Indian sellers to miss Shanghai textile machinery fair


Ahmedabad : While the whole world of textile machinery will be in the spotlight in Shanghai for five days this July, the Rs.20 billion ($494.4 million) Indian industry will be conspicuous by its absence due to a downturn in its business fortunes.

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The prestigious Shanghai event – ITMA Asia + CITME 2008 – from July 27 to 31 is organised jointly by the European Textile Manufacturers Association (Cematex) and China Textile Machinery Association (CTMA).

According to the sponsors of the event, the fair will be attended by textile machinery associations from Japan, the US, Taiwan as well as representative units from Belgium, France, Germany, Italy, Netherlands, Spain, Sweden and Britain.

Although India is ranked seventh in textile machinery production, it is not participating in the show due to financial constraints caused by production crunch in the wake of fall in exports, thanks to the rupee appreciation by almost 15 percent.

However textile producers from Surat are proceeding to Shanghai to know what is the latest on offer in China.

“Most of the textile machinery makers in India are small and medium enterprises (SMEs) which are finding it difficult to sustain operations in the current difficult times. It costs between Rs.2 million and Rs.3 million to participate in the event,” S. Chakravarti, secretary of the Textile Machinery Manufacturers Association of India (TMMAI), told IANS.

“The other factor is that at present export of machinery from India to China is not possible because one has to set up shop in that country to sell products,” he added.

Chakravarti said Indian textile machinery manufacturers had participated in the September 2007 ITMA fair in Munich.

The fair had attracted 118,000 trade visitors from 149 countries to the New Munich Trade Fair Centre. About 45 percent of them had been first-time visitors.

TMMAI would organise a big machinery fair in India this November, Chakravarti added. Most of the machinery manufacturers have agreed to participate in the show.

People going to Shanghai were buyers of machinery and not sellers. “They go because they are interested in buying,” he said.

However, only a few from the textile industry have planned to visit the Shanghai show, he said.

According to the data available in 2006-07, the growth in production of textile machinery was 24 percent, which is expected to come down to 8-9 percent in 2007-08. There is more than 50 percent decline in orders for new machines.

With the rising rupee, Indian textile manufacturers have seen their profit margins eroding significantly. Production capacity remains unutilised. This in turn has had its impact on the orders for textile machinery from the domestic industry.

Orders from abroad have also come down and it is expected that the exports would fall from the previously estimated level of Rs.5 billion in 2006-2007 to below Rs.4 billion in 2007-2008.

The Federation of Indian Chambers of Commerce and Industry (Ficci) data shows that overall exports of machinery and handicraft items could fall by up to 50 percent.

The export price of Indian machinery is uncompetitive by 15 percent due to the rupee appreciation against the dollar. Moreover, due to increase in interest rates, the production cost of Indian machinery has increased by five percent.