Textile Industry Overview Textile Industry is one of the largest and oldest industries in India.

It has a significant role in India as it fulfils the essential and basic need of people. Textile Industry in India stands at unique place and has maintained a sustainable growth over the years. This is a self-reliant and independent industry and has great diversification and versatility. Textile Industry in India provides great contribution for the development of economy. It is the second largest textile industry in the world after China. It provides ample employment opportunities to people belonging to all classes. After agriculture this industry provides employment to maximum number of people in India employing 35 million people. Textile Industry represents the rich culture, tradition, heritage & economic well-being of country with diversified range and versatility. At the same time industry is competitive enough to fulfill different demand patterns of domestic and global markets. Indian Textile Industry plays vital role in country's economic development and contributes 14% to industrial production in the country. Textile Industry contributes around 4% of GDP, 9% of excise collections, 18% of employment in industrial sector, and 16% share in country’s export. Indian Textile Industry is valued at US $36 bn. The development of Indian Textile Industry started in 1985. This was the year, for the first time Textile sector was considered as an important industry and a separate policy was formulated for sector’s development. In the year 2000, National Textile Policy was announced. With further development Textile Industry came out of Quota Regime of Import Restrictions under the Multi Fiber Arrangement (MFA). This development came on 1st January 2005 under the World Trade Organization (WTO) Agreement on Textiles and Clothing. Because of the elimination of quota restrictions, most of the developing countries now can develop the potential market at both domestic and international level. These countries can develop the industry expertise and can have competitive advantage through implementing new technology, more skilled labor will improved distribution channel, cost effective operation and production with greater value addition in each step of value chain. Moreover it will help for Foreign Direct Investment in industry that will create great opportunity to strengthen the sector. Some of the strengths of Indian Textile Industry are large and potential domestic and international market, large pool of skilled and cheap labor, well-established industry, promising export potential etc.

HISTORY OF TEXTILE No one knows when exactly the spinning and weaving of textile began. It has been said that people knew how to weave even 27000 years ago. This was even before humans were able to domesticate animals. The oldest actual fragment of cloth found was in southern Turkey. People used fibers found in nature and hand processes to make fibers into cloth. Even though high technology was not available, skilled weavers created a wide variety of fabrics. Dyeing of fabrics was done to satisfy the universal human need for beauty. Within time, more complex social and political organization of people evolved. With the growth of cities and nations, improvements in technology came into place and there was a substantial development in the international trade, both of which involved textiles. Chinese textile was considered to be the most significant in international trade. Historians have claimed that silk from China has reached ancient Greece and Rome along a trade route called the Silk Road in the latter part of the second century B.C. and Egypt in 1000 B.C. The Romans also imported cotton from nearby Egypt and from India. Archeologists have found facilities for dyeing and finishing cotton fabrics in settlements throughout the Roman world. During the middle ages, the production and trading of the plant called ‘woad’, an important source of dye, was a highly developed industry. During the fifteenth century, Trade Fairs in southern France provided a place for the active exchange of wools from England and silks from the Middle East. The economic activities surrounding these events gave rise to the first international banking arrangements. Even the discovery of America was a result of the desire of Europeans to find a faster route not only to the spices but also to the textiles of the Orient. Textile trade quickly took root in America, as colonists sold native dyes such as indigo and cochineal to Europe and bought cottons from India. Although advances were being made in the technology of textile production, the manufacture of cloth in Western Europe in 1700 was still essentially a hand process. Yarns were spun on a spinning wheel and fabrics were woven by hand-operated looms. A major reorganization of manufacturing of a variety of goods occurred during the latter half of the 1700s in Western Europe. These changes, known as the Industrial ‘Revolution’, altered not only technology, but also social, economic, and cultural life. The production of textiles was the first area to undergo industrialization during the seventeenth and eighteenth centuries as the result of an economic crisis. Good quality textile products, produced inexpensively in India and the Far East, were gradually replacing European goods in the international market. In Britain, it became imperative that some means be found to increase domestic production,

to lower costs, and to improve the quality of textiles. The solution was found in the substitution of machine or nonhuman power for hand processes and human power. Many important inventions, most importantly spinning machines, automatic looms, and the cotton gin, improved the output and quality of fabrics. These inventions provided the technological base for the industrialization of the textile industry. Each invention improved one step of the process. For example, an improvement that increased the speed of spinning meant that looms were needed that consumed yarn more rapidly. More rapid yarn production required greater quantities of fiber. The growth of the textile industry was further hastened by the use of machines that were driven first by waterpower, then by steam, and finally by electricity. The textile industry was fully mechanized by the early part of the nineteenth century. The next major developments in the field were to take place in the chemist‘s laboratory. Experimentation with the synthesis of dyestuffs in the laboratory rather than from natural plant materials led to the development and use of synthetic dyes in the latter half of the nineteenth century. Other experiments proved that certain natural materials could be dissolved in chemical solvents and re-formed into fibrous form. By 1910, the first plant for manufacturing rayon had been established in the United States. The manufacture of rayon marked the beginning of the manufactured textile fibers industry. Since that time, enormous advances have been made in the technology for every field in the textile industry. Today, the textile industry utilizes a complex technology based on scientific processes and vast economic organizations. With the application of advanced technology to the textile field, textile use has expanded from the traditional areas of clothing and home furnishings into the fields of construction, medicine, aerospace, sporting goods, and industry. These applications have been made possible by the ability of textile scientists to utilize textile fibers, yarns, and fabrics for specific uses. At the same time that textile technology is making strides in new directions, the fabrics that consumers buy for clothing and household use also benefit from the development of new fibers, new methods of yarn and fabric construction, and new finishes for existing fibers and fabrics. Today, a huge international industrial complex encompasses the production of fiber, spinning of yarns, fabrication of cloth, dyeing, finishing, printing, and manufacture of goods for purchase. Consumers purchase many different products made of textiles. The story of the journey that these products make as they progress from fiber to yarn to fabric to finished

product is not just the story of spinning yarns, weaving or knitting fabric, or constructing the end product. It is also the story of a complex network of interrelated industries. HISTORY OF INDIAN TEXTILE INDUSTRY The history of textiles in India dates back to nearly five thousand years to the days of the Harappan civilization. Evidences that India has been trading silk in return for spices from the 2nd century have been found. This shows that textiles are an industry which has existed for centuries in our country. Recently there has been a sizeable increase in the demand for Indian textiles in the market. India is fast emerging as a competitor to China in textile exports. The Government of India has also realized this fact and lowered the customs duty and reduced the restrictions on the imported textile machinery. The intention of the government‘s move is to enable the Indian producers to compete in the world market with high quality products. The results of the government‘s move can be visible as Indian companies like Arvind Mills, Mafatlal, Grasim; Reliance Industries have become prominent players in the world. The Indian textile industry is the second largest in the world-second only to China. The other competing countries are Korea and Taiwan. Indian Textile constitutes 35% of the total exports of our country. The history of apparel and textiles in India dates back to the use of mordant dyes and printing blocks around 3000 BC. The foundations of the India's textile trade with other countries started as early as the second century BC. A hoard of block printed and resist-dyed fabrics, primarily of Gujarati origin, discovered in the tombs of Fostat, Egypt, are the proof of large scale Indian export of cotton textiles to the Egypt in medieval periods. During the 13th century, Indian silk was used as barter for spices from the western countries. Towards the end of the 17th century, the British East India Company had begun exports of Indian silks and several other cotton fabrics to other economies. These included the famous fine Muslin cloth of Bengal, Orissa and Bihar. Painted and printed cottons or chintz was widely practiced between India, Java, China and the Philippines, long before the arrival of the Europeans. India Textile Industry is one of the largest textile industries in the world. Today, Indian economy is largely dependent on textile manufacturing and exports. India earns around 27% of the foreign exchange from exports of textiles. Further, India Textile Industry contributes about 14% of the total industrial production of India. Furthermore, its contribution to the gross domestic product of India is around 3% and the numbers are steadily increasing. India

In addition to the above. and the export quality of its products is ever increasing. Textile Industry in India is a self-reliant and independent industry and has great diversification and versatility. handloom and hosiery. India earns about 27% of its total foreign exchange through textile exports. and cotton in particular. khadi as well as carpet manufacturing units in the decentralized sector. It also contributes around 3% to the GDP of the country. being major industries for the country. Composite mill is one where the spinning. It not only generates jobs in its own industry. which has now successfully become one of the largest in the world.. the industry will generate 15 million new jobs by the year 2015 India is a traditional textile -producing country with textiles in general. India is among the world’s top producers of yarns and fabrics. which makes it heavily dependent on the organized sector for their yarn requirements. but also opens up scopes for the other ancillary sectors. Indian Textile Industry Market India Textile Industry is one of the leading textile industries in the world. The decentralized sector is engaged mainly in the weaving activity. This decentralized sector is comprised of the three major segments viz. The organized sector of the textile industry represents the mills. there are readymade garments. . It also country. It is also estimated that. The opening up of economy gave the much-needed thrust to the Indian textile industry. but the scenario started changing after the economic liberalization of Indian economy in 1991. Textile Industry is one of the largest and oldest industries in India. It could be a spinning mill or a composite mill. India textile industry largely depends upon plays a major role in the economy of the the textile manufacturing and export. Further. Though was predominantly unorganized industry even a few years back.Textile Industry involves around 35 million workers directly and it accounts for 21% of the total employment generated in the economy. the textile industry of India also contributes nearly 14% of the total industrial production of the country. India textile industry is also the largest in the country in terms of employment generation. power loom. India textile industry currently generates employment to more than 35 million people. weaving and processing facilities are carried out under one roof. the organized mill sector and the unorganized decentralized sector. The textile industry can be broadly classified into two categories.

since the beginning of liberalization in 1992 to 1970. Apart from providing one of the basic necessities of life i. The woven products output will also rise in Central and Southern American countries. and to compete with confidence for an increasing share of the global market. sportswear. as the industrialization of India in other areas is managed by funds generated by the textile machinery industry. the industry tends to protect domestic producers of cotton with a clear objective continuous erosion of its prosperity. at a reasonable speed. however. including shirts. There is huge development foreseen in Indian textile exports from the $17bn attained in 2005-06 to $50bn by 2009-10. jeans. the 3rd largest producer of Cotton and Cellulosic Fibers/Yarn and 5th largest producer of Synthetic Fibers/Yarn. the textile industry contributes about 14% to the country's industrial output and about 17% to export earnings. Prospect Considering the continual capital investments in the textile industry. in major developed countries. However. The main objective of the textile policy 2011 is to provide cloth of acceptable quality at reasonable prices for the vast majority of the population of the country. The estimation for the exports in the current financial year is about $19bn. of India may extend the Technology Upgradation Fund Scheme (TUFS) by the end of the 11th Five Year Plan (till 2011-2012). India's textile industry is considered a pioneer in the industry. aiming exports of $50bn.e. On the other hand. skirts. Indian textile industry is massively investing to meet the targeted output of $85bn by the end of 2010. Weaving process is conducted to make fabrics for a broad range of clothing assortment. India is the largest producer of Jute. the 2nd largest producer of Silk. . in order to support the industry. as most European companies want to set up facilities near-by the emerging markets. such as China and India. It is the second largest textile industry in the world after China. Besides. the Govt. the output of woven products will remain stable. to increasingly contribute to the provision of sustainable employment and the economic growth of the nation. and Asia will be responsible for 85 percent output of this growth. another 50 million people are engaged in allied activities.The Indian Textile Industry has an overwhelming presence in the economic life of the country. After agriculture this industry provides employment to maximum number of people in India employing 35 million people. dresses. There is substantial potential in Indian exports of technical textiles and home textiles. cloth. The global demand for apparel and woven textiles is likely to grow by 25 percent by year 2010 to over 35mn tons.

The Indian Industry foresees huge demand for industrial woven products for medical and automotive applications. Home textile also contributes considerably in woven fabric in products assortments like curtains. dressing bandages. such as South Korea and Taiwan. table cloths etc. Indian cotton yarn manufacturers should rush forward for joint ventures and integrated plans for establishing processing and weaving facilities in home textiles and technical textiles in order to meet export target of $50bn. home textiles also will lure higher demand. Certainly. carpets. plasters etc. as well as in specialized apparels like protective clothing and sportswear. thus major facilities of cotton yarn are currently concentrating just on home textiles. Albeit. The medical applications include adhesives. It is been forecasted that the woven textile and apparel markets will sustain their growth from current till 2010.protective clothing etc. Special kind of woven fabrics are utilized in medical as well as industrial applications. It is mandatory. outerwear. nightwear and underwear. there are specific demands for home textile facilities also. Non woven sector has great future in terms of global demand. and a total textile production of $85bn by 2009-2010. along with some newly emerged economies. these sectors assures substantial demand for non woven facilities in India. . The imports of apparel and textiles will rise from developed economies like the USA and the western countries of Europe and Japan. including innerwear. Demand for woven fabrics is anticipated to be rise vertically in the sector of home textiles. medical etc. Woven fabrics are widely used in apparel assortments. resulting a prosperous future forecast for the textile industry in India. that the peak management of the cotton yarn manufacturers analyze the future prospect and growing graph of demand for non woven products. Apparel is the most preferred and important of all the other applications. automotive. furnishing fabrics. and also used in non-apparel uses like technical. Anticipating massive growth in medical and automobile sectors.. import growth has been witnessed vertical rise in the previous year. The 7th Five Year Plan has huge consideration on agricultural growth that also includes cotton textile industry.

from buying cloth to readymade garments -.especially forward integration -. Domestic acquisitions are on the rise. A recent entrant is Siyaram. Another growing phenomenon observed among Indian textile companies is the setting up of manufacturing facilities in strategic regions outside India. These two segments will be the key drivers of growth for Indian textiles.Expectations are high. which launched its readymade garments range in Nov 06. Readymade garment exports were worth US$ 8 bn in FY06 and will cross US$ 16 bn by the end of 2010. Strategic Initiatives Business integration -. but capitalising on the new emerging opportunities will be a challenge for textile companies. investments in textiles are expected to touch US$ 31 bn by 2010. where they can avail of duty concessions and reduce export lead-time. Acquisition is the most logical step towards integrating operations and building the value chain. especially in the readymade garments and home furnishings segment.have prompted several companies to move up the value chain into the finished products segment. The readymade garment segment will be the principal driver of growth even in the domestic industry. The Indian textiles industry has established its supremacy in cotton based products. Most of the large textile companies have opted for an inorganic growth strategy to scale up operations.by the larger textile companies has been prominent among Indian companies. following suit with other majors like Century Textiles and Raymond. The changing preferences of Indian consumers -. prospects are bright. and Ambattur Clothing taking over Celebrity Fashions. Some prerequisites to be included in the globally competing textile industry are: • • • • • Imbibing global best practices Adopting rapidly changing technologies and efficient processes Innovation Networking and better supply chain management Ability to link up to global value chains. Several companies that are engaged in fabric manufacturing are now keen to enter the readymade garments space. According to estimates. Some recent domestic acquisitions that have been executed in 2006 include KSL & Industries’ acquisition of Deccan Cooperative. while acquiring foreign assets is yet to gain traction. assuming a conservative growth of 15% per annum. Zodiac and Ambattur Clothing have .

