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Submitted By
Abhay kumar 12810001
Abhimanyu Malik 12810002
Abhinav Mishra 12810003
Abhishek Kumar Dubey 12810004
MBA1st Year
Department Of Management Studies,
IIT Roorkee

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2. 1Lx1lLL SLC1C8 LvCLu1lCn ln lnulA............................................................................................ 4
2.1 State of textile industry in India till independence .................................................................. 4
2.2 Post-Independence Era ............................................................................................................ 6
2.3 Current scenario ...................................................................................................................... 8
3. 1Lx1lLL lnuuS18? S18uC1u8L .................................................................................................... 11
3.1 Natural fibre Industry : .......................................................................................................... 11
3.2 Man-made Fibre (MMF) : ..................................................................................................... 13
3.3 Ready Made Garments .......................................................................................................... 14
4. LA?L8 ln 1Lx1lLL lnuuS18? ....................................................................................................... 16
3. CC81unl1lLS Anu CPALLLnCLS .............................................................................................. 18
5.1 Opportunities ......................................................................................................................... 18
5.2 Challenges ............................................................................................................................. 20
6. CCnCLuSlCn ................................................................................................................................. 22
7. 8LlL8LnCLS .................................................................................................................................. 23



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Textile industry of India had sown its seeds in the ancient Vedic era and the Harappa
civilization age, which has been proven in archaeological studies. In the early centuries the
famous Indian silk was traded to the western countries in return of spices by the barter
system. The export of Indian textile was extended in the regime of the East India Company
and raw material was traded to European nations in the times of the industrial revolution. The
Indian textile industry has risen to greater heights since then and has emerged as one of the
largest sectors in the Indian business environment.
The Indian textile industry is a complex & diverse structure complementary to the Indian
business environment as it combines this immense diversity into an effective crux. It forms
an essential part of the growing Indian economy with the size of the technical textile industry
reaching Rs.640 billion in 2010-11.India earns about 27% of its total foreign exchange
through textile exports, it also contributes about 14% of the total industrial production of
India. The textile industry also forms about 4% of the countrys GDP. It is also the second
largest employment generator of the country (after agriculture) & employs about 35 million
people in its ambit.

Source: Ministry of Textiles
To begin with in the early 1800s the industry was much unorganized till the late 90s, it was
only after the economic liberalization in 1992 that the scenario started changing. The positive
steps in improving the fiscal duty structure have contributed a great extent in the growth of
the sector.
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The growth rate of the clothing industry has almost doubled in the last 8 years and knitted
segment has grown faster than the woven segment and the hopes are pinned to this segment
to drive the textile industry and act as an engine of growth.
The steady flow of foreign exchange is one of the dominant features of the economic
contribution of the textile industry. Successive government policies have encouraged ways to
exploit our comparative advantage to increase exports.
The Indian textile industry can be divided into several segments:
Cotton Textiles
Silk Textiles
Woollen Textiles
Ready-made Garments
Hand crafted garments
Jute & Coir



Today, rapid changes in the world trading system have endangered the stability of the Indian
textile industry. In a world that is fast losing its traditional boundaries & boundaries seem
insignificant there is a need to bring about technological & structural changes.
Opening up of vast markets for Indian textiles that were earlier regulated has given us an
opportunity of free trade & secure our well deserved position of leaders in the world textile
arena.

