The fiscal 2006-07 is ending with a very positive and happy note for the textile machinery manufacturers in India. The buoyant mood of the industry was further helped by a piece of good news from across the border with the Pakistan government removing several items from the negative list as far as the imports from India are concerned. They allowed imports of machinery, surgical items, chemicals and pharmaceuticals from India to expand economic relations between the neighbouring countries. This would mean Islamabad allowed the import of textile machinery hitherto not being permitted for import from India in wake of the long standing demand by Pakistani textile industry. Indian machinery manufacturers may thus be able to cater to the needs of Pakistan. Though currently this may not yield desired results as Indian textile machinery manufacturers are flooded with the orders however there is no doubt that Indian machinery is competitive in prices and it would be much easier and quicker to acquire the same compared to the European products. This therefore should have a benevolent effect in the long-run.

The other piece of good news came when Chidambaram presented the Union Budget 2007-08 on 28th February this year. The announcement made by him continuing the TUFS during the Eleventh Plan Period received a great applause from the textile sector. This is more important as doubts were being raised regarding the Planning Commission opposing continuation of this scheme beyond the Tenth Plan period. The announcement therefore must come as a great relief to the textile industry as a whole. The TUFS as it is known was announced in 1997 however it really started picking up during last two years only. The industry demanded the continuation of this scheme so that the Indian textile industry sector could gear up to increase its share in the world trade from currently around 4 per cent to about 7 per cent by the end of Eleventh Plan period. The industry felt that with the projected growth in world trade in textiles and clothing of around 5.7 per cent the Indian textile industry shall have to gear up their operations helped by massive investments in various manufacturing sectors like spinning, weaving, knitting, processing and garmenting etc. These estimates indicate a necessity for fresh investments in the close proximity of around Rs.200,000 crore ! If one looks at the current scenario, the domestic sector has made a reasonable progress hiking the production from around Rs.1300 crore at the turn of the century to around Rs.2500 crore for 2006-07. The fact remains however that during the same period the growth of imported textile machinery, parts and accessories has shown a phenomenal growth crossing Rs.7000 crore for 2005-06. On the other hand the exports of textile machinery have remained more or less stagnant and has been hovering around Rs.450 crore ! It is but obvious therefore that the indigenous textile machinery manufacturing sector has to search hard for the facts helping the imports of textile machinery growing at much larger a pace. With all said and done the ratio of indigenous versus imported machinery remains 1:3. This is not a very happy situation. It is also for the indigenous sector to honestly indulge into the self audit to understand why they have failed to notch a comparative growth with regard to the imported machinery sector. It is also not uncommon to hear the Indian textile manufacturing sector bitterly complaining about the time over runs by the machinery suppliers and sometimes even cancellation of orders. On the other hand, the Planning Commission scrutinising the performance of TUFS does not seem to be convinced about the considerable dependence on the second-hand machinery imports. Once you label the scheme as Technology Upgradation Funds Scheme, the question is how far one is justified in importing machinery which is virtually out of race in the developing countries. In that case, would this not affect the Indian textile manufacturing sector adversely in the long-rum making them least competitive in comparison with the global manufacturers? There are also discussions regarding cut-throat competition from countries like China and Korea selling their products at unbelievable low price. Under these circumstances, it is felt that the famous quote of Charles Dickens "These are the best times - these are the worst times" ! is aptly applicable to the textile machinery manufacturers in this country. These are the best times - yes, if they can rise up to the expectations in terms of quality, delivery schedule and price. Next five years in that case offer an immense potential for them on the domestic front. But if they can't then it is also going to be equally true that these are the worst times. Nothing is more painful than having a tempting pie before you and just not being able to even test it ! It is in this sense, the textile machinery manufacturers will have to look at the opportunities before them. One thing that does not make any sense in this scenario is an abysmally low capacity utilisation. It has fluctuated between 36 per cent to 63 per cent during last six years averaging out around 42 per cent. How in this case the indigenous machinery manufacturing sector would be able to take the advantage of the opportunities knocking their doors. It is felt that there is no reason why the indigenous sector cannot rise to the occasion and make the most not only by supplying the domestic sector but also by dramatically improving its performance on the exports front. Huge demand on the home front should permit the local manufacturers to quote competitive prices in the global market taking advantage of marginal costing and aiming at better capacity utilisation and thereby comparatively low overheads. If this could be achieved, Indian textile machinery manufacturing sector could really emerge as a global player. But if the challenge is not answered, the huge domestic demand would only strengthen the suppliers from outside this country to have India as a happy hunting ground. The golden opportunity in that case would be wasted. May be the same way the Indian Cricket Team after a lot of hype failed to even qualify in the super eight humbled by our rather incognito neighbour. We only will have to say in that case - these are the bad times !!