This trend is seen primarily among the large domestic players. these countries have a wider base of exports and have done very well in the market for large volumes of uniform products. keep up with delivery schedules and meet their growing demand. 28% in South Korea and 36% in Taiwan. Consequently. An interesting commonality in countries with successful garment exports is that they have a much lower level of sub-contracting than India. process and manufacturing facilities. Raymond has set up a unit in Bangladesh to avail of the zero duty access to the EU. as compared to only 11% in Hong Kong. who are trying to achieve sizable scales in order to win orders from the large retailers in the US and EU. 20% in Thailand. Global retailers prefer large-sized companies that can scale up capacities consistently. Foreign Acquisitions by Indian Textile Companies Period May 01 Jun 01 Sep 01 Sep 03 Dec 04 May 05 Jun 05 Dec 05 May 06 May 06 Jul 06 Acquirer Arvind Mills Ambattur Clothing Raymond’s Jindal Polyester JCT Ltd Reliance Group Zodiac Clothing GHCL Malwa Industries Malwa Industries Welspun India Acquired Company License Of ‘Healthtex’ Kidswear Brand Of Vf Corpn (USA) Colour Plus (UK) Regency Texteis Portuguesa Limitada (Portugal) Rexor Group (France) CNLT Malaysia (Synegal) ICI Pakistan Ltd (Pakistan) Shirting Company Located In Alqoze Industrial Area (Dubai) Dan River (USA) Emmetre Industrial (Italy) Third Dimension Apparels (Italy) CHT Holding (UK) Tintolavanderie . 18% in China. A study during the 1990s found that apparel firms Future Outlook XXXIII in India subcontracted 74% of their output.set up facilities in the Gulf region to cut down on export delivery schedules to the European and US markets. They have clear preferences for companies with integrated design.

who have remained insulated from competitive forces so far.000. This will be the phase in which Indian textile companies will come under tremendous pricing pressures and tighter product delivery schedules. Implications for SMEs The new business dynamics have varying undertones across the value chain. rising demand and preference for ready-to-wear outfits in the domestic market will sustain a large number of units in this sector. the value-added segments of readymade garments. competition will become tougher. It will thus be essential for SMEs to align with these firms. The SMEs in the Powerloom and handloom sector will face significant churn in the future. The fragmented industry structure has in the past been beneficial in generating employment. . this will mean inefficient units losing out eventually. Nevertheless. will move up the value chain into weaving. but will be difficult to sustain in a globally competitive environment. India’s key assets include a large and low-cost labour force. home furnishings and made-ups will continue to grow. when quota restrictions on China end. while the more efficient and dynamic ones aligning with manufacturers or buyers. On the basis of these strengths. sizable supply of fabric. The segment that is likely to be hit is weaving. Post 2008. Spinning mills that account for 95% of the yarn and fibre production. A possible remedy could be for these weavers to align with bigger players or integrate operations that would ensure off-take of their products. This will be the most thriving segment in the industry and SMEs will play a key role. This will erode the viability of the hitherto protected Powerloom and handloom operators numbering over 400. India will become a major outsourcing hub for foreign manufacturers and retailers. sufficiency in raw material and spinning capacities. which can ensure a market for their products and new orders. For fabric manufacturers in the unorganised segment. with composite mills and large integrated firms being their preferred partners.Jul 06 Jul 06 Spentex Industries GHCL Tashkent-To’yetpa (Uzbek) Rosebys (UK) Tekstil Ltd The exports market will remain favourable for India till 2008. For readymade garment SMEs.

next only to agriculture. The Jute Sector: Jute Sector plays very important role in Indian Textile Industry.8% share in total world production. India is the 7th largest producer of wool. The Sericulture and Silk Sector: The Silk industry has a unique position in India. and has 1. reforms in labour laws and significant policy support will be essential. silk and Khadi). In India Silk is available . India is the 2nd largest producer of silk in world and contributes 18% of the total world raw silk production. The sector contributes around 62% of the total cloth production in the country and provides ample employment opportunities to 4. The Cotton Sector: Cotton is one of the major sources of employment and contributes in export in promising manner. carpet grade is 85%. It is the largest manufacturer of fabric and produces a wide variety of cloth. To tackle these factors. This sector provides huge employment opportunities to around 50 million people related activities like Cultivation. the Government will have to play a key role. India’s Cotton sector is second largest producer of cotton products in the world. The share of apparel grade is 5%. Textile Sectors in India: The Man-Made Fiber / Yarn and Powerloom Sector: This part of industry includes fiber and filament yarn manufacturing units.86 million people. Infrastructure development. and coarse grade is 10% of the total production of raw wool. The major part of the industry is rural based. The Industry is highly dependent on import of raw wool material. lengthy delivery times. Indian Jute Industry is the largest producer of raw jute and jute products in the world. India is the second largest exporter of jute goods in world. It is the second largest sector in terms of employment. It produces large variety of cloths to fulfill different needs of the market. due to inadequate production.Weaknesses of the Indian textile industry include fragmentation of the industry. and Processing. and plays important role in Textile Industry and Export. Jute is called Golden fiber and after cotton it is the cheapest fiber available. The Power looms sector is decentralized and plays a vital role in Indian Textiles Industry. Trade. The Handloom Sector: The handloom sector plays a very important role in the country’s economy. This sector accounts for about 13% of the total cloth produced in the country (excluding wool. delays in customs clearance and high transportation and input costs. The Woolen Sector: The Woolen Textile sector is an Organized and Decentralized Sector.

The refined cotton oil is also used as the edible oil but it is proved to be unfit for the human health. • Oil mill: in the operation the oil is extracted from the cotton seeds that are coming from the ginning process. resulting in the fibers being pulled away from the seed. non-integrated spinning. . • Ginning: Ginning is the process where cotton fiber is separated from the cotton seed. Tasar. Then it runs through cleaning equipment to remove leaf trash. finishing. Eri. This process involves the use of circular saws that grip the fibers and pull them through narrow slots. and Muga. India’s textile industry is comprised mostly of small-scale. cottage based and decentralized industry. It provides employment to a vast segment of craft persons in rural & semi urban areas and generates substantial foreign exchange for the country. Cotton varieties with shorter staple or fiber length are ginned with saw gins. weaving. This unique industry structure is primarily a legacy of government policies that have promoted labor intensive. and apparel-making enterprises. The pressed cotton seed oil cake is supplied as the cattle feed. Structure of India’s Cotton Textile Industry Unlike other major textile-producing countries. while preserving its cultural heritage. sticks and other foreign matter. Sericulture plays vital role in cottage industry in the country.with varieties such as. Mostly the cotton grown in India is from dry lands and crops mostly depend on the irrigation systems available and not only on the rain water. Long fiber cottons must be ginned in a roller gin because saw gins can damage their delicate fibers. It plays a significant & important role in the country’s economy. Mulberry. The crude is further modified as the biodiesel which could be used as the one of the energy source. small-scale operations and discriminated against larger scale firms: • Cotton farming and harvesting: Cotton is grown in tropical as well as sub tropical area in India. The first step in the ginning process is when the cotton is vacuumed into tubes that carry it to a dryer to reduce moisture and improve the fiber quality. Ginning is accomplished by one of two methods. It is the most labor-intensive sector that combines both Agriculture and Industry. The Handicraft Sector: The Indian handicrafts industry is highly labor intensive. The seeds are too large to pass through these openings. The cotton seeds coming from the ginning unit are then passed through the pressing unit and crude cotton oil is produced.

Average plant size remains small. with an average loom capacity of four to five owned by independent entrepreneurs or weavers. and fabricators (subcontractors). and other cloth preparation prior to the manufacture of clothing. manufacturer exporters. sometimes.” India textile industry is one of the leading in the world. manmade. or knitting units.• Spinning: Spinning is the process of converting cotton or manmade fiber into yarn to be used for weaving and knitting. 380. India’s spinning sector consisted of about 1. weaving and. printing.000 small-scale units classified as domestic manufacturers. Modern shuttle less looms account for less than 1 percent of loom capacity. Composite Mills: Relatively large-scale mills that integrate spinning. The share of exports is also expected to increase from 4% to 7% within 2012. Largely due to deregulation beginning in the mid1980s. About 276 composite mills are now operating in India. In India.14 billion in 2006-07.13 in 2007-08. most owned by the public sector and many deemed financially “sick.6 billion. Following are area.146 small-scale independent firms and 1.000 looms in the various composite mills. however. This sector consists of about 3. Overall. about 2. The textile export of the country was around US$ 19. “Power looms” are small firms.9 million handlooms. and technology outdated. • Weaving and Knitting: Weaving and knitting converts cotton.599 larger scale independent units. which saw a stiff rise to reach US$ 22. production and productivity of cotton in India during the last six decades: . Currently it is estimated to be around US$ 52 billion and is also projected to be around US$ 115 billion by the year 2012. India’s weaving and knitting sector remains highly fragmented. In 2002/03. or blended yarn into woven or knitted fabrics. and just 137. these types of mills now account for about only 3 percent of output in the textile sector. fabric finishing are common in other major textile-producing countries.000 “Powerloom” enterprises that operate about 1. spinning is the most consolidated and technically efficient sector in India’s textile industry. including about 2.7 million looms. small scale.100 independent units and 200 units that are integrated with spinning. The current domestic market of textile in India is expected to be increased to US$ 60 billion by 2012 from the current US$ 34. small scale enterprises. • Fabric Finishing: Fabric finishing (also referred to as processing). which includes dyeing. weaving. however. and labor-intensive.300 processors are operating in India. is also dominated by a large number of independent. • • Clothing: Apparel is produced by about 77. relative to other major producers.

00 280.62 56. The support price for H-4 (Long staple variety) has been fixed at Rs.per quintal. was fixed at last year’s level (2004-05) i. an increase of Rs.30 2004-05 87.77 2006-07 91.30 2002-03 76.00 244.00 179.24 1990-91 74. Rs.39 2000-01 85.per quintal for medium staple variety (F-414/J-34/H.20/.86 2005-06 86. it succeeded in producing 290 lakhs bales of cotton comparing to 315 lakhs bales last year.60 117.00 Yield kgs per hectare 92 124 106 170 267 278 308 302 399 470 478 521 567 526 1950-51 56.00 136.00 140.00 290.67 2003-04 76.00 315.41 47. the industry had to face adverse agro-climatic conditions. yet managed to retain its position as world's second highest cotton producer.1980/ .05 1980-81 78. Economic issues Prices of Cotton The Minimum Support Prices of Kapas (Seed cotton) for fair average quality announced for the cotton season 2005.Year Area in lakh hectares Production in lakh bales of 170 kgs 30.per .73 Though during the year 2008-09.00 158.78 1970-71 76.44 2007-08 94.48 1960-61 76.e.1760/.63 78.39 2008-09 93.00 243.2006 (Oct – Sept).777).76 2001-02 87.

the Indian textile industry will have a stronger place in both their export and domestic markets. Many worlds’ leading brands like Tommy Hilfiger. at present India is exporting more than 100 garment product range. hence developing countries like India will flourish in the new competitive atmosphere and as a result. and the production touched 243 lakh bales in 2004-05. and procured kapas equivalent to lint cotton of 27. Polo etc are sourcing products from India. Liz Claibome.30 lakhs hectares in 2003-04. grown in Haryana and Punjab has been fixed keeping in view the respective quality differential. it is a key input to the country’s economy. which peaked to a record 463 Kg. / lint per hectare during 2003-04. contributing to about 30 % of India’s exports and 14% of industrial productions. 2005. today. In 2004-05. Lint/hectare. persistence innovations. With huge investments. The MSP fixed for F-414/H-777/J-34 variety of kapas will be applicable only to Rajasthan. preserve continued growth for developing quality of life. The Cotton Corporation of India Ltd. From the manufacturing of raw materials to the delivery of end products. the cultivated area increased to 89. as compared to 76. expecting above 6% GDP in 2005. The price of this variety. Today the textiles and clothing industry engages an important position in India’s economy. latest product mix and planned marketing. as a self-dependent sector and with considerable value-addition at every stage of dealing. (CCI) undertook massive MSP operations throughout 2004-05 in all the cotton growing states. obtaining in these States. vis-à-vis Rajasthan. and it considered as the second largest vital sector of employment initiator after agriculture sector.00 lakh bales in 2003-04. India has come out as a flourishing outsourcing centre for textiles and apparel industry . Under the World Trade Organization (WTO) Agreement on Textiles and Clothing. All along with its usual yarn and fabrics. due to favourable seasonal conditions. there was a sharp rise in productivity. as compared to 179. Being the major foreign exchange earner having about 35% in its torso. it has gain it’s kind of position.quintal over support price of 2004-05.52 lakhs bales. the textile quota scheme of quantitative import limitations under the multi-fiber arrangement (MFA) came to an end on 1st January. as compared to 399 kg. Gap.20 lakhs hectares in 2004-05. Present Scenario Textile Industry is offering one of the most basic requirements of community and it possess importance.

