The world had witnessed a financial tsunami in 2008 and the effect is still lingering. Officially, the United States has been in a recession for at least a year or so. And, as the author pens down this article news from the United Kingdom is such that the recession has been officially declared there. Although India and Asian economies are not totally decoupled from this global economic tsunami, the effect is not as harsh as in the developed economies. Recent statistics indicate that Asia grew around 8.7% while banks were bellying-up in the United States.

It is expected that China's GDP will grow around 8% and India will grow around 7%, whereas the GDP growth in the US and Europe will be less than 1%. Taking the case of India specifically, the growth expectations can be met if there is a cautiously regulated growth policy spanning three important sectors, i.e., service, manufacturing and agriculture.

What is happening in India Recently?
A day after Oscar nominations, it is a feel good story for India. The I ndia centric SlumDog Millionaire has received 10 Oscar nominations and is second in the Oscar ranking this year for maximum nominations. One may ask what this has got to do with the Indian textile industry. As we all know and agree, economy is based on facts as well as perception. This we experience in our day-to-day life with the rise and fall of the stock market which is not only based on economic numbers but also perception. India Inc. is really doing relatively well. The author was in Gujarat recently in January. He feels honored to be invited to present a paper in the Seminar on Textiles and Apparels of the Vibrant Gujarat Global Investors Summit. Surely, Gujarat and India have showcased to the world that there is no recession and there is progression. At this time, where on earth that one can experience such vibrancy and see a forward looking industry than India? It is really mind boggling to note that investments worth $ 241 billion dollars have been inked.

This is quite a contrast to the situation in the USA where President Obama and the Democratic Congress are pushing for a stimulus package worth 825 billion dollars. This consists of tax credits and loans as part of the Governments plan to boost the economy. Whereas, results from the Vibrant Gujarat show that India Inc is optimistic and highly confident to sign Memoranda of Understanding with the State of Gujarat for investments worth nearly 1/3rd of the United States stimulus package. This clearly shows that the economic pendulum is swinging from west to east. The optimism and the confidence that are vibrant in India should be ceased upon to translate into tangible projects. Indian Inc., Government of India and the international community have to cash in on the current opportunities so that cash flows really kick in within two to three years. Although, it is really ambitious to see return on investments on proposed projects within 12 months, due to the global consumer and economic negative situations, it would be judicious to expect positive signals beyond summer 2010. This is a good opportunity for the Indian manufacturing industry and more specifically the Indian textile industry to have some breathing space to concentrate and focus on diversification beyond the commodity textile borders.

Diversification in the Textile Industry: The Need of the Hour
Microsoft and Intel are household names and it would have been unimaginable to see them downsize and layoff people a few years back. But the reality is that, within the next 24 months it is reported that Microsoft and Intel will lay off 5000 staff each and possibly downsize their operations. This situation clearly sends a signal to Indian Inc. that the old financial adage is correct, "do not put all eggs in one basket." No doubt that India flourished and prospered due to its service sector since the 90s. It is not at all possible for India to just focus on service sector alone anymore. Other two major sectors such as the manufacturing industry which is in the mushy middle between the service and agriculture sectors provides us with a nice platform for growing India economically. And, within the manufacturing sector, traditional segments such as textile and leather industries occupy an important role as they not only help with export earnings but also provide ample job opportunities. With over 70 % of Indian population still living in semi-urban and rural areas, these traditional sectors that have employment generation opportunities have to grow.

Is this possible in the current economic situation? As the outputs from these traditional sectors are predominantly non-essentials, with the consumer buying power shrinking in the world, how can these industries grow? Textile industry is quite fortune to have an edge over the leather sector as this industry can deliver some important products which have reached near essentials status. These products include those textile items that are on the border line of indispensible items in our day-to-day life such as medical textiles, hygiene products such as baby and adult diapers and baby wipes, etc. Another segment which has a defined market albeit tough to penetrate is the defense textile sector. As it is evident from the above mentioned products although these are not life saving essentials, due to their functionalities and applications in our day-to-day life, they have become somewhat essential commodities. This puts the textile industry in a better situation and gives an opportunity for diversification even in the current economic scenario.

Cluster Development is a Timely Need
As technical textile industry is a knowledge dependent industry, it is not possible to be competitive even for large industries without constant input of new information. Pooling of resources together by all stake holders with the knowledge source in the center will be vital for the development of the technical textiles industry in India. In this connection, the Government already has done a valuable service in creating category specific resource centers such as Agro, Medical, Geo and Protective textiles. These Centers of Excellence should be utilized to create knowledge hubs to promote the growth of technical textiles sector. For example, MANTRA being a part of centrally funded Center for Agrotextiles will be great a resource If it outreaches to entrepreneurs and trains them in processes that are at their disposal such as coating and laminating to develop products that of multiple applications such as coated textiles for defense, antimicrobial treated bed liners for hospital applications etc. The author is positively hopeful that this is what happening in Surat right now.

To sum up, growth in the technical textiles sector is certainly there if the effort is concentrated towards developing converting sectors that develop products that are needed by consumers. Again quoting an old adage, "Consumer is always the King." Those industries that come to the market first with the products that are useful and competitive will be the winners. Just for example, electronic giants Sony and Samsung are currently reporting huge losses that have never happened to them over a decade. On the other hand, Apple is booming with its iPhone sales. The sales figure is astonishing that Apple sold 22 million iPhones globally in the last quarter of 2008. What does this tell us? Customer centered innovative products will always be the winner. In the manufacturing industry like textiles and in particular technical textiles sector in growing economies like India, it is a pooled effort that will help with the growth. In other words, cluster model will be the way to go forward for boosting the interest and affordable investments from SMEs.
By: Seshadri S. Ramkumar

Source: http://www.fibre2fashion.com/