Professional Documents
Culture Documents
Statement Flow
1. 2. 3. 4. 5. Executive Summary Introduction Estimates of Opportunities for the Handloom Industry Investments and growth Agenda for Growth
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The following areas require support from Government, in collaboration with the industry, in order to enable the sector to become globally competitive and aid in achieving the Vision targets Facilitating capital investment through Extension of TUFS to handloom industry until FY2012 Reducing the cost of procuring working capital from institutional sources Establishing handloom parks Attracting IDI into the sector Accelerating investments in the marketing segment Strengthening the domestic textile market regulation through Indian Textile Labelling Act Addressing infrastructural constraints and reducing transaction costs Ensuring adequate availability of fibre for domestic consumption Facilitating manpower training The agenda for the handloom producers (master weavers, cooperatives and companies) is to drive competitiveness and customer acceptance through focus on strengthening supply chains, developing innovative designs, compliance with quality requirements, brand promotion and acquiring scale
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Handloom sector continues to employ large number of people in rural, semiurban and urban areas of India. In some states such as Andhra Pradesh, Tamilnadu, Kerala and Karnataka, Uttar Pradesh, Gujarat, Rajasthan, North Eastern States, Madhya Pradesh, Orissa, West Bengal, this sector is visibly large and dominant in certain categories of clothing. Market for handloom products is still large and wide. There is good domestic market as well as international market. There are die-hard consumers who would support handloom products for every reason they can hold onto. Handloom sector continues to provide direct and indirect employment. There are estimatedly 32 other sectors which are dependent on handloom production, in various ways, including transportation, financial services, marketing services, service and maintenance services, hotels, etc. Many handloom centres are well known tourist spots, drawing visitors from far places of India and foreign countries as well. Thus, part of the tourism industrys fortunes is also influenced by handloom sector and its fame. Handloom sector has umbilical linkage with cotton farmers and rural farm economy. Agricultural labour gets employment in handloom sector in nonagricultural seasons. Handloom sector has self-sustaining mechanisms, including training for young weavers, irrespective of gender. The inheritance of skills, resources and capacities is beyond the realm and reach of any modern training and educational institution. It is a facilitation process, which is not dependent on the government and or any modern formal institution. There is also sufficient flexibility for all types of communities to take up handloom production as a profession. Handloom sector is part of the culture and ethos of India and its glorious past. It has emotional bondage with nationalism and the champions of nationhood. It had a principal role in public opinion formation during the Independence struggle against the imported goods and imposed industrialisation. Handloom production has significant contribution to the national GDP and export earnings. Thus, it has some influence over the foreign exchange levels and the well-being of the economy.
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the treatment of raw materials, i.e. the production and preparation of various textiles fibres "Natural" fibres include cotton, wool, silk, jute, etc. the weaving of various products: carpets body wraps (sarees, dhotis, etc) dress materials the transformation of fabrics into products such as:
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garments home textiles (such as bed linen, table linen, toilet linen, kitchen linen, curtains, etc)
The distribution sector constitutes the last element of the sector and is therefore important for all handloom products which are sold to the final consumer. Although some handloom companies have set up their own distribution networks in the framework of their vertical integration strategy, the manufacturing and distribution sectors remain very different in their characteristics and nature, and should therefore be treated separately.
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The handloom sector has been subject to a series of radical transformations over the last few years, due to a combination of technological changes, evolution of the different production costs, and the emergence of important international competitors. Such changes are likely to continue in the foreseeable future, and the definitive elimination of subsidies which has been applied for the past two decades will bring in additional competition. In response to past competitive challenges, the handloom industry has undergone a process of restructuring and technological progress. Handloom weavers have improved their competitiveness by substantially reducing or ceasing mass production and simple fashion products, and concentrating instead on a wider variety of products with a higher valueadded. Moreover, handloom weavers are world leaders in markets for body wraps (esp. sarees), as well as for high quality textiles with a high design content. Competitiveness has also been retained by sub-contracting, or relocation of production facilities, to semi-urban and urban areas. The competitive advantages of the handloom sector are now found in a focus on quality and design, innovation and technology, and high value-added products. At the same time, globalisation and technological progress have led to the need to think of clustering strategy. Still playing an important role for some activities, cooperation at local, district or regional level has increasingly proved adequate to ensure that the chain of production remains at close geographical proximity to the markets. Therefore, clustering of its diversified activities is now also based on a wider geographical area. Handloom products generally have a positive quality mark-up. Equally the handloom industry has a leading role in the development of new designs. These trends towards higher value-added products need to be continued and accelerated, if the handloom sector in India is to remain competitive.
Dayanidhi Maran, Domestic consumption is what can drive any industry, it is not very particular to textile, be it any industry. Today if India is surviving the economic slowdown is because of the domestic consumption.
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Slow down in raw material exports, esp. cotton and cotton yarn
Skilled labour at low wages and growing market demand No major investments on infrastructure is required
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Market size potential for the Textile Industry is USD 110 bn by FY 2012
Overall market size to grow at more than 13% p.a. Export market growth would be driven by a 5.7% p.a. growth in world trade to USD 700 bn by CY2012 (USD 677 bn in CY2011) from USD 479 bn in CY2005
Domestic market growth to be driven by favourable demographics, rising income levels and increased penetration of organised retail
Increasing retail penetration Textiles and clothing retail comprise 40% of organised retailing in India
Higher disposable income levels Proportion of major consuming class (population with annual income > USD 2,000) has risen from 20% in FY 1996 to 28% in FY 2002; and is expected to move up to 35% by FY 2006 and to 48% by FY2010 Higher level of working women Propensity to spend in the case of working women is higher by around 1.3 times as compared to a housewife. According to census report, population of working women has increased to 26% in FY 2001 from 22% in FY 1991 Increase in nuclear families Average household size has decreased from 5.57 in 1991 to 5.36 in FY2001. Per household consumption increases as a result of formation of nuclear families this in turn would drive consumption and boost the retail industry Baby boomer effect The percentage of earning population (15 to 60 years) in the total population is rising. In FY 2000, the 15-60 age group boasted of 593 mn people i.e. 58.3% of the total population and over the next 15
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years, the strength of 15-60 age group is expected to increase to 782 mn, a share of 62.8% in the total population Higher growth & income levels in urban population At present, organised retailing is focused on metros and gradually expanding in Tier-2 cities. Over the next 10 years, growth in retailing is largely expected to take place in urban areas.
Urban population in 15-60 age group is expected to grow from 164 mn (18% of total) in FY 2000 to 287 mn (23% of total) in FY2015
Increased usage of credit cards Use of credit cards (plastic money) has increased significantly in last 3-4 years. Number of credit cards issued has grown at 26% p.a. in past 5 years while debit cards have grown by 113%. Increase in the installations of card machines will provide fillip to impulse apparel purchases
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Investments have lagged expectations because of Low returns Decreasing government budget allocations (from 23 percent in 1997 to 7 percent in 2009) Raw material shortages and price escalation Decreasing access to institutional working capital Unfair market competition
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Review of National Textile policy 2000 Reform programme for handloom support institutions Encouragement of efficient handloom co-operatives through classification Increase import duty on silk fabric Decrease duty on silk yarn
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