62 billion in 2002-03 starting from small exports in 1954. the share moved up from 10. dismantling of quota system from 2005 era would hit upon India as a main global outsourcing hub. where Middle East accounted for over 32 percent of our exports and the share of the extremely quality conscious in European Union. Over the years. At present Indian exports of synthetic textiles to USA are rising at more than 90% yearly. and the MMF textile sector is the only sector where the performance has exceeds by the target fixed for this year by US $ 115 million. It has also been observed that export growth will be striking for major MMF textile items after dismantling of quota system from 2005. The export growth in 2002-03 matches up to the preceding year was in the harmony of 30 percent. Due to antidumping duty on the polyester filament fabrics obtained from Taiwan and Korea. Indonesia. Manufacturing capacity of Korea has declined by more than 30% in the polyester filament sector in 2002 and in 2003 and it is expected to turn down further more. At present Indian synthetic textile exports are targeting more than 175 countries worldwide. which will end with a turn down in their exports of polyester filament fabrics.11% in 1971 to 1. Furthermore.to meet the global requirement of the manufacturing fibers and yarns products. Korea’s export of synthetic textiles are turning down compared to previous year. approximately 23 percent. Competitive advantage & possible growth in Synthetic Textiles Sector India’s synthetic textile sector is relatively modern and has a high growth potential which will help India to coming out as a major outsourcing hub. Indian synthetic textiles are more and more accomplishing new markets along with keeping the market share in the existing markets.12% in . synthetic textile trade’s share of India is also seeing increasing. countries like Brazil. gaining of more opportunity for India will exists as a larger synthetic fabrics exporter. The export share of Indian synthetic textiles in worldwide increased from 0. In a view of the rising rapport with major global brands. the Indian MMF textile sector has built-up an export base.46% in 2001-02 and more to about 14% in 2002-03.38% in 2000-01 to 11. With a compounded annual growth rate of more than 22% the exports of MMF textiles have stretched out to a level of US $1. In the world. and the share of MMF textile exports in the total Indian textile export has also been raised.

The government would continue to encourage growth within the textiles industry as it holds huge potential for employment and exports.5 per kg. Infrastructural bottlenecks in terms of power. Pakistan and Indonesia 15 percent.  • • • • Average cotton yarn spinning cost at • US$ 2. all other segments are predominantly in decentralized sector. • • Highly fragmented and technology backward textile processing sector Highly fragmented garment industry Except spinning. Large seasonal orders cannot be taken because the labour strength cannot be reduced during the slack season. The rigid labour laws: proving a bottleneck particularly to the garment sector. . SWOT analysis of the textile industry Strengths Weaknesses • Strong and diverse raw material base  Third largest producer of cotton  Fifth largest producer of man-made fibre and yarn • Structural weaknesses in weaving and processing  • • • Vertical and horizontal integrated textile value chain Strong presence in entire textile value chain from raw material to finished goods Globally competitive spinning industry 2 percent of shuttleless looms as percentage of total looms as against world average of 16 percent and China. 9 percent and 10 percent respectively. Still there is an opportunity to explore new market segments like Latin America and Africa all along with maintaining the share in the established markets like European Union and USA. road transport etc.75 US$ per operator hour as compared to US$ 1 of China and US$ 3 of Turkey Unique strength in traditional handlooms and handicrafts Flexible production system Diverse design base • • • • Employment Generation The textile sector itself has the potential to create 1.1991 and more to about 3% in 2002. Inadequate capacity of the domestic textile machinery manufacturing sector. utility. This suggests the rising performance of Indian synthetic textile items in the worldwide market.2 crore employment opportunity over the next five years. Which is lower than all the countries including China Low wages: rate at 0. Big demand and supply gap in the training facilities in textile sector.5 billion in 2005-05 and US$ 4.3 billion in 2009-10. At this stage an annual growth expected to 15% for synthetic textiles and exports are expected to touch US$ 2.

Today textile sector accounts for nearly 14% of the total industrial output. The Scheme for Growth and Development of Technical Textiles aims to promote indigenous manufacture of technical textile to leverage global opportunities and cater to the domestic demand. cotton textiles have registered a growth of 5. The textile sector accounts about 30% in the total export. 4 per cent to the country's gross domestic product (GDP) and 17 per cent to the country’s export earnings. This conveys that it holds potential if one is ready to innovate. Total textile exports increased to US$ 18. It provides direct employment to over 35 million people and is the second largest provider of employment after agriculture. . Technical Textile Segment: According to the Ministry of Textiles. According to the Ministry of Textiles. with huge value-addition at every stage of processing. the cumulative production of cloth during April’09-March’10 increased by 8. Indian fabric is in demand with its ethnic.2 per cent and textile products including wearing apparel have registered a growth of 8.16 billion with regulatory framework. The Working Group for the Eleventh Five Year Plan has estimated the market size of technical textiles to increase from US$ 5. registering an increase of 4. Further.January’10.Textile Sector Contribution: According to the Annual Report 2009-10 of the Ministry of Textiles. the share of textile exports in total exports has increased to 12.5 per cent.6 billion in 201112.29 billion in 2006-07 to US$10.36 per cent during April’09-January’10.6 billion during April’09.5 per cent during April-March 2009-10. from the basic requirement of raw materials to the final products. It is an independent industry. according to the Ministry of Textiles. wool. As per the Index of Industrial Production (IIP) data released by the Central Statistical Organization (CSO). technical textiles are an important part of the textile industry.3 per cent as compared to the corresponding period of the previous year. without any regulatory framework and to US$ 15. Current Status The textile industry holds significant status in the India. Textile industry provides one of the most fundamental necessities of the people.7 billion during the corresponding period of the previous year. from US$ 17.95 per cent in rupee terms. the Indian textile industry contributes about 14 per cent to industrial production. earthly colored and many textures. silk and man-made fibre textiles have registered a growth of 8.

The straight 6 yards simple saree. where from the economy and the large profit comes in if the lowest end of the chain does not get paid with minimum per day labour charge. produces average dress material. it can be a slant cut while giving it a shape. with the cheapest of threads. It is an irony of course. It generates massive potential for employment in the sectors from agricultural to industrial. which can double the profit. . drape in with a blouse with embroideries and bead work. which costs only about 200 INR featuring fine floral and other patterns. Though it is an industry. to apply this fabric into a design with some imagination and earn in millions. Only thing needed is to give some directions to organize people to get enough share of the profit to spearhead development. It does not need any exclusive Government support even at present to go further. For an average person. expected to generate 12 million new jobs by 2010. It is an established fact that small and irregular apparel production can be profitable by providing affordable casual wear and leisure garments varieties. one may ask. the 30 % credit that the industry is taking for its contribution to Indian economy as good as 60 % this way. It is not necessary to add any design to it. The women of the house spin the thread. It has all the ingredients to go ahead. Maybe. Now. and weave a piece in about a week. What people at the upper stratum of the chain do is. Segments Textile industry is constituted of the following segments • • Readymade Garments Cotton Textiles including Handlooms (Millmade / Powerloom/ Handloom) Man-made Textiles Silk Textiles Woollen Textiles Handicrafts including Carpets Coir Jute • • • • • • The cottage industry with handlooms. it has to innovate to prosper.The textile industry is the largest industry in terms of employment economy. Employment opportunities are created when cotton is cultivated. then it becomes a designer¡¦s ensemble.

healthcare upholstery and furniture. and also there are good resources of fibres like polyester. It is one of the largest producers of cotton yarn around the globe. The country has a huge advantage due to lower wage rates. and it is one of the biggest exporters of yarns in the global market. The application that comes under technical textiles are filtration. • • • There is wide range of cotton fibre available. the textile industry is undergoing a substantial re-orientation towards other then clothing segments of textile sector. UK.Textile exports are targeted to reach $50 billion by 2010. Currently. seatbelts. Other markets include UAE. Having modern . which is commonly called as technical textiles. on closer look however. blood-absorbing materials and thermal protection. Availability of highly trained manpower in both. making the value addition to be profitable by 300 %. and other specialized application and products. It is moving vertically with an average growing rate of nearly two times of textiles for clothing applications and now account for more than half of the total textile output. adhesive tape. Russia. bed sheets and abrasive materials. Bangladesh and Japan. Germany. silk. At present. the market has become competitive. France. Canada. Because of low labor rates the manufacturing cost in textile automatically comes down to very reasonable rates. because of the lifting up of the import restrictions of the multi-fibre arrangement (MFA) since 1st January. management and technical. viscose etc. • The installed capacity of spindles in India contributes for 24% share of the world. and has a rapidly developing synthetic fibre industry. India has great competitiveness in spinning sector and has presence in almost all processes of the value chain. Strengths • India enjoys benefit of having plentiful resources of raw materials. The name of these countries with their background can give thousands of insights to a thinking mind. The slant cut that will be producing a readymade garment will sell at a price of 600 Indian rupees. $25 billion of which will go to the US. it sounds an opportunity because better material will be possible with the traditional inputs so far available with the Indian market. 2005 under the World Trade Organization (WTO) Agreement on Textiles and Clothing. The processes in making technical textiles require costly machinery and skilled workers. Italy.

which might be attained. However. it accounts about 25% of the world trade in cotton yarn. smaller companies do not have the fiscal resources to enhance technology or invest in the high-end engineering of processes. but their impact will be seen for some time more. The skilled labor is cheap in absolute terms. the examples of industry leadership are very few. It comprises suppliers of ready-made garments for both. Now. In many cases. India has provided a global manufacturing platform to other multi-national . have been gradually removed now. the foreign investment was kept out of textile and apparel production. In recent years. which made this deformation. The garment industry is very diverse in size. domestic or export markets. Despite the government policies. Secondly. offering foreign investors to set up manufacturing facilities in India. led substantial fragmentation that distorted the competitiveness of industry. most of the sectors now have been de-reserved. most of this benefit is lost by small companies. contributing 12% of the country's total exports. unreliable and inconsistent performance. manufacturing facility.functions and favourable fiscal policies. type of apparel produced. quantity and quality of output. cost. the Government has gradually eliminated these restrictions. which is led by small scale companies. Political and Government Diversity: The reservation of production for very small companies that was imposed with an intention to help out small scale companies across the country. • • The apparel industry is largest foreign exchange earning sector. and major entrepreneurs and corporate are putting-in huge amount of money in establishing big facilities or in expansion of their existing plants. however. Weakness Massive Fragmentation: A major loop-hole in Indian textile industry is its huge fragmentation in industry structure. Since most of the companies are small in size. The uneven supply base also leads barriers in attaining integration between the links in supply chain. by bringing down import duties on capital equipment. The industry veterans portrays the present productivity of factories at half to as low as onethird of levels. This issue creates uncontrollable. which can be inspirational model for the rest of the industry. requirement for fabric etc.

Despite some motivating step taken by the government. which put scissors on the sourcing quantities from India. This issue made others to impose quota and duty. . it can certainly provide a base for textiles and apparel companies. In past few years.companies that manufactures other than textile products. other problems still sustains like various taxes and excise imbalances due to diversification into 35 states and Union Territories. which will clear these imbalances once it is imposed fully. The inbound freight traffic has been also low. and it is anticipated that this movement will uphold the environment more favourable. Opportunities It is anticipated that India's textile industry is likely to do much better. However. Even the companies have often broken their business down into small units to avoid any trouble created by labour unionization. movement of containers are not at reasonable costs. Lack of trade memberships: India is serious lacking in trade pact memberships. For the foreign companies. an outline of VAT is being implemented in place of all other tax diversifications. China etc. Distant Geographic Location: There are some high-level disadvantages for India due to its geographic location. Turkey. Labour Laws: In India.though. which leads to restricted access to the other major markets. there has been movement gradually towards reforming labour laws. with companies having not more than ideal model to follow a 'hire and fire' policy. Since the consumption of domestic fibre is low. which affects cost of shipping . the growth in domestic consumption in tandem is anticipated with GDP of 6 to 8 % and this would support the growth of the local textile market at about 6 to 7 % a year. labour laws are still found to be relatively unfavorable to the trades. it has a global logistics disadvantage due the shipping cost is higher and also takes much more time comparing to some other manufacturing countries like Mexico.

Marks & Spencer and other industry giants are sourcing more and more fabrics and garments from India. Forecast till 2010 for textiles by the government along with the industry and Export Promotion Councils is to attain double the GDP. As a result of various initiatives taken by the government. such as Levis. India's cotton production increased by 57% over the last five years.26 billion and plan to invest another Rs.50. India's cotton production increased by 57% over . Indian silk industry that is known for its fine and exclusive brocades. is also adding massive strength to the textile industry. JC Penny. The Indian manufacturers and suppliers are improving design skills. The Government support has ensured fast consumption of clothing as well as of fibre. Anticipation As a result of various initiatives taken by the government. Indian fashion industry and fashion designers are marking their name at international platform. which has set aside $5bn for investment in improvisation of machinery.500 billion in the textile industry in the last five years. Nine textile majors invested Rs. Further.India can also grab opportunities in the export market. there has been new investment of Rs. International brands. Specialized textile parks. The regulatory polices is helping out to enhance infrastructures of apparel parks.000 shuttle-less looms were installed.6. which include different fabrics according to different markets. Alone Wal-Mart had purchased products worth $200mn last year and plans to increase buying up to $3bn in the coming year. Further. The industry is being modernized via an exclusive scheme. EPZs and EOUs. The industry has the potential of attaining $34bn export earnings by the year 2010. Nine textile majors invested Rs. A single rate will now be prevalent throughout the country. Gap. and 3 million additional spindles and 30. The industry is anticipated to generate 12mn new jobs in various sectors. and the export is likely attain $85bn. Wal-Mart.400 crore.64 billion. GAP is also sourcing from India.000 crore in the textile industry in the last five years. there has been new investment of Rs.2. Recent Trends The mood in the Indian textile industry given the phase-out of the quota regime of the MultiFibre Arrangement (MFA) is upbeat with new investment flowing in and increased orders for the industry as a result of which capacities are fully booked up to April 2005. The clothing giant from Europe.600 crore and plan to invest another Rs.

