastructural requirements for the man-made fiber segment to augment their productivity?

I strongly believe that Indian man-made fibre industry is well equipped technically to produce man-made fibre at global costing and meet all required quality standards. Efficient supply chain, shipping and port facilities and transport infrastructure will help growth of man-made fibre and textile industry.

At present, how comfortable is India’s position in the MMF global markets?

India is the largest producer of cotton and the second largest producer of man-made fibre globally. However, there is a big gap between the largest producer (China) and India. Although Indian man-made fibre is well equipped with entire value chain, we need to accelerate growth of man-made fibre in India.