National Fibre Policy:

Understanding the Context and

Implications

Dr. D. Narasimha Reddy

E-mail: nreddy.donthi@gmail.com

Present Situation

1500000

2000000

2500000

Volumes in Rs. Crores

Textile and

apparel industry

in India is

Rs.2,20,500 crores

0

500000

1000000

Global Market Indian Market

Global market is

Rs.20,25,000

crores

Types of Fibres

Natural fibres

• Cotton

Natural fibres

• Mesta/ Kenaf(Patsan)

• Roselle (Patwa)

Man-made fibres

• Acetate

• Nylon

• Polyester

• Acrylic

Double blends

• 65% polyester/ 35% cotton

• 70% acrylic/ 30% Avril rayon • Cotton

• Silk

• Jute

• Wool

(Patwa)

• Sunhemp(San)

• Ramie (Reha)

• Sisal

• Pineapple

• Banana

• Palm

• Coconut

• Acrylic

• Rayon

• High modulus Rayon

• Spandex

30% Avril rayon

• 80% cotton/ 20% wool

• 80% Acrylic/ 20% cotton

• 55% polyester/ 45% rayon

World Fibre Consumption

40

50

60

70

0

10

20

30

Year 1950 1960 1970 1980 1990 2000 2008

Global Fibre

Consumption

Fibre

Consumption to

increase, with the

growth of global

textile market62.6 billion

92.37 billion kgs in 2011textile market

9.2 billion kgs in 1950

billion kgs in 2008

2011

Indian Fibre

Consumption

Fibre

Consumption to

increase, with the

growth of

domestic and 1.2 billion

2.0 billion kgs in 2020

domestic and

exports textile

markets0. 6 billion kgs, now

billion kgs in 2012

kgs in 2020

World Fibre Composition

Man-made fibres

Natural Fibres

Indian Fibre Composition

Man-made fibres

Natural Fibres

Progression to Policy

Market Fibre Price FibreMarket Growth

FibreConsumption

Price Competition

FibreComposition

Why National Fibre Policy?

To reduce cost of production

To influence the textile product range

To increase the share in the global textile markets

To increase production of man-made fibres

Cotton Supply Chain

• Farming

• Ginning

• Trading• Packaging

Disaggregation

• Handloom

• Mills

• Powerlooms

Aggregation

• Packaging

• Spinning

• Trading

• Powerlooms

• Hosiery

Wholesale/Retail

Conflicting Expectations:

Cotton Supply Chain

Farmers

• Pricing

• Cost of production

Processors

• Lower procurement price

Users (handloom)

• Access to yarn

• Rising prices

Users (modern)

• Rising prices

• Blendsproduction

• Risks

• Agri-technologies

• Cotton Exports

price

• Higher market price

• Technology

• Taxation

• Yarn Exports

• Rising prices

• Imitation products

• Synthetic/blends fibres

• Yarn Exports

• Blends

• Fabric imports

• Export risks

• Yarn Exports

• Want domestic market control

Silk Supply Chain

• Silk worm seed producers

• Farmers/ rearers • Twisters

Disaggregation

• Handloom

• Mills• Powerloomrearers

• Extraction

• Trading

Aggregation

• Twisters

• Reelers

• Traders

• Powerlooms

Wholesale/ Retail

Conflicting Expectations:

Silk Supply Chain

FibreProducers

• Pricing

Processors

• Decreasing supply

• Cost of

Users (handloom)

• Access to yarn

Users (modern)

• Rising prices• Pricing

• Cost of production

• Risks

• Agri-technologies

• Marketing Infrastructure

• Cost of production

• Technology

• Taxation

• Access to yarn

• Rising prices

• Chinese yarn and fabric imports

• Artificial silk products

• Rising prices

• Chinese yarn and fabric imports

• Export fluctuations

• Want domestic markets

Conflicting Expectations:

Fibre Supply Chains

Handloom WeaversMechanised, automation-

based weavers

Fibre Producers Fibre Processors

Policies

Fibre Supply Chains: Policy Vaccuum

Indian Textile Policy, 2000

Technology Mission on Cotton

National Jute Policy

No Policy on silk, wool, organic cotton, MMF, etc.

Fibre Supply Chains: No National Policy

• Ministry of Textiles

• Ministry of Commerce

National Foreign Trade Policy

Indian Textile Policy

• Planning Commission

• Ministry of Agriculture

Policy

Five year Plans

No Policy with fibre

focus

National Textile Sector

Strengths

Diversity

Complete supply chain in all fibres

Huge domestic markets

Weaknesses

Infrastructure support

Working Capital Support

Rigid practices

Asymmetric flow of information

Opportunities

Small and flexible production

Demand for environment-friendly production and

consumption

Threats

Cheap Imports

Firm-level policies

Wrong subsidies

Automated, large textile machinery

Fibre Supply Chains: No State Policy/

Department

• Wool• Silk

Sericulture/

Agriculture Dept.

Animal Husbandry

• Jute• Cotton

Dept.

??Agriculture

National Fibre Policy

Employment

EnvironmenSustainable

10 crores on natural fibres

Environment

Sustainable Textile Growth

Current Employment

Cotton

Silk

• 40 lakh farmers

• 560 lakhs in others

• 50 lakhs in sericultureSilk

Jute

• 50 lakhs in sericulture

• 30 lakhs in other

• 40 lakh families

• 2.5 lakh workers

• 20 lakh sec/tertiary

Suggested: National Fibre Policy

To reduce cost of production

To promote growth of natural fibres

To support measures that

To increase the share in the global textile markets

To support measures that address kinks in fibre supply chains

Suggested National Fibre Policy:Bring out a Textile Fiber Products Identification Act

Establish a Natural Fibre Fund, to support lakhs of livelihoods

Increase the targets for natural fibreand fabric production through environment friendly methods

Establish price stability mechanisms

Thank You

Dr. D. Narasimha Reddy

E-mail: nreddy.donthi@gmail.com