The industry expects investment of Rs. The textile industry is undergoing a major reorientation towards non-clothing applications of textiles. A Vision 2012 for textiles formulated by the government after intensive interaction with the industry and Export Promotion Councils to capitalise on the upbeat mood aims to increase India's share in world's textile trade from the current 4% to 8% by 2012 and to achieve export value of US $ 50 billion by 2012 Vision 2012 for textiles envisages growth in Indian textile economy from the current US $ 37 billion to $ 85 billion by 2012. The processes involved in producing technical textiles require expensive equipments and skilled workers and are. concentrated in developed countries. thermal protection and bloodabsorbing materials. . seatbelts. and multiple other specialized products and applications. for the moment. Technical textiles have many applications including bed sheets. creation of 12 million new jobs in the textile sector.400 billion in this sector in the post-MFA phase. and modernisation and consolidation for creating a globally competitive textile industry.1.000 shuttles-less looms were installed. and 3 million additional spindles and 30. which are growing roughly at twice rate of textiles for clothing applications and now account for more than half of total textile production. adhesive tape. known as technical textiles. filtration and abrasive materials.the last five years. furniture and healthcare upholstery.

 To ensure the growth of the Indian textile industry at 16 percent per annum in value terms.Vision Statement for textile industry (2007-2012)  To build world class. state-of-the-art. by the end of the Eleventh Five Year Plan.  To equip the textile industry to withstand the pressures of import penetration. and maintain dominance of the growing domestic market. manufacturing capacities and achieve a predominant global standing in manufacture and export of textiles and clothing. .  To secure a 7 percent share in global textile trade by the end of the Eleventh Five Year Plan. to US$ 115 billion.

manufacturing processes and the development of human resources. . To enable Small & Medium Enterprises (SMEs) to achieve competitiveness to face the global scenario with confidence. augment R&D efforts.  To provide a conducive policy environment which will encourage innovation.  To establish the Indian textiles industry as a producer of internationally competitive value added products. and enhance productivity through the upgradation of technology.

while the manmade Fibre Industry includes Polyamides. The Natural Fibre industry includes Cotton. Polyethylene. France. Global TextileMarket Overview The global textile market value is estimated to be US$ 4. Viscose and Acrylic. The objective is to trigger the foreign investment towards instituting textile units in India by offering numerous allowances to global investor like low-priced workforce and intellectual right fortification. The global fibre demand has decreased by one percent in 2008. the Indian textile industry symbolizes a strong existence in the complete value chain from raw commodities to finished products.63% to export revenues and 4% to the nation’s GDP. It has also formulated and endorsed the motto of “come.50 trillion during the year 2008. Union Ministry of Textiles certified Apparel Export Promotion Council (AEPC) has taken the responsibility to motivate the foreign investors to invest in Indian Textile industry by exhibiting it massive unexplored domestic market. It contributes more than 13% to industrial output. Wool. The global slowdown has also affected Textile industry adversely. while textile accounted for the balance 40%. The global textile industry grew at an estimated average annual rate of about 2. Global Fibre Scenario . Owing to the upright and straight incorporated textiles price chain. The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has taken all the required steps to meet the target of doubling the synthetic textile exports in India to US$ 6. Silk and Jute. It is observed that clothing accounted for about 60% of the market.5% during 2000-2008. Switzerland. In the year 2010. Polyester. and garment manufacturing by the end of 2015. 16. It is also observed that the global textile and clothing industry can be broadly divided into Natural Fibre and Manmade Fibre industry. the industry is estimated to produce 12 million jobs with an investment of US$ 6 billion in the fields of textiles equipments and structure. produce and sell in India”. Under this the ministry has decided to send it representatives to Germany.2 billion by seizing 4% of market share by FY 2011-12. The government of India has also taken few initiatives to promote the textile industry by permitting 100% Foreign Direct Investment in the market. invest.Future of Textile Industry in India The textile industry in India is one of the flourishing sectors of Indian economy. Italy and US.

The global fibre demand in 2003 was 641 Lacs MT. demand for natural fibre grew at a CAGR of 4. as Polyester offers high tenacity an strength which is most suitable for such applications.e. as now new capacities came up during this period.38%. given that its PCC is as low as 1. The demand for PFY grew at CAGR of 4. 93% and only 7% for non-apparel applications like home textiles. The demand for fibre grew at a CAGR of 5.a. As per detailed survey conducted by 'CRISINFAC' the domestic Polyester industry is likely to witness robust demand growth and higher profit margins in the next five years due to the following positive factors favouring Polyester Industry. Pakistan (3 . as we know. while the demand for manmade fibre grew at CAGR of 5. Excise duty reduction to encourage demand: Excise duty on POY has been progressively reduced over the previous few years to 16% and is expected to be reduced further which will further increase the price competitiveness of POY. The demand of nonapparel segment is expected to grow @ 20% p. India has a huge potential market. PFY industry. automotive an industrial segments as against 59% worldwide.65%. • Lower per capita consumption: The average per capita consumption (PCC) of fabric in India is much lower than in its neighbouring countries. silk and woollen yarns.50 Lacs MT during 2008. However.4 kg as compared China (5 kgs). fibre is mostly used for textile applications i.05% to reach an estimated 807. • • Price Competitiveness of Polyester: viz-a-viz other substitutes like cotton.21% to reach an estimated 1288523 Tons by the years 2008. had faced difficult market conditions during the years 1999-2002 due to excess capacity over demand which lead to cut throat unhealthy competition causing substantial erosion in profitability of these companies. It is noted that during the same period. PFY Demand in India The domestic demand for PFY stood at 1014755 Tons during the year 2003. • Increase of PFY in non-appeal segments: In India. the gap between supply and demand got gradually bridged up and POY manufacturing units/companies are doing reasonably well since beginning of 2002 and are expected to do much better during the next few years in view of the sustained demand growth.

Keeping in view the strong fundamentals mentioned above. about 70% is rural. India needs to strengthen its capabilities to tap this growing market as technology-intensive products are the future. Behaviour patterns suggest that most of the fabric demand in this segment is need-based. Manufacturing of manmade fibres globally is getting shifted mainly to China and India. women are moving from cotton saris to synthetic saris/dresses." a Ficci study said. Raising concern over India's share in the US imports of technical textiles and non-woven fabric which is way behind China. is also driven by fashion trends and favours more sophisticated textiles. on the other hand.8% Compounded Annual Growth Rate (CAGR). However. India has the advantage of a large an growing domestic market. and a good GDP growth. Rapid additions in downstream processing facilities leading to incremental demand.6 per cent and 1. industry body Ficci today said domestic industry needs research and development (R&D) support. The average urban spend on apparel is higher than rural spend. The urban demand.2 per cent. • Rapid urbanization: higher spend on clothing: In India. The chamber has submitted its . it said. the clothing pattern in India has shifted. India will be able to increase its presence in the International market. Men's clothing consumption has moved from the traditional cotton based wear to synthetic fabrics. over the years. respectively in 2009 compared to China's share of 15 per cent and 12 per cent. Likewise. out of the total population. The study said there is a need to formulate a comprehensive research and development (R&D) policy for the Indian textile industry. and variety in designs and colours. As China's domestic consumption almost matches its production. CRISINFAC has projected the POY industry grew at a healthy 7. "India's share in the US imports of special purpose fabric (technical textiles) and non-woven fabrics was merely 2.kgs) and Indonesia (5 kgs). • • • Levy of Anti-dumping duty on import of POY to lower threats of import leading to availability of better contribution to domestic manufacturers. Cotton dhotis are giving way to trousers (mostly made of polyester or polyester blends).

Ficci said that the policy should provide a special focus on eco-friendly textiles that would help in reducing carbon footprint." it said. During the year 2009-10. According to the Minister of State for Textiles. In the Union Budget 2010-11 presented in February 2010.7 million in the last three years. Also.5 billion and amount sanctioned under TUFS is US$ 18. which has triggered investment of US$ 45. The study pointed out that only a small portion of revenue of the Indian textile industry is derived by innovative or technology intensive products.2 million for the modernization of the textile industry. Panabaaka Lakshmi. in May 2010.9 billion of which US$ 16. The Scheme for Integrated Textile Park (SITP) was approved in July 2005 to facilitate setting up of textiles parks with world class infrastructure facilities. The council could be the apex body for undertaking and providing direction to research in textiles in the country.23 billion.4 billion has been disbursed so far till the end of April. The chamber has also recommended setting-up of a National Textiles Research Council with seed money of Rs 30 crore and an annual grant of Rs 10 crore. the competitive edge for Indian textile industry will come from adoption of new and advance materials with functional properties (like anti-microbial fabrics for patients dress) in the textiles sector.477 applications sanctioned. 2010. The cumulative progress as on December 31. investment under the Technology Upgradation Fund Schemes (TUFS) has been increasing steadily. 40 textiles park projects have been sanctioned under the SITP. "Development of eco-friendly and sustainable linkages is key to competitiveness.3 million has been incurred against allocation of US$ 220. Moreover. 2009. the Finance Minister made the following announcements to benefit the textile industry: . the study said. the Ministry of Textiles informed a parliamentary panel that it proposes to allocate US$ 785. "The policy should aim at increasing the country's share of advance technology-based products and high value-added items in global market to seven per cent in next five years from less than two percent currently. 1896 applications have been sanctioned at a project cost of US$ 5. Government Initiative for Textile Industry: According to the Ministry of Textiles. a cumulative expenditure of US$ 204. includes 27. under the SITP.recommendations to the Ministry of Textiles in this regard.

4 million. US $ 69. US$ 80. which was inaugurated in May 2010. Investments According to the Minister for Textiles. Mr Dayanidhi Maran.• The central plan outlay for the industry has been enhanced to US$ 1.03 billion. handicrafts and powerloom sectors.3 million for handicrafts and US$ 98.4 million is for TUFS. around US$ 5.26 million between April 2000 and March 2010. US$ 31. US$ 76 million for SITP. The textiles industry has attracted foreign direct investment (FDI) worth US$ 817.35 billion of foreign investment is expected to be made in India in the textile sector over the next five years. • • • • • Allocation for textiles and jute industry is US$ 713. • Private equity firms TPG and Bain Capital have picked up stakes in children apparel retailer Lilliput Kidswear for US$ 27 million and US$ 60. The apparel city is expected to attract an investment of US$ 1.7 million respectively.4 million for sericulture. produce and distribute the entire range of DKNY menswear apparel across the world except Japan for 10 years.2 billion (around Rs 5. The total allocation for village and small enterprises sector which include handicrafts and handlooms is US$ 210. Of this US$ 521. .2 million for handlooms. Customs duty at 4 per cent for import of readymade garments for retail sales has been withdrawn. • The Andhra Pradesh government has allocated over 1000 acres of land for the Brandix India Apparel City (BIAC) in the state’s special economic zone (SEZ).400 crore). The micro small medium enterprises in textiles sector have been given full CENVAT credit on capital goods in one installment in the year of receipt of such goods and the facility of payment of excise duty in quarterly basis. The new venture will invest US$ 25 million for expansion of Donna Karan’s menswear brand and expects to record sales of about US$ 140 million in the next three years. • S Kumars Nationwide has formed a joint venture (JV) with Donna Karan International to design.5 million has been provided for development of mega clusters in handlooms. according to data released by the Department of Industrial Policy and Promotion.3 million.

The National Textile Policy has also formulated • • • . Stressing on the diversification of production and its Upgradation taking into consideration the environmental concerns. plans to invest over US$ 217 million in India to open 12 more flagship outlets and 30 additional EPS (Exclusive Partner Stores) during 2010. Injecting competitive spirit by the liberalisation of stringent controls. Development of a firm multi-fibre base along with the skill of the weavers and the craftsmen. • • • • • Such goals are set to meet the following targets: • The size of textile and apparel exports must reach a level of US $50 billion by the year 2010. has 31 standalone stores across the country and plans to open 200 more such stores by 2015. The handloom industry should be boosted and encouraged to enter into foreign ventures so as to compete globally. which started its stand-alone retail chain in India in 2008. The Technology Upgradation Fund Scheme should be implemented in a strict manner. The Ministry of Textiles in India has formulated numerous policies and schemes for the development of the textile industry in India. Triumph International. Encouraging Foreign Direct Investment as well as research and development in this sector. The brand. Government policies relating to textile industries in India The Indian textile industry is one of the largest industries in the world. Maintenance of a leading position in the domestic market by doing away with import penetration. Some of them are detailed in the following sections. World's leading lingerie brand. The garments industry should be removed from the list of the small scale industry sector. National Textile Policy The National Textile Policy was formulated keeping in mind the following objectives: • Development of the textile sector in India in order to nurture and maintain its position in the global arena as the leading manufacturer and exporter of clothing. Germany-based.• Italian sportswear maker Lotto is planning to invest US$ 10 million over the next five years to capture 7 per cent of India’s branded sports apparel and equipment market.

this boosted the annual growth rate of cloth production by 7. Steps have also been taken to raise silk to the international standard.13%. decentralized sector. urban areas and rural areas. To maintain a competitive global market Thrust areas Government of India is trying to promote textile industry by giving emphasis on several areas of textile. Special care is also taken to curb the fluctuating price of raw materials. organized sector.32% and per capita availability of fabrics by 3. and its major contribution to the economy of the country.6%. • To understand its immense potentiality for creating employment opportunities in significant sectors like agriculture. • To recognize the Textile Policy of 1985. which are as below: • • • • • • • • • Innovative marketing strategies Diversification of product Enhancement of textile oriented technology Quality awareness Intensifying raw materials Growth of productivity Increase in exports Financing arrangements Creating employment opportunities .rules pertaining to certain specific sectors. To produce good quality cloth for fulfilling the demands of the people with reasonable prices. Some of the most important items in the agenda happen to be the availability and productivity along with the quality of the raw materials. from producing raw materials to delivery of finished products. export of textile by 13. industry. To give a different specification to the objectives and thrust areas of textile industry. To acknowledge textile industry as a self-reliant industry. specifically for women and deprived. • • • • To analyze the issues and problems of textile industry and the guidelines provided by the expert committee set up for this specific purpose. Preamble • • To comprehend the purpose of textile industry that is to provide one the most basic needs of the people and promote its sustained growth to improve the quality of life.

