TECHNICAL TEXTILES MARKET :: Over the years, technology has helped in the growth of industries across various sectors and further continuous developments are happening through research and innovation. In the field of textiles, technical textiles has brought about the change where unconventional textile products are being used to enhance the efficiency and sustainability of conventional products. Technical textiles is a large and established industry globally and is poised to grow significantly in India as well. Given below are further insights on the current global and domestic market scenario of technical textiles, growth enablers for the domestic industry, challenges present and the way ahead for the industry.
Increasing demand of technical textiles leading to emergence of new production and consumption bases globally
The global technical textiles market is growing at a rapid pace and the drivers of this growth are primarily the developed nations like US, EU & Japan, while emerging markets like China and India are showing high growth potential. Majority of the consumption (i.e. approximately 65%) is concentrated in the USA, Western Europe, China and Japan while the rest of the world accounts for 35% share in the consumption. Economic growth and increasing industrialization in Asia Pacific and Latin American countries has led to an increase in the demand of technical textiles in these regions. Countries such as China, India and Brazil are expected to play a key role in shaping the future technical textile market and lead their respective market regions owing to favorable government initiatives and policies encouraging growth of infrastructure development, manufacturing, healthcare etc.
Currently, majority of the increasing demand of high end technical textile products is being fulfilled by United States. Major export markets for U.S. companies are Vietnam, India, Taiwan and Brazil. Korea and Taiwan are also emerging as a strong competitor to US, with their focus on innovation.
India growing as a consumption as well as a production base for technical textiles
Technical textiles in India continues to grow along with the growth of end user industries. The current technical textile market size of India stood at INR 92,499 crores in 2015- 16 and is expected to reach INR 1, 16,217 crores by 2017-18 growing at 12% CAGR. This growth is driven by various factors like the growth in the industry sector, rising awareness amongst the public about health care, hygiene, sports, increased spending in defense, increasing use of protective clothing, demand of quality infrastructure etc.
The “Make in India” initiative has led to a good response from the investors as committed investments of approximately US$ 225 billion across all sectors were announced during the “Make in India” week earlier this year. This indicates that India is becoming an attractive destination for manufacturing. In the automobile sector, major investments were announced recently from big players such as Honda, Force Motors, Boeing, Isuzu motors, Airbus, Suzuki etc. A similar trend in investments has been observed in other industries such as infrastructure, healthcare, engineering etc. Since a large number of technical textile products are consumed in these industries, an increase in the investments in these sectors will lead to higher consumption of technical textiles.
Apart from the increase in investments, there are other factors also which have enabled the growth of technical textiles in India. India’s economic growth is one such factor. India’s economy is growing at an average GDP growth of 7.6% over the last decade. This growth has been reflected in the increasing per capita income of people which has doubled over the last ten years rising from US$ 730 in 2005 to US$ 1,580 in 2015. This has further led to a change in the consumer spending power and consumption habits. People are spending more on healthcare, hygiene, fitness, leisure which means an increase in the usage of medical products, sport wear, home textiles products etc.
Government has also taken some promotional steps to encourage the use of technical textiles in the country. For example, use of non-woven bags for packaging purposes, mandatory use of seatbelts in automobiles, announcement of mandatory use of airbags also in cars from 2018 etc. Further, government is also promoting investments in technical textiles through various measures like allowing 100% FDI in technical textiles, launching of schemes like TUFS, SITP, TMTT, schemes for promoting agro textiles and geotextiles in “North East Region” etc.
As a result of these growth enablers, technical textiles sector has grown at a CAGR of 12% over the last five years and segments like Geotech, Mobiltech, Meditech, Indutech, Buildtech, Packtech have shown double digit growth of 30%, 17%, 15%, 15%, 14%, 14% respectively over the same period and are expected to follow the same trend in the coming years.
India exported technical textiles products worth US$1,791 million in 2014-15 with a CAGR of 16% since 2007-08. Majority of exports from India are commodity products which are not very research and development intensive such as Indutech, Packtech, and Hometech which have a combined share of around 85% in the total exports of technical textiles. Higher focus on these commodity products is due to the fact that these products require low investments and there is an absence of the required technology and specialty fibres which are required in the manufacturing of advanced technical textile products.
Largest export markets include USA, UAE, Indonesia, China and UK
Way forward for the Indian technical textiles industry
Indian textile industry enjoys the strong presence of a complete value chain from fibre to garment manufacturing. This feature of our industry when coupled with the availability of skilled and cheap manpower provides it with a very firm base which can be leveraged to boost the technical textile sector of India. Also, the proactive approach of Government of India towards boosting this sector through various schemes will have a great positive impact on this sector in the future. An increasing focus on research and development in this sector by Textile Research Associations (TRAs) will help the industry in competing with the global market where the demand of innovative products is increasing.
It is important to understand that Indian technical textile industry is still in a growing phase. The true potential of the Indian market is yet to be realized, especially in sectors like defence, security, space & marine, health, roads and infrastructure, medical and health etc. This can be realized by creating a change in the consumer preference from conventional textile products to technical textile products thus increasing its consumption. Similarly, the global market for technical textiles is rapidly increasing which provides an opportunity for Indian industry to increase its exports. For achieving this, industry should focus more on manufacturing high end innovative products whose demand is in the global market.
However there are certain areas where the technical textile industry of India is lacking. Currently the majority of the technical textile products being manufactured and exported from India are commodity products. Although the focus on R&D has increased over the last few years but the required focus is still not present. Also, there is a dependence on import of technology for the manufacturing of most of the high-end technical textiles products. Absence of regulatory measures for usage of technical textiles, lack of technical knowhow, non-availability of indigenous high performance specialty fibres, absence of required skill set in the manpower, cheap imports of technical textile items from countries like China and the imports of high end technical textiles from USA and EU etc. are amongst other challenges faced by the Indian technical textile industry. Also, the absence of bilateral and multilateral agreements with major technical textile markets such as the USA and EU pose a challenge to the Indian technical textile industry in terms of exports.
Overall technical textiles offers huge opportunity for India in both domestic and export markets. To tap the market opportunity, Indian technical textiles companies need to focus on various areas like investments in modern technology, product research and development, manpower skill development etc. Government also needs to continue supporting the industry through investment promotion initiatives and measures to increase consumption of technical textiles across various sectors like automobiles, road infrastructure, healthcare etc.
Sumit Parmar, Associate Consultant
- Prakash, Principal Consultant