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2.1 State of textile industry in India till independence
Textile industry in India dates back to 3000 BC when the pieces of woven cotton material
were found in the excavation at Mohanjo-Daro and Harappa by archaeologists. Evidences are
there that Indian cotton was exported from the Roman Empire era till 18th of the century. The
usage of printing block in India goes back to 3000 BC. Some historians claim that textile
printing has its origin in India. Indian export to China started in 4th century BC. The Roman
historian of 1st century estimated that total value of fabric exported from India to Rome is 15
million Rupees per annum and expressed his concerns that India is draining Rome of its gold.
Gujarat has been referred as a place where cotton fabrics of all hues and colours can be found
by Chinese traveller Chau Ju-Kua who visited India in 13th Century. The discovery of gold
and silver coins at Broach belonging to the Mamluk kingdom of Egypt and Syria, showcases
the flourishing trade between India and Arab countries where textiles were exchanged for
precious metals. According to Marco Polo, 13th century historian, textiles was exported to
China and South East Asia from Masulipattinam (Andhra) and Coromandel (Tamil) coasts.
Famous textiles such as Patola from Patan and Ahmadabad and decorative cotton from
Gujarat and Coromandel were desired by the royal families of Malaysia and rich traders of
the Philippines. In western India Surat emerged as a major distributor for Patola because of
being a port city. It was transported by the ships of the Dutch East India Company.
Portuguese also traded mainly in textiles with India namely- embroidered bedspreads and
wall hangings at the old mercantile capital of Bengal, (near modern Calcutta). Quilts of
embroidered wild silk such as Tassar, Munga or Eri on a cotton or jute ground, combining
European and Indian artistic designs were ordered by the Portuguese who had been attracted
to Bengal, by the quality of the region's textiles. Textiles from Golconda and other southern
part of India was also famous in European and other parts of Asia. By early 1600 Dutch and
English traders established themselves in Golconda. Kalamkaris - finely painted cotton
fabrics procured from the Masulipattinam city. Foreign traders were able to purchase the
fabric at 30% discount since the fabric was produced at Golconda itself .Another fabric which
was highly regarded is Palampores which is based on the theme of the tree of life.
During the 17th century the demand of Indian Chintz (multicoloured Indian print on cotton)
was in such a huge demand in Europe that the merchants have to persuade the government to
ban the imported cotton from India. Textiles were also produced in parts of India which were
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not coastal. These places were used to cater internal demands and carry on trade with foreign
countries through the land. Examples are Rajputs and Mughals.
Kashmir was famous for its woollen weaves and embroidery. Cities like Banaras, Ujjain and
Indore were known for their fine silks and brocades. Rajasthan excelled in patterned prints
and dyed cloths. Museums at Ahmadabad and Delhi showcases collection of Indian textiles.
Early textile machines produced in Germany and Britain were modelled on the basis of
Indias manually operated machines.
In 19
th
century once flourishing Indian textile industry began to decline. The reasons behind
the decline of Indian textile industry are - the invention of powerloom , monopoly East India
Company I, heavy tariff on Indian cotton exported to Britain, exemption of duty on British
staples imported into India and raising of duties on Indian goods from time to time. Below
data shows the decline of Indian cotton industry India-

Year 1814 1821 1828 1835
British cotton
imported, 1000
yards
81.8 1913.8 4282.2 5177.7

Year Export (1000 Pounds) Import (1000 Pounds)
1815 1300 26.3
1832 100 400

The modern textile industry had its origin in the early 1800s when the first textile mill in the
country was established at fort Gloster near Calcutta in 1818.
The first cotton mill In India was established in 1854 in Bombay by Parsi family. That
marked the start of modern cotton industry. Parsi where pioneer in early modern mill
establishment and they used to export their products to Asia and Africa. In 1861 the first
cotton mill was established in Ahmadabad which soon became a famous centre for textile
industry. Gujarati community played a crucial role in the establishment of Ahmadabad as a
major force in textile industry. In second half of 19
th
century cotton industry spread quickly
and there were 178 cotton mills. However the cotton industry was badly hit by great famine
in 1900s and many mills has to be closed. World wars proved to be a stimulus for Indian
textile industries supported by Swadeshi movement. , during the period 1922 to 1937 the
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industry was in bad shape as these mills owners changed. There was a steep increase in
number of mills from 178 to 249 during a period of 1901 to 1921.Consequently the number
of looms also had seen a rise to 13.35 lakhs from 4 lakhs during the period. By the end of the
world war number of mills operational were 417 and it gave employment to about 5 lakhs of
workers. The cotton textile industry is indeed a swadeshi indsutry as it was developed by
Indian businessman and capital during the struggle for freedom.Partition of India had
negative impact on the textile industries as 14 mills along with 22% of land producing cotton
where now a part of Pakistan.
2.2 Post-Independence Era
Post-independence, the textile industry made quick development under the various five year
Plans on government of India. In order to promote the growth of textile industry it has past
important acts.
Some of them are listed as below-
Central Silk Board Act, 1948
The Textiles Committee Act, 1963
The Handlooms Act, 1985
Cotton Control Order, 1986
Number of spindles rose to 22 million from 11 million during the tenure 1952 to 1982.
It increased further to well over 26 million by 1989-90.

