ECONOMICS

PROJECT

TOPIC-: PREPARE A TREND ANALYSIS OF

GROWTH AND PRODUCTITVITY OF TEXTILE
INDUSTRY.

SPRINGFIELDS COLLEGE

SUBMITTED BY: SUBMITTED TO:

FARHEEN ZAIDI MRS. JHANAK SHARMA
XII-A
 ACKNOWLEGDEMENT

I would like to express my special thanks of gratitude to my

teacher Mrs. Jhanak Sharma who gave me the golden opportunity
to do this wonderful project on the topicPREPARE A TREND
ANALYSIS OF GROWTH AND PRODUCTITVITY OF TEXTILE
INDUSTRY. which also helped me in doing a lot of Research and I
came to know about so many new things I am really thankful to
them. Secondly I would also like to thank my parents and friends
who helped me a lot in finishing this project within the limited
time.

I am making this project not only for marks but to also increase
my knowledge .

THANKS AGAIN TO ALL WHO HELPED ME.

 INTRODUCTION
Indian history witnesses the glorious achievements of the textile
industry. Today the Indian textileindustry is one of the most
important and vital industry of our economy not only in terms of
outputbut also in terms of foreign exchange earnings and
employment generation. It contributes about 14percent to industrial
production, 4 percent to the GDP, and 17 percent to the country's
exportearnings. In the global textile market the major importers are
USA, European Union and Canada.Asia has been the principal
sourcing region for imports of textiles and clothing by both USA
andEuropean Union.

It wouldprovide direct employment to over 35 million people by

2010, which includes a substantialnumber of people from less
privileged sections of society.

India's Position in Global Textiles and Clothing Industry

India's position in the World Textiles Economy Second largest
producer of raw cotton.
Third largest producer of cotton yarn.
Third largest producer of cellulosic fiber/yarn.
Second largest producer of silk.
Fifth largest producer of synthetic fiber/yarn.
Largest producer of jute
 ANALYSIS
Indias Textile Exports
Indias textile and clothing industry is one of the main stays of the national
economy. It is also one of the largest contributing sectors of Indias exports
worldwide. The vision statement for the textile industry for the 11th five year plan
(2007-2012), inter-alia, envisages India securing 97% share in the global textiles
trade by2012.
The textile exports basket consist of cotton, wool, silk, jute, handicraft, coir man-
made fiber textiles etc. Further, the export basket consists of variety of items: cotton
yarn and fabrics, wool and silk fabrics, man-made yarn and fabrics, etc., of which
man-made textiles and silk showed the highest growth rate. Product wise textile
export performance given in Table.

Item/Ye 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
ar
Readym 4618. 5334. 5786.3 6034.3 7986.3 8282.2 9069.8 10383. 10064. 4735.0
ade 7 3 7 9 8 7 0 26 73 7
Cotton 3081. 3361. 3599.9 3544.1 4600.7 5564.1 6858.6 4803.5 5711.4 3017.2
9 4 5 6 8 5 3 2 1 6
Man- 1088. 1417. 1821.2 2050.7 2039.5 2398.9 3177.1 3325.8 3970.8 2043.0
Made 5 5 4 3 7 0 1 8 8 0
Silk 437.0 451.3 545.21 594.21 693.28 705.95 657.72 684.93 596.05 271.71

Wool 289.1 269.3 337.98 417.09 455.92 423.84 443.11 484.75 470.20 220.82
Handicr 737.0 1190. 1085.3 1013.8 1314.5 1364.9 1452.2 1090.7 961.67 512.96
aft 1 6 5 3 1 8 7
Coir 45.8 66.5 77.77 105.56 133.35 145.80 160.25 150.02 160.60 72.26
Jute 83.8 173.7 242.43 276.25 296.25 260.22 327.86 303.21 218.40 235.12