3. To materialize these targets. Information Technology: Information technology plays a significant role behind the development of textile industry in India.• Human Resource Development Efforts Government of India has set some targets to intensify and promote textile industry. The target is to increase 50% productivity and maintain the quality to international standards Establish the Technology Mission on jute with an objective to increase cotton productivity of the country Encourage private organization to provide financial support for the textile industry Promote private sectors for establishing a world class textile industry Encourage handloom industry for producing value added items Encourage private sectors to set up a world class textile industry comprising various textile processing units in different parts of India Regenerate functions of the TRA (Textile Research Associations) to stress on research works. which are as follows: • • Textile and apparel exports will reach the US $ 70 billion mark by 2015 All manufacturing segments of textile industry will come under TUFS ( Technology Upgradation Fund Scheme) Increase the quality and productivity of cotton. Other thrust areas 1. Ministry of Textiles. 2. cotton growing states are primarily responsible for implementing this target. • • • • • • • Government policy on cotton and man-made fiber One of the principal targets of the government policy is to enhance the quality and production of cotton and man-made fiber. efforts are being made. IT (Information Technology) can promote to establish a sound commercial network for the textile industry to prosper. Financing arrangement: Government of India is also trying to encourage talented Indian designers and technologists to work for Indian textile industry and accordingly . Human Resource Development: Effective utilization of human resource can strengthen this textile industry to a large extent. Ministry of Agriculture. Government of India has adopted some effective policies to properly utilize the manpower of the country in favour of the textile industry.

which will eventually reach the target of US $ 115 billion by 2012. India agreed to reduce tariffs on Textile & apparel and remove all the restrictions on these products. The clothing and apparel sector are expected to grow at a rate of 21 %t in value terms. Tariff policy India & US have reached on an Agreement for reciprocal market access commitments for Textiles and Apparel with the negotiation of the WTO Agreement on Textile & Clothing. 1986 The Textile Undertakings Act. and Home Textiles. Blended. The textile industry is presently experiencing an average annual growth rate of 9-10% and is expected to grow at a rate of 16% in value. It provides elimination of Quota system of Textiles & Apparel from 1st January 2005.) Apparel products are free from Excise Duties & various Taxes.government is setting up venture capital fund in collaboration with financial establishments. Acts Some of the major acts relating to textile industry include • • • • • Central Silk Board Act. 1985 Cotton Control Order. . Government of India reduced tariffs on Manmade Fibers & Filament • • • Yarns from 35% to 20% Cotton Yarn from 25% to 20% Spun. 1948 The Textiles Committee Act. and Woolen Yarn from 40% to 20 % India agreed to bind its tariffs on 265 textile & apparel products (Textured Yarns of Nylon & Polyester. Sportswear. Under Indo-US Agreement of 1st January 1995. Filament Fabrics. 1995 Government of India is earnestly trying to provide all the relevant facilities for the textile industry to utilize its full potential and achieve the target. From 1st April 2000. 1963 The Handlooms Act.

textiles.83% which includes 30% basic duty. Govt.5%. consumer goods and apparel. Duty on other Filament yarns will be remain at 10%. Removal of surcharge on income tax on all firms and companies with a taxable income of Rs. 16% additional duty and 4 per cent special additional duty. Custom Procedures: . Customs duty on Raw Materials such as DMT.5%.1 crore to Rs. Most of the products fall under HS code 61 and 62 carry an import duty of 56.1 crore or less. revised Exim Policy on 31st March 1999 by eliminating Import Licensing Requirements for 894 consumer goods. agriculture products and textiles. Customs duty on Polyester Staple fibers is reduced from 10% to 7. For Small Scale Industries there is Full Exemption Limit being increased from Rs. CST rate reduced from 4% to 3% with effect from April 1. PTA and MEG reduced from 10% to 7.429 agriculture.50 crores. On 28th December 1999 India and Us signed an Agreement for the elimination of import restrictions of 1. 2007.1. Duty on other Man Made Staple fibers will be remain at 10%. Excise duty on Nylon Chips has been reduced from 16% to 12%. Currently. Import Licensing: India has liberalized its Import regime for Textiles and apparel. Optional excise duty on Nylon Fish Net Fabrics is increased from 8% to 12%. Customs duty on Polyester Filament Yarns is reduced from 10% to 7. India removed restrictions on 715 tariff items as of 1st April 2000. Apparel & Made-up textiles goods require a Special Import License (SIL).Grey Fabrics and certain Cotton Yarns are exempt from basic Excise Duty. Excise Duty Exemption on specified Textile Machinery Items is withdrawn and 8% Excise Duty is imposed.5%. but some of the part is still limited for market access. there is no import restriction for yarns & fabrics items.

. RBI also provides Post-Shipment Financing through commercial banks at preferential rates by presenting export documents. The Govt. Depending upon the export commitment GOI provides them a license to import capital goods duty-free or preferential rates of duty. Units under SEZs may engage in Manufacturing. There is 5-year tax holiday to any industrial unit in EPZs. The Marking must appear on the face plate of each piece of cloth. The Man made fiber cloth must indicate whether it is made by spun or filament yarn. According to textile regulation passed on 22nd July 1998 by GOI. Pre and Post Shipment Financing: The Reserve Bank of India provides Indian Exporters PreShipment Financing through commercial banks for purchasing raw materials and packaging materials by presenting Letter of Credit. and Packaging Requirements: Marking. Pre-Export credit requires the beneficiary firm has exported during the preceding 3-year period. and they can sell in the domestic market on payment of duty as applicable to imported goods. Labelling. Export Promotion Capital Goods Scheme: This scheme is available to export companies and traders who provide the GOI with information about which type of goods and what value of Capital Goods they will import. The Post-Export credit is a transferable credit that exporters of finished goods can use to pay or offset custom duties on imports of any unrestricted goods.Marking. and washing instructions. Cloths must be remarked with the name & address of manufacturer. Yarns. the exact composition of cloth. length in meters and width in centimetres. EXIM Policies: Duty Entitlement Passbook Scheme: DEPS is available for Indian Export Companies and Traders on a Pre-Export and Post-Export basis. Units are exempt from routine checking of exports by customs. The language for marking must be in Hindi and English with international numerals. and Packaging Requirements for Textile products are technically complex and difficult to implement. has allowed 100% Foreign ownership of units under EPZs and SEZs. The month & year of packaging. and Fabrics to have the statutory markings and these markings should not mislead the consumers. Govt. In EPZs units can import goods free of custom duty. of India has established Export Processing Zones (EPZs) and Special Economic Zones (SEZs). Export and Special Economic Zones: Govt. Labelling. Trading and Services. And they also inform what will be the outcome of export they expect to produce from those imports. a description of cloth. For instance. sort number. considers SEZs as foreign territory for trade and tariff purpose.

24 lakhs. • • • • • 100 per cent FDI allowed through the automatic route. own and operate model with the government meeting 40% of the total cost of setting up the centre with maximum investment of Rs. Exporters can get refund of the excise and import duty. some of the new initiatives include the facility center for exporters and entrepreneurs in the Public Private Partnership (PPP) mode on build. . So far sanctions to register 20 items have been issued under the Act. Technology Up gradation Fund Scheme (TUFS) has been launched to facilitate the modernization and up gradation of the textiles industry. This development came on 1st January 2005 under the World Trade Organization (WTO) Agreement on Textiles & Clothing.Duty Drawback Scheme: The basic objective of this scheme is to reduce the indirect taxes on exports. 50 textile parks are being established to enhance manufacturing capacity and increase the industry's cost competitiveness. Technology Mission on Cotton has been launched to make available quality raw material at competitive prices. • For the handicraft sector. De-reservation of readymade garments. A cluster approach for the development of the handloom sector has been adopted from the year 2005-06 onwards. in the city of Ahmedabad to encourage exports to overseas markets. Measures have been initiated for protection of handloom items like Banarasi brocades. 1999. the Government has introduced a number of progressive steps. Scheme for Integrated Textile Park (SITP) has been started to provide world-class infrastructure facilities for setting up their textile units through the Public Private Partnership model. In an effort to increase India's share in the world textile market. Jamdani of Bengal etc. under the Geographical Indications of Goods (Registration and Protection) Act. hosiery and knitwear from the SSI sector.. • • • • The Indian Textile Plaza is being built. Through this scheme they can be more competitive and have more potential market. Reform measures and Policy initiatives: The Textile Industry came out of Quota Regime of Import Restrictions under the Multi Fibre Arrangement (MFA).

storage godowns.• In the Wool Sector. The NTP 2000 aims to improve the competitiveness of the Indian textile industry in order to attain $50 billion per year in textile and apparel exports by 2010. GOVERNMENT POLICIES. It is expected that. the Jute Technology Mission was started during the year 2006-07 with Mini Missions being implemented by the Ministry. development of human resources for the jute industry etc. • In the Jute Sector. National Jute Policy-2005: The objectives of the policy are to: • Enable millions of jute farmers to produce better quality jute fibre for value added diversified jute products and enable them to enhance per hectare yield of raw jute substantially. that had governed the extent of textile trade between nations since 1962.86 The NTP 2000 opens the country’s apparel sector to large firms and allows up to 100 percent FDI in the sector without any export obligation. 2000. The focus of the mission is on improvement of the yield and quality of Jute Fibre. National Textile Policy 2000 Faced with new challenges and opportunities in a changing global trade environment. expired on 1 January 2005. . developing prototypes of machinery with private sector involvement. • Facilitate the Jute Sector to attain and sustain a pre-eminent global standing in the manufacture and export of jute products. establishing market infrastructure. SCHEMES AND CORPORATIONS FOR PROMOTING TEXTILE INDUSTRY IN INDIA: The Multi-Fibre Agreement (MFA) The Multi-Fibre Agreement (MFA). post-MFA. The prize is the $360 bn market which is expected to grow to about $600 bn by the year 2010 – barely five years after the expiry of MFA. most tariff distortions would gradually disappear and firms with robust capabilities will gain in the global trade of textile and apparel. the GOI unveiled its National Textile Policy 2000 (NTP 2000) on November 2. a project in public private partnership mode was approved for setting up processing and finishing facilities for shawl manufacturers at Ludhiana in Punjab.

• • Increase the quantity of exports of jute and jute products by achieving a CAGR of 15% per annum. and marketing.• Enable the jute industry to build world class state-of-the-art manufacturing capabilities in conformity with environmental standards. as well as research and development in the sector. • • Expand productive employment by enabling the growth of the industry. This policy includes fiscal and other trade and investment incentives contained in various programs Duty Entitlement Passbook Scheme (DEPS) DEPS is available to Indian export companies and traders on a pre. Involve and ensure the active co-operation and partnership of State Governments. design. Export-Import Policy The GOI’s EXIM policy provides for a variety of largely export-related assistance to firms engaged in the manufacture and trade of textile products. Entrepreneurs. provided that the firm exports at least six times the c. an integral part of the entire value chain of jute and the production of jute goods. value of the imported capital goods within 6 years. for this purpose.f.i. . Any textile firm planning to modernize its operations had to import at least $4. which permits a firm importing new or Second-hand capital goods for production of articles for export to enter the capital goods at preferential tariffs. Financial Institutions. and Farmers’ Organizations in the fulfilment of these objectives. and capabilities of our weavers and craftspeople engaged in the manufacture of traditional as well as innovative jute products. and. to encourage Foreign Direct Investment. The post-export credit is a transferable credit that exporters of finished goods can use to pay or offset customs duties on subsequent imports of any unrestricted products. the GOI set up the Export Promotion Capital Goods (EPCG) scheme. skills. • Sustain and strengthen the traditional knowledge.and post-export basis.6 million worth of equipment to qualify for duty-free treatment under the EPCG scheme. and thereby facilitate the industry to achieve international standards in terms of quality. The pre-export credit requires that the beneficiary firm has exported during the preceding 3 year period. Make Information Technology (IT). Export Promotion Capital Goods (EPCG) scheme To promote modernization of Indian industry.