In 1974 Multi Fiber Agreement was implemented as a short duration step for giving a limited
a time period to the developed countries for making adjustments in their textile industries so
that they can cope up with the stern competition faced by developing countries. The textile
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industries are characterized by their labor intensive nature of goods production. Availability
of surplus labor at low cost puts developing countries at an advantageous position. They can
supply goods at low price. The motive behind this policy was to remove all types of quota
system from the apparel and textile industry all over the world so that a level playing field
could be established.MFA was removed ion 01.01.2005.
The Indian textile industry went through major structural changes after the quota era. Many
industry expert expected Indian textile industry to grow at much higher rate and become a
major force in world.
Below bar graph showcases the production of fabric from year 2002 to 2007


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With the increasing understanding of the underlying strengths and weaknesses of the industry
arose a need for utilizing the opportunities and minimizing threats, the government has come
up with many policy measures. Some of them are listed as below
The Technology Upgradation Fund Scheme (TUFS) was enacted in April 1999 to
provide easy access to capital for technology upgrade by various sections of the
Industry.
In order to address the serious issues faced by core fabric of cotton like low
productivity,lack of storage capacity ,contamination e.t.c. the government has
enacted The Technology Mission on Cotton (TMC) was enacted in February 2000 .
Textiles Export Quota Policiy 2000-2004
National Textile Policy -- 2000
National Jute Policy-2005
Textile Export Quota Policy 2000-2004
2.3 Current scenario
In the 2nd decade of 21st century the prospect of Indian textile industry looks bright though it
has to overcome a number of roadblocks. Currently it contributes about 14 percent of
industrial production, 4% of Indias GDP and 17% of net export earnings. Production of raw
cotton grew to 32.5 million bales in 2011 from 28 million bales in 2007.While the production
of raw cotton rose to 1281 million Kgs in 2011 from 1139 million Kgs in 2007.India has
potential to increase its textile and apparel share in world from its current level of 4.5 percent
to 8 percent .During 2008-2009 recession textile industry was badly hit however it is on the
course of recovery.FICCI has projected CAGR of textile industry to be 9.5 percent and its
size to be $221 billion by 2012.
The Indian textile and apparel market worth $58 billion and is expected to grow at a rate of 9
percent. If it grows at the forecasted CAGR it will be worth $141 billion by 2021. Overall,
India's textile and apparel exports were at $31 billion in 2011 and are growing at an annual
rate of 10 per cent since 2005.Contribution of apparel export is the most in terms of revenue.
It is followed by the contributions from other types namely fibre, fabrics .However in recent
years in terms of cumulative annual growth rate fibre tops the list.
Below are the stats provided by ministry of textiles with respect to Indias recent
performance.
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.


One of the recent development in the field of textiles is the advent of FDI . Below data
presents the current FDI status in textile sector.


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India textile sector is very diverse and complex , from a technology point of view on one
hand it uses highly sophisticated modernized machines on the other hand we still use hand
spinning and weaving machine .According to ministry of textile , textile industry is highly
fragmented. In spinning 95% are under organized sector, but weaving and processing
operation is highly fragmented and most of the handlooms, powerlooms, hosiery and
knitting are in the unorganized sector .The fibre finishing centre is also dominated by Small
Scale Industry , nearly 90% of the processing house are in the unorganised sector. The
Composite mills consist of only 10% of the total textile industry. In the production of fibres
unorganized sector contributes more than 90%, but with the more usage of artificial fibre the
dependency on natural fires is decreasing



Broadly Textile industry can be divided into three parts Natural fibre and Man Made Fibre
and Ready Made Garments.
3.1 Natural fibre Industry B
It mainly comprises of cotton textile , jute textile , silk textile , wool and woollen textile .
Cotton textile constitutes 75% of total fibre consumption in spinning industry and overall it
constitute 54% of the total fibre consumption .Area under cotton cultivation has increased by
10 % compared to the previous year to 121.91 lakh hectares, the average yield has also
increased from 88kgs in 1950-51 to 555 kgs in 2007-08 still it is below the international
average of 778 kgs per hectare. The main reason of less yield is over dependent on rain for
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irrigation and the latest technological knowledge do not reach to the farming community.
The price of cotton is very encouraging in the last decade due to high demand of cotton both
in the national market as well in the international market particularly import demand from
China.