Total 1038 1226 13469. 14036. 17520. 19146. 22146. 21226. 22418. 11264.
Textiles 1.8 4.1 31 24 07 04 78 .34 79 58
exports
% -11.0 +3.98 +21.0 +3.97 +24.8 +9.28 +15.6 -4.15 +5.61
increase 4 7
/
decrease
The year 2000-01 had, however shown aremarkable growth of 15% over
the previous year exports. However, a declining trend has beennoticed in
the textile exports since the beginning of the year 2001, which is mainly
due to the
slow-down in the economies of some of the major importing countries
such as US and increasedcompetition from our neighboring countries like
china, Bangladesh etc. Indian textiles andclothing exports is facing various
constraints of infrastructure, high power and transaction cost,incidence of
state level cess and duties, lack of state-of-the-art technology etc. Textile
exportsduring the period of 2001 amounted to US$ 10381.8 million as
against US$ 12037.6 millionduring these month in the previous year,
recording a decline of around 11%. This indicates thedowntrend in textile
exports has been reversed and they are back on path of export growth.
Thetextile exports show the upward trend after 2002. Textile exports
during the period 2006, 2007,2008 were 19146.04US$ million, 22146.78
US$ million, 21226.34 US$ million recording agrowth of 9.28%, 15.67%,
4.15% as compared to the corresponding period of previous year.

Direction of Trade
The China has emerged as the fastest growing, single largest destination
for Indian textile andapparel in recent years. However, USA still remains
as the biggest importer of Indian textile itemsas it procured about 40% of
Indias textile exports in 2007- 08. Apart from the US, UK,
Germany,UAE, Italy, Bangladesh etc. are the major trade partners of
India. Export of textile products toBangladesh almost doubled in 2007-08
as Compared to previous year. Indian textile exports havebeen unevenly
distributed as majority of exports to USA preceded by UAE. Indian textile
exporthas increased to 618.21 US$ million in April-May 2009-10 to
759.27 US$ million in year April-May 2010-11.Country wise destination
of Indian textile exports is shown in table 2.
 (Value in US$ Million)

Country/Year 2000-01 2004-05 2005-06 2006-07 2007-08 2008-09 APRIL- APRIL-

MAY MAY
2009-10 2010-11
USA 2992.00 3376.78 4847.98 4787.45 4297.89 472.83 618.21 759.27
UK 782.37 1031.74 1403.30 1411.86 1525.87 148.66 262.21 262.77
UAE 884.92 1097.74 1022.79 1075.13 1247.34 547.23 226.77 313.29
GERMANY 706.98 806.83 1169.79 1120.58 1268.58 142.82 261.4 235.74
FRANCE 505.41 640.70 853.89 851.46 891.45 67.54 148.65 129.54
ITALY 450.74 650.15 834.74 916.31 807.37 85.50 102.9
CANADA 349.48 361.09 418.74 408.79 353.93 30.50 86.2
BANGLADESH 256.96 273.35 392.05 346.30 665.86 55.84 56.95 161.42
CHINA 120.11 557.57 209.11 61.62 102.63
SRILANKA 138.25 165.89 224.36 232.97 241.44 54.23

Sector wise Textile Export performance

READYMADE GARMENTS
Readymade garment exports were 4618.7US$ million, which represent a decline
10.4% ascompared to the corresponding period of 2000-2001. Readymadegarments
show the upward trendparticularly after 2004 when MFA phase out completely.
During the period 2007-08 and 2008-09the garment exports were 9069.80 US$
million, 10383.26 US$ million recording a growth rate9.50%, 14.48% compared to
the corresponding period of previous year. During the period April-September 2010
the readymade garment exports were 4735.07 US$ million.

Cotton Textiles

The cotton textiles exports in the year 1999-2000 and 2000-2001, recording a
positive growth of10.2% and 14.2% respectively over the previous years. But
during the 2001-2002, cotton textileexports have amounted to US$ 3081.9 million,
which represent a decline of 12% as compared tothe corresponding period of 2000-
2001. But after 2001 the cotton textiles exports show the growthpath particularly
after 2004 when MFA phase out. During the period 2007-2008, the cotton
textiles exports were 6858.63US$ million recording a growth rate 23.26%
compared to thecorresponding period of previous year. But during 2008-2009 the
cotton textiles exports4803.52US$ million represent with 29.96% decline. During
the period April-Sept 2010 the cottontextiles exports were 3017.26US$ million.