They have co-opted 148 leading commercial banks/cooperative banks and financial institutions like State Finance Corporations and State Industrial Development Corporation etc. Guidelines of the revised Textile Centres Infrastructure Development Scheme (TCUDS) TCIDS Scheme is a part of the drive to improve infrastructure facilities at potential Textile growth centres and therefore. the only scheme through which Government can assist the industry is the Technology Upgradation Fund Scheme (TUFS) which provides for reimbursing 5% interest on the loans/finance raised from designated financial institutions for bench marked projects of modernisation. Scheme for Integrated Textile Parks (SITP) To provide the industry with world-class infrastructure facilities for setting up their textile units. National Textile Corporation Ltd.The Agreement on Textiles and Clothing (ATC) The Agreement on Textiles and Clothing (ATC) promises abolition of all quota restrictions in international trade in textiles and clothing by the year 2005. (NTC) National Textile Corporation Ltd. SIDBI. The fund would not be available for individual production units. aims at removing bottlenecks in exports so as to achieve the target of US$ 50 billion by 2010 as envisaged in the National Textile Policy. Technology Upgradation Fund Scheme (TUFS) At present. Under the Scheme funds can be given to Central/ State Government Departments/ Public Sector Undertakings/ Other Central /State Government’s agencies/recognized industrial association or entrepreneur bodies for development of infrastructure directly benefiting the textile units. IDBI. This scheme is based on Public-Private Partnership (PPP) and envisages engaging of a professional agency for project execution. This provides tremendous scope for export expansion from developing countries. IFCI have been designed as nodal agencies for large and medium small scale industry and jute industry respectively. (NTC) is the single largest Textile Central Public Sector Enterprise under Ministry of Textiles managing 52 Textile Mills through its 9 Subsidiary . Government has launched the “Scheme for Integrated Textile Parks (SITP)” by merging the ‘Scheme for Apparel Parks for Exports (APE)’ and ‘Textile Centre Infrastructure Development Scheme (TCIDS)’. The Ministry of Textiles (MOT) would implement the Scheme through Special Purpose Vehicles (SPVs). 2000.

Under the TUF Scheme. Under this scheme. is a profit-making Public Sector Undertaking under the Ministry of Textiles engaged in commercial trading of cotton. 1999. the TUF Scheme has been continued during the Eleventh Plan (2007-2012). Allocation for TUF has been raised from Rs. Cotton Corporation of India Ltd. Under the Scheme for Integrated Textiles Parks (SITP). as Indian industry and the government see foreign companies more as partners in building domestic manufacturing capabilities rather than a threat to Indian businesses. has been a key focus area for the Government of India. the Government reimburses 5 per cent of the interest rates charged by the banks and financial institutions. the Central Government as well as various States has executed Schemes such as. launched on April 1. (CCI) The Cotton Corporation of India Ltd (CCI). 1500 Looms producing 450 lakh Kgs of Yarn and 185 lakh Mtrs of cloth annually.Companies spread all over India. • The Technology Upgradation Fund Scheme (TUFS): Recognising that technology is the key to being competitive in the global market. A number of policies have been put in place to make the industry more competitive.9. the Government of India established the Technology Upgradation Fund Scheme (TUFS) to enable firms to access low-interest loans for technology upgradation.11 billion in 2007-08. 26 parks have been approved . Following this through.638 crores having capacity of 11 lakhs Spindles.739 applicants. Mumbai. The CCI also undertakes Minimum Support Price Operation (MSP) on behalf of the Government of India. The headquarters of the Holding Company is at New Delhi. loans amounting to Rs. The strength of the group is around 22000 employees. The annual turnover of the Company in the year 2004-05 was approximately Rs. being one of the most significant sectors in the Indian economy.35 billion in 2006-07. to Rs. • Integrated Textile Parks Scheme: Manufacturing is a thrust area for the government. thereby ensuring credit availability for upgradation of the technology at global rates. Handlooms will now be covered under the TUF scheme. GOVERNMENT REGULATIONS AND SUPPORT Government Initiatives The textile industry.5. 149 billion have been disbursed to 6. In consonance with the industry. Schemes for Integrated Textile and Apparel Parks.

273 new yarn depots are opened up till now and the Handloom Mark was launched.89 billion in 2006-07 to Rs.00. The Government proposes to take up additional 100-150 clusters in 2007-08. Assist foreign companies in finding out joint venture partners. The Corporate Catalyst India A report on Indian Textiles Industry Government proposed to enhance the allocation for the sector from Rs. facilitates firms in the industry to improve their quality levels and also get recognised quality certifications. The other two certifications that have been targeted by the Textile Commission are ISO 14000 Environmental Management Standards and SA 8000 Code of Conduct Management Standards. The investors are only required to notify the Regional Office concerned of RBI within 30 days of receipt of in word remittance.25 billion in 2007-08. Ministry of Textiles has set up FDI Cell to attract FDI in the textile sector in the country.1. The Budget provision for these parks has been increased from Rs.000 weavers and will be extended to more weavers. FDI in sectors to the extent permitted under automatic route does not require any prior approval either by the Government of India or Reserve Bank of India (RBI). 136 are certified ISO 9001.so far out of 30 sanctioned.41 billion in 2006-07 to Rs. Maintenance and monitoring of data pertaining to domestic textile production and foreign investment.3.2. Foreign Direct Investment (FDI) Policy 100% FDI is allowed in the textile sector under the automatic route. under the Ministry of Textiles.4. Quality Improvement The Textile Commission. • Scheme for Handlooms: For Handlooms a cluster approach for the development of the handloom sector was introduced in 2005-06 and 120 clusters were selected. The scheme will also be enlarged to include ancillary workers. • Health Insurance Scheme: The Health Insurance Scheme has so far covered 3. Out of 250 textile companies that have been taken up by the Commission. The FDI cell will operate with the following objectives: ○ To provide assistance and advisory support (including liaison with other organisations and State Governments).21 billion next year. ○ ○ ○ Foreign Investment Scenario . To sort out operational problems.

Italian companies are investing in capacity expansion and striking manufacturing. as well as marketing operations. distribution and franchising deals with India Inc. companies have found alternative structures through which they can approach Indian consumers (examples include Levi Strauss. 65 unviable mills have been closed after implementing Voluntary Retirement Scheme . India can envisage its textile sector becoming $100 billion industry by 2010.7 million in textile projects in India. acrylic yarn. liberalization of contract norms for textile and garments units. Nike and Reebok in fashion products). replacement of existing indirect taxes with a single nationwide VAT. Italy. the existing entries in the drawback schedule relating to garments have been expanded to create separate entries of garments made up of (1) Cotton (2) Man-made fibre blend and (3) MMF Separate rates have been prescribed for these categories of garments on the basis of composition of textiles. Royal Sporting House. cotton yarn. viscose yarn. The number of FDI approved between 1991 and 2004 was 641 which amount to over US$ 1. After the phasing out of quota regime under the MFA. various blended yarn/fabrics. The proposed targets would be achieved provided reforms are initiated in textile sector and local manufacturers adopt measures to improve their competitiveness. fishing nets etc. Further. Marks & Spencer. Carrera is to invest US$ 252.02 billion. Adidas. There is certainly a broader opportunity to “grow the market from inside” as companies can freely set up fully-owned sourcing (liaison) offices. A 5pronged strategy aiming to attract FDI by making reforms in local market. The Union Minister said that the Board for Industrial and Financial Reconstruction (BIFR) had approved rehabilitation schemes for sick NTC mills at a cost of Rs 39 billion. This will include exports of $50 billion. The new products included wool tops. was suggested. UK) who are beginning to form joint ventures with Indian designers to cater to the domestic and export markets. elimination of restrictions that cause poor operational and organizational performance of manufacturers. Of the 66 mills. Other legislations regarding the Textile sector Ministry of finance has added 165 new textile products under duty drawback schedule. Although direct investment in retail remains closed to FDI as of now.A new trend in recent years has been the arrival in India of expatriate and western designers (from France.

the government has already constituted assets sale committees comprising representatives of Central and state governments. With the objective of protecting the interests of those affected by the WTO agreements and globalisation process. . Government of India jointly with NCDEX has adopted a policy of encouraging future contracts of silk. BIFR. NCDEX has launched its silk contract (raw silk and cocoon). The scheme would also provide infrastructure support by setting up centres of excellence for manufacture of technical textiles. Even the present status of jute industry was under the scanner of the consultative committee. Annual supplement introduces a number of measures to enhance the competitiveness of manufacturing sector. The Government had announced change from the value-based drawback rate hitherto followed to a weight-based structure for textile exports that will discourage raw material exports and also curtail the scope for misusing the drawback claims by boosting invoice value of exports. 1. including formation of a committee of experts to improve management of these mills. Government of India. Realizing that great potential and opportunities exist in the manufacturing sector. 2. operative agency. Proposed removal of export cess on export of all agricultural and plantation commodities levied under various Commodity Board Acts. According to him. had announced the Foreign Trade Policy on 8th April’05. the total number of products offered by NCDEX goes up to 27. Proposals for modernization of NTC mills have been made to the consultative committee members.(VRS) to all employees. The Government will run during the Eleventh Plan period a Scheme for the Development and Growth of Technical Textiles (SDGT) at an outlay of Rs 960 million to promote indigenous manufacture of technical textiles. Formulation of Inter-State trade Council to engage State Governments in providing an enabling environment for promotion of international trade. With this launch. The launch of the silk contract will offer the entire suite of fibres to the entire value chain ranging from farmers to textile mills. Highlights of the Foreign Trade Policy The Hon’ble Union Minister of Commerce & Industry. 3. NTC and the concerned NTC subsidiary to effect sale of assets through open tender system. Some of the Salient Features / Highlights of the proposals pertaining to Textile Industry in general and Handlooms in particular are.

Procedural simplification: • • Single common application form called Aayaat Niryaat Form introduced reducing the size of the form by more than 60%. capital goods can be transferred to other units by simply intimating Central Excise & Development Commissioner. • 1. EPCG Scheme will facilitate the modernization of retail sector by allowing concessional duty imports. • • Reduced export obligation and enhanced time available for exports under the EPCG Scheme for the imports made by the agriculture sector. Export of poultry and dairy products and their value added products facilitated by granting them duty credit @ 5% of the FOB value of the exports under the Vishesh Krishi Upaj Yojna. 3. The categories of advance licences merged into a single category . 3. 2. 3 lakhs. a simplified procedure is being worked out. For this the retailer should have a minimum covered shopping area of 1000 square meters. Gems & Jewellery exports – • • Entitlement of duty free imports of samples enhanced to Rs. balance export obligation will be waived for the exporters completing 75% of their export obligation in half the prescribed export obligation period. import of mono filament long line system for tuna fishing at concessional duty and establishes a self removal for clearance of waste of perishable commodities. Package has been developed for modernizing the marine sector Package allows duty free import of inputs based on the past export performance. • To promote accelerated export performance. EOUs can claim IT exemption within a period of 12 months from the date of exports. 2. The facility for export obligation discharge in rupee payment under the EPCG has been extended to the minor ports.995 and above purity allowed for release for export purposes.• No safeguard and antidumping duty to be levied on inputs under advance licence for deemed export supplies made to ICB (International Competitive Bidding) projects. Package for EOU sector: For units debonding from EOU’s. 1. Reducing congestion at the major ports. Supply of gold of 0. Similarly. Reduced obligation at six times the duty saved amount as against the normal eight times for imports made by the SSI sectors under the EPCG Scheme. ICDs and CFS also.

The matter is to be decided at economic advisory council headed by Prime Minister in the next 30 days Environmental Analysis and Concerns of Indian Textile Industry. the major determinants of competitiveness are both policy and politics in the international trade and commerce. Further.• • • • • Annual advance licence. Simplified clubbing norms under the advance licence and EPCG Scheme will help exporters in regularizing their cases. Chartered Engineer Certificate in lieu of Central Excise Certificate for nonexcisable units and those importing spares will be accepted as installation certificate. 1. infrastructure and managerial dynamics. • Imports made under Served from India Scheme can be transferable within the group companies and managed hotels. It is in this ‘buyer-driven global commodity chain’ that India has to position itself. policy. The provision will allow bulk sourcing and better utilization of the entitlement. the industry performance is influenced by domestic institutional. which was available only to status holders. • • • All Export Promotion Council shall open a separate Cell to involve and encourage youth and women entrepreneurs in export effort. . In textile industry. Export obligation extension for five years under advance licence based on BIFR rehabilitation package. This will enable handloom products to develop a niche market with the distinct identity. voluntary initiatives such as Worldwide Responsible Apparel Production (WRAP) and Apparel Industry Initiative (AIP) are attempting to instill social and environmental standards in textile and clothing sectors. Bank guarantee threshold reduced for units in Agri export zones and established service providers and a category of manufacturer exporters. This will reduce the transaction time. All actions by Income Tax authority on DEPB benefits have been stopped by Prime Minister with immediate effect. will now be available to all the exporters with some export performance. Minister of Commerce and Industry invited Suggestions on a proposal to change the names of Export Promotion Councils to ‘Trade Promotion Council. If we analyze the textile industry. Handlooms: • Government has decided to develop a trademark for Handloom on lines similar to ‘Woolmark’ and ‘Silkmark’.