The cotton price had reached record high Rs 168 due to increased price the demand of
synthetic cotton has increased and the price of cotton settled to normalcy. According to Crisil
research the demand of cotton will continue to grow at a CAGR of 4.5 to 5.5 percent.
Jute is a major industry in Eastern India particularly in West Bengal, it is mainly used for
packaging its and demand is constantly increasing in the past decade. India is the largest
producer of Jute, the production of jute has increased by 28%.
Silk is an oldest textile industry; India is the 2nd largest producer of Silk after China. India
produces four varieties of silk mulberry, Erie, Muga and Tasar silks. Mulberry dominates
the silk industry with 80.2% .In 2011-12 the production of raw Mulberry silk has increased
by 11.2% YOY basic .Indian Silk textile industry is facing stiff competition from artificial
silk which is both cheaper and good in quality . In order to improve the quality of raw silk
and bring new technology government has established Central Silk board .The Central Silk
Board is doing research and development activity to improve the quality of silk even it is
collaborating with developed countries like Japan.
Wool and Woollen Textile: Wool textile industry is very small in India and India is the
seventh largest producer of Wool in the world. Woollen textile mills are mainly located in
northern India, around 40% of the woollen textile mills are located in Punjab, 27 % Haryana
, 10% in Rajasthan. The production of indigenous wool was 47 Million kg in the 2010-11.
India depends on imports for high quality wool particularly from Australia and New Zealand.
The wool processing sector is very un-organized due to which the production of wool has not
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increased as per expectation .The government has established the Central wool development
Board in Jodhpur to look into Woollen Textile industries.
3.2 Man-made Fibre (MMF) :
With the advent of new technology and increasing innovation the consumption and demand
of MMF is increasing, in international market the consumption ratio of natural fibre to
artificial fibre is 60:40 but in India it is vice versa. The total value added export market of
MMF is 146.7 billion USD in which India contribution is mere 3.3 billion USD .MMF
Textile constitutes 63 percent of the world trade but in India textile is still predominated by
cotton and MMF constitute just 16.4 percent.
Issues faced by the Indian MMF Industry
High Excise duty: Cotton and natural fibre are always favoured it in India, While cotton and
natural fibres exempt from excise duties. MMF is burdened with a high excise duty, in last
decade excise duty is reduced but still MMF has an excise duty of 8%.
Few players: There are very few players in the manufacture of MMF fibres in India.
Lack of indigenous specialized MMF: In spite of having potential we are dependent on
imports for high quality MMF such as nylon66, nylon 11, acetate etc.
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Low growth : In spite of having huge growth of MMF textile industry in international market
, the MMF domestic market has become stagnant .
Future Prospects of MMF Textile: With the demand and prices of food products increasing at
a very fast rate, the land under cotton cultivation is definitely going to decrease in the future;
with new technology and new product MMF textile industry have very high growth potential.
3.3 Ready Made Garments
With globalization , rising income and the ready-made garment industry has become an
important part of Indian textile industry , today ready-made garments constitute 40% of India
total export growth of ready-made garments is very robust and it is expected to grow at a
faster rate. Compare to the other segments in textile industry , ready-made garments have
high margin .
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In domestic industry the rural segment constitutes 54% of ready-made garments and urban
segment constitute 46% .The growth of domestic market size is very consistent at a rate of
6.4% CAGR. Like other sector of textile this sector is also very fragmented with numerous of
player. This sector is quite different from traditional textile sector design, marketing,
branding are key elements of this segment. Latest fashion and innovation are key for success
in this segment. The government has taken right initiatives by opening technical institute like
National Institute of Fashion Technology to increase the manpower and increase the technical
capability of Indian textile in the field of textile and fashion technology, Many new private
institutes is also coming in the field of textile and fashion technology. These institutes will
play a pivotal role in giving a new dimension to emerging ready-made garment sector














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India Textile industry is very diverse, the organised sector generally comprises of Composite
mills, Machine-made carpet manufacturing units, Combing units and Knitwear and woven
garment units .
Unorganised sector comprises of knitting units, Hosiery units,Hand-loom units, Power-loom
units, Hand-made carpets units and Independent dyeing and process houses.
According to statistics India is a having 1200 medium to large scale mills across India.


According to total sales turnover in 2012 top two companies in the textile sector are Alok
Industries and Vardhwan Group.
The government has taken the right step by allowing 100 % FDI in textile sector the
development of integrated composite mills has got a boost from government by giving
approval to set up exclusive textile based SEZs across India. For instance below mentioned
SEZ has been given approved exclusive for textile Sector : Brandix India Apparel City
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Private Limited , Visakhapatnam; Inspira Infrastructure (India) at Butibori Industrial Area
.,Nagpur; Deccan Infrastructure and Land Holdings Limited, Akutotapally and Mahabub
Nagar ; Alok Infrastructure Private Limited, Silvassa; Mahindra City SEZ , Tamil Nadu;
Surat Apparel Park ,Surat; Welspun Anjar SEZ Limited,Rajkot ; KIADB ,Hasan; Brandix
India Apparel City Private Ltd, Achutapuram ;Pradip Overseas Limited, Ahmedabad;
Mahindra World City,Jaipur; Orient Craft Infrastructure , Gurgaon;Jindal WorldWide
Limited,Ahmedabad; Gokuldas Exports Apparel and Textile Park Pvt. Ltd ,Bangalore.

























