They face increased competition from Pakistan, where the currency exchange value has gone down, and from Bangladesh, where there is help from better state policies. And, from June, the American government withdrew the concession for India under its Generalized System of Preference (GSP), making Indian terry towel export to the US costlier by 10 per cent. Pakistan and Bangladesh continue to enjoy the GSP benefit.
“Reducing input cost was the only way to remain competitive,” explains Govind Zanwar, a terry towel maker in Solapur, Maharashtra, of the use of PET bottles and other recycled material. “By replacing part of cotton yarn from the input, our terry towels have become 30 per cent cheaper than those produced by Pakistan. Hence, we have become competitive in the US market despite GSP withdrawal.”
Both PET bottles and hosiery waste are adequately available in India. Also, primary processors of these wastes exist primarily in Tamil Nadu. Cotton prices have been elevated in India over the past year.
“There are four layers in terry towels. Both the side layers that are in touch with skin continue to be made of cotton yarn. But, yarn used to make the two inside layers which are replaced with PET bottles and hosiery waste,” said Rajesh Goski, chief executive at the Textile Development Foundation. Siddheshwar Gaddam, chairman of the body, said the use of cotton by the terry towel industry had come down from 100 per cent to 95 per cent, the rest being a blend with polyester. He thinks this blending could go up to 30 per cent.
The US takes 28 per cent of India’s overall textile export of $2.8 billion.