680 cubic meters for finishing and processing. Usage of raw material and other natural resource inputs such as water etc have not only resource depleting impacts but release of effluents or emissions have natural resource degrading impacts. fumes. Manufacturing of all variants of textiles have an impact on the environment. The industry is known to use large quantities of water during its processing.4 gallons of water.840 cubic meters of water per day.6 gallons of water. etc. annually the textile industries alone utilize around 28. one bath towel needs 401. emit dust. through use of chemicals. It uses a total of approximately 3. India.8 billion liters of ground water. Some flame retardants that are used in certain textiles contain organic bromine compounds that are persistent (break down very slowly in the environment). clothes and other textiles products affect the environment to varying degrees throughout their life cycles. one Tshirt needs 256. use of energy. make them more hardwearing or wrinkle-resistant.500 cubic meters per day. solvents and huge quantities of water.Based on our experience of working with the textile industry. a man’s dress shirt requires 414. For example. another 960 cubic meters for steam generation. Studies have shown that some of the chemicals used in textile industry are carcinogenic and others may trigger allergic reactions.5 gallons of water. This apart. including 1. Like every product. Before textiles reach the consumer. and an equivalent volume for serving the workers colony and other domestic uses of water. . solid waste and effluent discharge. they go through many different physical and chemical processes. to the atmosphere are major environmental concerns of textile industry.3 gallons of water. An average integrated textile mill produces 15 tons of finished cloth per day. this article is an attempt to briefly outline the environmental concerns and identify ways to enhance internal and external competitiveness of textile sector. The water used for finishing and processing results in contaminated liquid effluent of approximately 1. In Tirupur of Tamilnadu. and 987 gallons of water are required for one pair of jeans. to grow the fiber for one cotton diaper requires 105. For example they may be treated with chemicals to dye. or less flammable. Textile industry is known to use restricted chemicals such as azo dyes and formaldehyde.

But.Further. Indian textile industry needs to realize that to remain competitive. This is important given the high textile production targets post 2005. Textile manufacturers use energy as a raw material input to the manufacturing process or for some other purpose usually referred to as non-fuel use. The textile industry in Tirupur was expected to achieve the targeted export of US$ 50 Billion by the year 2010. usage of synthetic dyes puts environmental limitation because production of these dyes requires strong acids. For e. and the ways in which the industry is responding to the environmental challenges. . because of high raw materials costs. A comprehensive analysis of the environmental impact of textile manufacturing activity is a critical need of the hour and it needs to be initiated at the earliest. operating costs have to be reduced and environmental compliance has to be enhanced. A complete survey of how developments in the textile industry and consumers of its products have affected the environment in the past needs to be taken up. Textile manufacturers have to deal with rising energy and other supply costs. such growth is now greatly hampered due to immense environmental damage due to the effluents released from the textile units to cause to the Noyyal river. solvents. and heavy metal catalysts. wind. To drive home the criticality of integrating environmental concerns Tirupur industrial cluster in Tamilnadu. Such an integrated approach has not been undertaken in India on environmental impacts of textile manufacturing. Understanding the value chain of textile industry will enable identifying and addressing all sources of environmental impacts in a life cycle process. Since production of these dyes need very toxic and hazardous chemicals. Electricity consumption is increasing in textile mills. water and other agents. high temperatures. India is being used as illustration. from chemicals used in bathroom cleaners to freezer bags and kitchen counter tops. Environmental issues can no longer be ignored by the textiles industry and the Government. and DuPont both raised prices on nearly everything they sell. alkalis. Dow Chemical Co. which includes an analysis of the degradation by air pollution. ground water system and agricultural fields mainly due to the textile wet processing industries in Tirupur.g. Textile sector cannot have independent growth strategies that are bereft of environmental concerns arising at various points of value chain because environmental costs are proving to be a drag on its own long term growth and development. This should also cover the most recent solutions adopted by the industry to alleviate the problems. Government should not only strive to integrate environmental goals into the national textile policy but also in the plans and programmes.

The textile manufacturing process is characterised by the high consumption of resources like water. and the types of fibres and chemicals used. fuel and a variety of chemicals in a long process sequence that generates a significant amount of waste. There is a long sequence of wet processing stages requiring inputs of water. is large variation in demand of type. The other feature of this industry. including liquid. The textile industry is a significant contributor to many national economies.Fortunately. use of environment friendly dies and promotion of energy efficiency in the textile sector. pattern and colour combination of fabric resulting into significant fluctuation in waste generation volume and load. gaseous and solid wastes. The nature of the waste generated depends on the type of textile facility. The common practices of low process efficiency result in substantial wastage of resources and a severe damage to the environment. the processes and technologies being operated. India has hand-loom sector. the textile industry is one of the largest industries in the world. In terms of its output or production and employment. notably Volatile Organic Compounds (VOC)’s and excessive noise or odour as . Other environmental issues of equal importance are air emission. unlike any other country in the world. Textile processing generates many waste streams. where production is relatively environmentally benign. for Indian textile sector. chemical and energy and generating wastes at each stage. General Environment Impacts of Textile Industries Textile processing industry is characterised not only by the large volume of water required for various unit operations but also by the variety of chemicals used for various processes. which is a backbone of fashion garment. Thus. encompassing both small and large-scale operations worldwide. the main drivers for environmentally benign growth can be: • • • • • • Growth of hand-loom sector Competition Pressure exerted down the supply chain by the consumer Reducing production costs Meeting current and anticipated legislative requirements Concern for the global and local environment Professionals at Green Stratos are currently part of several initiatives in the textile sector such as promoting organic cotton and creating market linkages for handloom sector. some of which may be hazardous. The main environmental problems associated with textile industry are typically those associated with water body pollution caused by the discharge of untreated effluents.

Air pollution: Most processes performed in textile mills produce atmospheric emissions. Air pollution is the most difficult type of pollution to sample. cardboard reels for storing fabric and cones used to hold yarns for dyeing and knitting. Most textile dyes have low aquatic toxicity. ionic metals and their metal complexes. off-specification yarn and fabric and packaging waste. dyeing and washing of finished products. surfactants and related compounds. These include scraps of fabric and yarn. Solid waste pollution: The primary residual wastes generated from the textile industry are non-hazardous. it shows that significant financial saving and environmental improvements can be made by relatively . The large volumes of wastewater generated also contain a wide variety of chemicals. emulsifiers and dispersants are used in almost each textile process and can be an important contributor to effluent aquatic toxicity. such as chemical storage drums. Cutting room waste generates a high volume of fabric scraps. air emission data for textile manufacturing operations are not readily available. Water pollution: The textile industry uses high volumes of water throughout its operations. approximately 200 litres of water are required to produce l kg of textiles. surfactants. On the other hand. The aquatic toxicity of textile industry wastewater varies considerably among production facilities. Of all the steps involved in textiles processing. generally. Speculation concerning the amounts and types of air pollutants emitted from textile operations has been widespread but. Cleaner production is an attractive approach to tackle environmental problems associated with industrial production and poor material efficiency. Gaseous emissions have been identified as the second greatest pollution problem (after effluent quality) for the textile industry. used throughout processing. test. wet processing creates the highest volume of wastewater. On average. such as detergents. and quantify in an audit.well as workspace safety. from the washing of fibres to bleaching. The sources of aquatic toxicity can include salt. Since the cleaner production approach has been successfully implemented in some areas in the textile sector. toxic organic chemicals. There are also wastes associated with the storage and production of yarns and textiles. BOD and foaming. which can often be reduced by increasing fabric utilisation efficiency in cutting and sewing. These can cause damage if not properly treated before being discharged into the environment. biocides and toxic anions.

low-cost and straightforward interventions. This improves the quality of products and minimises the cost of production, enabling the branch to compete in the global market. Moreover, Cleaner Production also improves the company’s public image by highlighting the steps it has taken to protect the environment. Low Yields in Cotton The relatively rapid gains in productivity in the predominately rainfed Central zone since 1990 are due to technological advances that, if combined with a continuation of recent modest growth in the North and South zones, could lead to a substantial hike in national average yields and production. While this productivity gap indicates that significant further on farm yield improvements are possible, a range of technical, economic, and institutional factors prevent realization of the potential of the varieties cultivated Following are the few factors which contributes towards the low yield • Delayed Sowing. Late sowing of cotton reduces yields by providing less optimal sunlight conditions for crop development and, in some areas, by allowing less time for picking the mature crop before clearing the field for the following crop. Sowing delays are caused either by the late arrival of seasonal rainfall needed for sowing or by delays in harvesting the preceding crop. Yield losses associated with late sowing and shortened harvest times may be reduced by new shorter duration varieties and better management, but crop competition will likely continue to limit yields in some areas. • Monsoon Dependence. Erratic monsoon rainfall affects 60-70 percent of cotton area, reducing yields through moisture stress and creating risk that reduces investment in seed, fertilizer, and pesticide inputs. Even with improved varieties and management, average yields in the mostly rainfed Central and South zones are likely to remain below those achieved in other countries with more reliable rainfall. • Poor Seed Quality. Poor seed quality is a pervasive problem in cotton cultivation. Only about 35 percent of cotton area is sown with certified seed with assured varietal purity and germination. Commercially available seeds are often of poor quality, with sale of uncertified, substandard, and second generation (F2) hybrid seeds not uncommon. Although supplies of certified seed are generally available, financial constraints lead most farmers to use retained seeds or lower priced uncertified seeds from the market. The proliferation of cotton varieties in markets and farmers’ fields confounds efforts to improve seed quality, maintain varietal purity, and improve crop management practices. Roughly 100-130 cotton varieties developed in both the public and private sectors are now cultivated in India. A study by the Central Institute for Cotton Research (CICR) indicates that

the average cotton farmer in the Central and South zones plants 3-4 varieties on farms averaging about 2 hectares, a practice that greatly complicates crop and seed management. • Plant Protection. Insect and disease infestations, including bollworms, white fly, jassids, and leaf curl virus, are significant problems in India’s three cotton production zones. Although per hectare use of pesticides is higher for cotton than for any other crop, effective plant protection is constrained by poor farm management, pesticide subsidies that encourage indiscriminate use, and problems with pesticide quality. Improved on farm pest management practices, including appropriate crop rotations, pest surveillance, pesticide applications, and adoption of Integrated Pest Management (IPM) practices have proved difficult to implement on small, resource constrained farms. • Crop Management. Large gaps between average on farm yields and the potential of existing varieties also stem from poor management practices, including use of inappropriate varieties, seed rates, seed spacing, and fertilizer dosages. As in the case of plant protection, improvement of crop management practices is complicated by the need to extend recommended practices to large numbers of small, limited-resource farmers. • Lack of Suitable Varieties. Cotton yields are affected by lack of varieties— or genotypes — suitable for some agronomic conditions. Indian scientists cite three priorities for plant breeding efforts: (1) higher yielding, short-duration, and pest-resistant cultivars for the irrigated North zone, (2) higher yielding varieties for the drought-prone Central zone, and (3) varieties suited for the soils on rice fallow common in the South zone. Water Management issues Water resources need to be protected from unsustainable use and pollution – between 1970 and 1995, 25% of the world’s freshwater ecosystems were lost. Agriculture takes up about 69% of global freshwater withdrawal and rice, wheat and cotton together account for 58% of the worldwide irrigated area, making these three crops the major consumers of freshwater (WWF, 1999). Approximately 73% of cotton is produced in irrigated fields and only 27% under rain-fed conditions. Most irrigation systems in cotton production rely on the technique of flood irrigation – freshwater is drawn from its source and transported to the place of its consumption. Losses of freshwater can occur through evaporation, seepage and poor water management. Water losses can be drastically cut through good water management practices which are integral to the farming approach taken in the Fair trade cotton standard including input of organic matter, crop rotation, and appropriate irrigation methods (if needed). In areas of water shortage, appropriate measures should be taken to improve water storage and collection systems. Bt cotton issue

Bt cotton is one of the variety of cotton which gives the lager yield and the less quantity of pesticides are needed because of its inbuilt pest resistance capacity. But the research was carried out and it was found that the cotton growers who are using the Bt cotton at their farm need to use more the amount of pesticides compared to the other normal cotton growers after third year of the Bt cotton and the yield of the cotton goes down compared to the normal cotton growers. So it has a major impact on the cotton growers and also the resistance of the insect increases with the frequent use of Bt cotton. Soil Pollution Soil in the cotton growing region and near-by region is getting polluted because of the excessive use of the chemical pesticides resulting into the low yield. This can be avoided by using the organic pesticides for growing the cotton. Pollution due to Lint The pollution due to lint in the cotton ginning industry is very hazardous to health. Most of the worker working at this place suffers from the lungs diseases because of the pollution problems. Manufacturing industries often cause a great deal of damage to the environment through the release of both toxic and nonhazardous wastes. As the damaging effects of chemicals become more apparent, our society is demanding cleaner and more efficient production methods. The U.S Environmental Protection Agency details environmental consequences, regulations, and proposed solutions in the Office of Compliance Sector Notebook Project: Profile of the Textile Industry. Pollution Outputs Wastewater is one of the largest sources of waste produced by the textile and apparel industries. Because the production of textile and apparel goods requires many different steps, wastewater is produced throughout the manufacturing process. High volumes of wastewater are produced in manufacturing operations such as resizing, dyeing, rinsing, printing, bleaching, finishing, and cleaning. In fact, each pound of goods produced can be the source of approximately 15 gallons of waste from dyeing and rinsing processes alone. Facilities that are involved in the dyeing of goods often turn out more than one million gallons of wastewater each day. The textile and apparel industries also release waste in the form of air emissions. However, the amount of polluted air produced is relatively small in comparison to other manufacturing industries. Small amounts of waste are emitted at various stages of production, each stage

releasing a different type of emission. Due to the high number of manufacturing stages, there are many different types of air pollutants generated by these industries. Because there are so many different components to the emissions of these industries, it is usually difficult to control and measure air pollution. Wastewater and air emissions generally receive the most attention from politicians and consumers due to their hazardous nature. Yet, there is another set of nontoxic, residual wastes that results from the production of textiles and apparels. A large amount of fabric waste and other scraps are left over at the end of production. For e.g. most production methods waste anywhere from 28 to 6 percent of fabric. Furthermore, packaging materials are not always able to be reused or recycled. Environmental Problems A number of different environmental problems have been caused by the textile and apparel industry. As previously stated, a large amount of wastewater and polluted air is generated during production. A number of other problems arise that are not simply related to the output waste produced. For example, a large amount of water, energy, and other valuable resources are consumed during the production process. Additionally, many facilities are not as environmentally sound as they could be due to outdated equipment that is difficult and extremely expensive to replace. Machinery is often very loud and disrupts surrounding communities. Many employees are unqualified for their jobs and lack the training necessary to understand the most efficient way of carrying out an assigned task. Moreover, they do not have the skills needed to improve or recognize harmful practices. The assistance of the government is crucial if this industry is to continually make strides in decreasing waste. However, most businesses are currently limited by the lack of support expended by the government. Prevention Methods and Proposals In order to make significant changes in the wastes generated by textile and apparel manufacturing facilities, several preventative measures must be taken. To begin with, companies should begin to set improved regulations for the raw goods used in manufacturing. Reusable containers should be required, and the use of harmful substances should be limited. Individuals should be employed by company and industry executives to research and develop new ways of producing goods using less harmful chemicals or wholly alternative treatments