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5.1 Opportunities
India has potential to increase its textile & apparel share in the world trade from the
current 4.5% to approximately 8% and reach US$ 80 billion by 2020.
The rationalization of the fiscal duty structure would strengthen the composite sector
which has intrinsic strength in terms of economies of scale, higher productivity,
superior technology, skilled workforce and has capability of producing superior quality
goods.
Technical textiles are an important part of the textile industry. The operating team of
the Eleventh 5 year plan has approximated the market size of technical textiles to rise
from US$ 5.29 bn in 2006-07 to US$ 10.6 bn in 2012-13, without any regulatory
framework and to US$ 15.16 billion with regulatory framework. The Scheme for
Growth & Development of Technical Textiles targets to support manufacture of
technical textile to take advantage of global opportunities & cater to domestic demand.
The government plans to introduce US$ 44.21 million plan for uplifting of textile
industry, while the Finance ministry has passed an order of building new research
centers for the industry.
The global technical textile industry is pegged at US$127 billion and in India is
estimated to be around US$11 billion.
Government has allowed 100% FDI in textiles under the automatic route.
The Central Silk Board has planned 26,000 tons of raw silk production in 2012-13. It
has also planned to extend the area for silkworm plants to 0.25 million hectares, which
will add an additional 6400 MT of mulberry raw silk & increase employment.
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The market is likely to grow to US$31 billion by 2020, implying a CAGR of 10%. The
textile industry plays important role in growth of defence, railways, & other
government institutions.
The Government of India has proposed the establishment of several Centers of
Excellence for training the workforce in textile industry. These are aimed at creating
facilities for testing & evaluation and developing resource centers.

Calendar year wise break up for FDI approved by Govt. Of India from January 2000 March
2012

Year FDI approved Amount of FDI Approved (in Billion)
Rs US $
2000 47 2.321 0.054
2001 22 0.291 0.006
2002 28 0.657 0.014
2003 36 0.379 0.008
2004 20 1.098 0.024
2005 9 2.972 0.068
2006 7 0.647 0.015
2007 1 0.005 0.0001
2008 4 0.209 0.005
2009 2 0.284 0.006
2010 2 0.228 0.005
2011 2 0.191 0.004

Total 180 9.283 0.209

Updated on 07.09.2012
Source: Department of Industrial Policy & Promotion, Ministry of
Commerce and Industry, Govt. of India


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The nearing advent of FDI in retail will boost the FDI in textile & help the downward
trend (as shown in above table).
With consumer trends & per capita income on the incline, the retail sector has rapidly
grown in the past decade. Several international retailers are also focusing on India due
to its emergence as a potential market.

5.2 Challenges




While Indian exports are on the rise, profits are sliding as the prices have come down
by 8-20 % and the industry is on a verge of shakeout.
Importing nations now prefer suppliers with vertical production system rather than
spread out production facilities, Indian exporters are expected to work on their mass
production techniques.Of 1,500 Indian exporters only 15 have turnovers of $50
million plus.
Infrastructure development is the need of the hour. With power & water constituting
nearly 37 % of the cost, there should be proper supply in adequate quantities.
Subsidies to SMEs should be reinstated.
India also has to deal with inefficient port handling facilities. Competitors like China
with excellent infrastructure & port handling techniques have a competitive edge.
FDI in retail is an opportunity but if not handled well the MNC retailing organizations
may hijack the Indian garment industry & reduce India to an outsourcing center for
major textile & garment exports.
The recent bloom in technical textile has emerged as the major cause in the fall of the
handloom industry of our country. The local weavers & artisans involved in manual
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weaving are facing extreme internal competition from the power looms. If not andled
properly the handloom industry may die a premature death.
To offset competitive disadvantage the Indian textile industry will have to expand
vertically & set up scale of economic units while dealing with infrastructure
bottlenecks.

























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6. .32.@:;632
India has a long history of quality textile production right from the Indus valley
civilization.It suffered setback during the british rule because of unfair policies and
competition from powerloom and new tecgnology for production.However after
independence it flourished once again and now is a force to reckon with.In global textile
industry, India is still a small player contributing just 4.5 percent of the export.The major
global forces are China and USA.With increasing labor wage,aging population and
environmental concern Chinas domination in Textile is not sustainable for long.This really
gives a good chance for India textile industry in International market.In domestic market too
textile sector have huge growth potential.India domestic textile and apparel market is
growing at a rate of 10 % annually .With the huge availability of raw material in the country
, new technology , government support, educated and technically competent population India
textile sector's future looks very bright.




















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H0 5(8(5(2.(;
Ministry of Textile ,Annual Report.
Crisil Annual Report on Textile sector.
India Textile Report By: Dr. P. Chellasamy and N. Sumathi
http://texmin.nic.in/