Man-Made Textiles

The man-made textile plays a very important role in our country. The exports of
man-made fiberSVtextile showed an increase of 18.8% in 1999-2000 and 28.1% in
2000-2001 over the same periodof previous year in dollar terms. During 2001-02
manmade fiber textile exports have declined by 4.2% in US dollar terms as
compared to the corresponding period of 2000-2001. The man-made
Fiber textile exports show the upward trend after 2005, because the MFA is
completely phase outduring 2004. During the period 2009-2010 the man-made fiber
textiles export were 3970.88US$ million recording a growth rate 19.39% compared
to the corresponding period of previousyear.
Silk Textiles Exports

The Silk textiles exports performance during 2001-2010 with graph given below:-

This is comparatively a small segment with exports having around US$ 270 million
during thepast few years. The exports of silk showed an increase of 37.7% in 1999-
2000 and 30% in 2000- 2001 over the same period of previous year in dollar terms.
During 2001-2002 silk textiles exports have declined by 8.4% in US$ terms as
compared to the corresponding period of 2000-01. The silk textiles exports show
the upward trend after 2002 but in 2007 the silk textiles exports US$ 657.72 million
recording a decline 6.83% compared to the corresponding period of previous year.
During April-Sept 2010 the silk textiles exports 271.71US$ million represent with -
12.97% declined.
Wool & woolen
The Wool & woolen textiles exports performance during 2001-2010 with graph given below:-

Exports of woolen textiles had been showing decline trend, which has been
attributed to sluggishmarket conditions, over-stocking in major markets etc. Exports
of woolen textiles decline by 33%in 1999-2000 over the same period of previous
year in dollar terms. However, the woolen textilesexports have shown an increase
of 27.6% in 2000-01 over the corresponding period of last year.During the period
2001-02 the woolen textiles exports have declined by 17% in US$ terms
ascompared to the corresponding period of 2000-01. The woolen textiles exports
performanceduring the period April-Sept 2010 US$ 220.82 million.

Handicraft Textiles
Handicraft is one of the sub-sectors which contributes substantially to the overall
textiles exports.During the period 2001-02 handicraft textiles exports declined by
22.4% in US$ terms ascompared to the corresponding period of 2000-01. The
handicraft textiles exports show theupward trend after 2004, but after 2007
thehandicraft textile exports indicates the downward trendin textiles. During the
period April-Sept 2010 the handicraft textiles exports were
512.96US$ million.

The Handicraft textiles exports performance during 2001-2010 with graph given below:-.

Coir Textiles
The Coir textiles exports performance during 2001-2010 with graph given below:-
The coir exports showed a negative growth in 1999-2000. However the coir exports
had recordeda growth of 4.6% in 2000-01 in dollar terms. During the period 2001-
02 indicates the downwardtrend in textile exports has been reversed and they are
back on path of export growth. In the year2009-10 the coir textiles exports were
160..60 US$ million recording a growth rate 7.05% ascompared to the
corresponding period of previous year. The performance of coir textiles
exportsduring April-Sept US$72.26 million.

Jute Textiles
The Jute textiles exports performance during 2001-2010

Jute textiles exports indicates upward trend has been reversed. During the period
2009-10 the jutetextile exports were 218.40US$ million recording a declined with
27097% as compared to thecorresponding period of previous year. During the
period April-Sept 2010 the jute textiles exports performance were 235.12US$
million.
 CONCLUSION

Analysis of the available data shows that Indian gains in world textile and
clothing trade in the ATC and post MFA era have not been commensurate
with its expectation by any reasonable yardstick. Indias performance in
textile and clothing with reference to EU and the US market was
substantially inferior in comparison with China.

The fact that Indias imports grew faster than its export and Chinas export
grew faster than its imports.Several factors are responsible for this.
These include:
(a) Indias inability to rise up to the occasion,

(b) Its poor capabilities and resources that inhibited it from moving
beyond the level of other competing developing countries and attaining a
stature comparable to Chinas,

(c) The myopic vision of Indian textiles and clothing enterprises about the
post-quota gains whereby they expected the gains to accrue to them even
as they did very little to ensure the arrival of these gains,

(d) The lack of strategic orientation of Indian textiles and clothing

companies due to which there was hardly any effort to understand the
strategies and the underlying success factors.