Additionally. While the top priority for AMTEX is concerned with national competitiveness. The government needs to become more involved in assisting individual facilities and in the regulations set forth for the industry. A number of debates have arisen in recent years concerning cancer rates in communities located near various manufacturing facilities. The closely related Safe Water Drinking Act requires a certain level of quality in our drinking water. Regulations are set for determining what should be classified as a hazardous material. No other industry act is as important to our environment.altogether. For instance. Textile Industry Sponsored Initiatives Concerning the Environment The American Textile Partnership brings together researchers at leading universities with the United States Department of Energy. In order to achieve a new level of environmental responsibility. Simple improvements can be made by ensuring optimal settings of equipment and the optimal environment for the facility. Industry businesses are limited in the wastes they produce so that drinking water will not reach a contaminated level. better training programs for employees must be established. It also allows these emissions to be screened and companies must keep detailed records of their pollutants. The Emergency Planning and Community Right-To-Know Act addresses these issues by improving the knowledge of possible dangers to surrounding communities. Regulations Like any industry. among others. The Resource Conservation and Recovery Act of 1976 regulate the treatment of hazardous materials and waste. textiles and apparel must adhere to several standards so that our environment will be preserved. the Clean Water Act serves to keep American bodies of water safe and clean. organizations should take every step possible to reduce input amount by recycling as much as possible and by continually updating equipment. the Textile Resource Conservation (TRec) falls under the umbrella of AMTEX. The Clean Air Act encourages safe emissions and is an attempt by the government to improve air quality. Organizations should be encouraged to create "eco" friendly goods. Furthermore. where and for how long such materials can be stored. TRec's main goal is to encourage manufacturing processes that will do as little . some aspects of the group deal with environmental issues. The act has the ability to suggest emission standards that are apply to the entire textile industry. and treatment of the land where hazardous materials will be disposed.

07. India will be significantly behind China in all the segments. without creating any net waste. if the country aims to move up the value chain in textiles.44. projects worth Rs. companies must show a strong commitment to improving the environment. it is proposed to continue with the Technology Upgradation Fund Scheme (TUFS). steps should be taken to prevent excessive waste and pollution. Investments in the downstream segments of weaving and processing is necessary to ensure that the maximum quantity of yarn produced in the country is domestically converted into finished products. The growth of the TUFS has been significant during the last two years. Currently. registering a growth of 123 percent and 127 percent over the previous years. Specifically they aim to employ fewer input resources. Obviously.686 crore were sanctioned under TUFS. In order to maintain the pace of investment that has come in during the last 2 – 3 years. • Even with the capacities envisaged for the terminal year of the Eleventh Five Year Plan. • As on 31. which has proved to be highly successful in increasing investment in the textiles sector. Another initiative taking by many companies is called the Encouraging Environmental Excellence (E3) program. To be considered by inclusion in the E3 program. both for the export market and for domestic consumption. processing and garmenting. over 20 percent of the total production of cotton in the country is being exported as raw cotton. in order to meet the increasing requirements of the garment industry. Sufficient supply of yarn and fabrics internally will reduce the dependence of the garment industry on imported yarn and fabrics. The Working Group is of the view that even a slight modification in TUFS at this juncture may have an adverse psychological impact. it is essential to continue the Technology Upgradation Fund Scheme (TUFS) in its present form until the end of Eleventh Five Year Plan. Technological Environment Analysis • To continue the growing investment trend in the textiles sector and to achieve a growth of 16 percent in value terms. weaving. especially spinning. Involvement with the program is voluntary.harm to the environment as possible. disrupting the investment plans of the industry and also may result in distortion which will not be conducive for the long term growth of the industry. and recycling policies improved. increasing .2006. there is significant scope to convert the raw cotton currently being exported into yarn. Goals must be set. Export of cotton yarn has been simultaneously declining. In short.

Pakistan. Interest rates are increasing in the country and the PLR may continue to increase during the Eleventh Plan period. China has proposed substantial expansion during the next five years from its present capacities.315 crore.a.00 percent p. incremental production facilities would have to be set up. the current PLR in India is around 11. 2.a.50 percent p. This investment will not come without support from Government in the form of the extension of TUFS. This will be possible only if the TUFS continues in its present form. but considering the contribution of the industry in terms of exports and employment it is negligible. It is estimated that the requirement of funds for setting up these incremental facilities will be approximately Rs.11. • The financial outlay during the Eleventh Plan for TUFS may appear to be high at Rs. • The interest rates currently applicable to the textiles and clothing industries of major competing countries are substantially lower than the present Primary Lending Rate (PLR) in India. policy support to the textiles and clothing industry and targets for growth in the sector have been announced by the Government. Social Issues .a.a. Interest rates applicable to term loans in some of the competing countries are given below: (i) South Korea (ii) Malaysia (iii)Taiwan (iv)Thailand 4.50. which already are about 5 times that of India. In order to remain competitive in the international market and to withstand increasing competition in the domestic market. 5. it is necessary to ensure the large investment in modernization and expansion as envisaged in this report.50 percent p. 3. • The Working Group has aimed at 12 percent growth in production and 22 percent in exports.00 percent p.600 crore during the Eleventh Plan period.1.investment is a must. To achieve this growth.a. • In China. Spain and several other competing countries.50 percent p. As against this. TUFS has emerged as a successful instrument in leveraging investment in the private sector.

However. American companies are constantly looking for ways to reduce production costs. Information on labels is far more likely to be looked at than information on company websites because the contents are available immediately when looking at a product label. Furthermore. Sweatshops infringe upon some of the most basic rights of individuals concerning working conditions such as wages.shoppers want to know other details about the production process such labor practices. The increased minimum wage level and increased import costs make it increasingly difficult for Americans to compete with overseas firms. safety. they are more easily manipulated. and it is a tradition in many nations. Labelling often includes country of production. Child Labor Child labor is one of the leading social concerns for the apparel industry. There are several reasons why employing children is a common practice in many nations. Child labor specifically refers to jobs that prevent children from attaining education or jobs that could be detrimental to the child. it is important to disclose more information that this on the label . Branding . it is often difficult to monitor the practices of overseas companies. Many foreign countries do not have restrictions on child labor laws. and testing procedures. Labels Labels are the key source of information available to consumers about various textile and apparel products. Unfortunately. sweatshops often employ children. school is not always an option. Children do not need to be paid as much as adults.Linda Golodner's "Apparel Industry Code of Conduct: A Consumer Perspective on Social Responsibility" addresses a number of social concerns evident in the apparel industry. environmental consequences. Sweatshops The apparel industry is one industry particularly affected by sweatshops. Our government does not have the ability to analyze the labor practices of all foreign plants and cannot force them to adhere to American standards. Golodner’s is president of the National Consumers League. and overtime. Many apparel goods are either produced by foreign companies or by American companies whose manufacturing facilities are abroad.

the customer can purchase an almost identical shirt somewhere else. For example consider the Polo Ralph Lauren brand. As we all know. Although. This is because consumer tastes are changing fast due to the influence of cultural. Branding . Others. Let’s see the scenario of apparel branding in domestic market. and building the image of the brand. psychological and global trends and hence they are less loyal. To compete in domestic as well as global market place in the long run. there are very few apparel exporters who had attempted to create brands in the global market. Brands are cultures Many people think that branding is nothing but just creating a brand name. In reality. the apparel exporters do have the capability to produce as per the requirement of global market. the marketers must create and manage strong brands. This situation necessitates the marketers to strengthen their brands for their stay in the market. To put salt on the wound. but as a strategic thinking. without the labelling on it. It is the status and the reputation that the brand carries which really promotes the brand value and encourages people to purchase the brand against the plethora of competing brands.Building Indian brands in global apparel market is necessary. their main lacuna is strategic thinking in creating their own brands. there are customers who would like to wear (Polo) horse on their shirt so that people around them know that they can afford to buy a Polo Ralph Lauren shirt. There is cut throat competition in the market. advertising it. It has the stylish component. for quite a bit less. many global brands are also entering the Indian market. still supply to international buying houses or retail chains as per the specifications and designs provided by the buyers and most importantly the exporters put the label or brand name as stipulated by the buyer wherein the exporters voluntarily hide their identity in the global market. because the marketers can increase the value of their products by branding. branding is not a selected set of activities but it is a strategic point of view. According to Prof Douglas B Holt of Harvard Business School. The brand value will become a vital factor in creating loyal customers which would pose a formidable defence in the competitive market. This might be possible only when the marketers consider branding not as a set of activities. but it has also something a little extra. many brands enter the market and with a short run success they become obsolete. making Indian brands clueless as to how to survive the competition.

experiential and symbolism. That’s why Raymond still remains above competition with a leading value and volume share in the organised ready-to-stitch (RTS) market. . Society attributes meaning to the products which would eventually become facts about the product over the years. if the consumers don’t know about the quality of the fabric that they intend to purchase. they would perceive the purchase decision as risky. They often are not interested to investigate the evidences for the claims the brands make. Reputation value Consumers often feel the risk of unknown and also they have the tendency to reduce it by some way or other. The value of the brand is nothing but the difference between what a consumer will pay for a branded product and a physically identical product without brand culture. These facts make up the culture of the product. Raymond constantly promotes ’Complete man’ benefit for their suiting which is the key benefit for which consumers go for Raymond. The stories about product experiences which they hear from various sources also act as a base for building the reputation of the brand.requires managers to put conscious efforts to build the society’s perceived value of the product. In consumer markets. advertisements. newspaper articles evaluating the brand and conversations with friends and colleagues that mention the brand establish the brand culture. brand value has components such as reputation. In such situations. Customer experiences. These features become material markers of the brand. sponsoring activities to the events. For example. A brand need not just be a name or a logo. it can also be unique design features. They tend to attribute certain benefits for which they buy the particular brand. Becoming regular with a particular brand help the customers in reducing the search costs and need for straining the brain in analysis and decision making. reputation of the brand in terms of quality offers confidence to the consumers to go ahead with the purchase. Brand value Brand culture facilitates the customer to form perceptions about the value of the brand. They often jump into conclusion very fast and become regular in buying and using particular brands based on faith. Experiential value Consumers don’t value the product on all parameters.

A brand is not an advertisement. and customer satisfaction is the key to a long-term success. out of which only Rs 4. without a clear vision or specific mission. A brand product offers a sense of safety.IMPORTANCE OF BRAND The constantly changing market poses new challenges to clothing enterprises. some time later this is translated into the reconcilability and prestige of a brand on the market. As consumers must have a reason for selecting this given brand from among many others. and international competition SWOT ANALYSIS IN BRAND BUILDING Opportunities Indian apparels accounted for a tiny fraction of less than 3 per cent of overall world export of apparel.000 crore market.000 crore is catered to by branded apparel. logo. will sink in the mass of messages hitting the market. retention of the market position. All the elements comprising a brand image have to be closely related to the idea and goals of the company. which are the destinations for Indian textile products. There is a very large domestic market for Indian apparel manufactures. and the clients’ demands are also continually rising. or without permanent values. It is necessary to define why it is different and what its position is. A brand image is defined through its selected symbolic patterns. The most important among these are the brand’s name. each brand should have a motto apart from its distinctive usability. and so it is necessary every now and again to offer them a higher added value. The developed nations. Firms without any distinct features. the so-called branding. what its product is and who the clients are. and guarantees quality and reliability. This added value is a properly planned brand strategy. the market size is of Rs 20. It is certainly an indispensable tool allowing effective conquest of markets. and as a result a strong and distinct image is created in the customers’ mind. and composition of graphic elements and colours all associated with the company. So there is still an Rs 16.000 crore. It is crucial for a brand built on these elements to give a clear message to the customer about the kind of company he is dealing with. which is catered by the unorganised small size units. use textiles in the . As per McKinsey study. suggesting an opportunity for considerable growth. Brand values are features that appeal to the emotional sphere of human perception Hence a brand is the most valuable asset of a company. This certainly helps its positive identification. It is important that the customer’s mind should absorb and retain as much information about a brand as possible. but rather a whole philosophy underlying a set of combined actions fixed on the company’s success.

they • Determining the identity and building desirable brand image Choosing the best project Introducing brand to the market by means of marketing activity Law protection of brand Determine the needs of the customers Controlling introduced brand on the market Testing the product bring in new designs. low manufacturing cost. manufacturing units of larger capacity with upgraded technology. Threats Various regulatory. in order to improve the presence in these markets and capture larger values of the chain the focus needs to be shifted towards the effective performance of the textile apparel supply chain network. Therefore. • • • • • • . From middle of 1990s. Strengths The Indian textile industry is globally more competitive than other industries in the country on relative terms. in spite of enjoying the benefits of abundant cheap labour. Most of the inputs required for this sector being available from domestic sources and there are very little requirements of imports and precious foreign exchange. This had raised the expectation level of discerning consumers and apparel industry faced the challenge to improve its performance from this set of demanding consumers. available raw materials and a large domestic market. Indian consumers could see availability of international brands in domestic market. For a product line characterised by unpredictable demand pattern and seasonality on one end and highly labour intensive on other. Importers of Indian apparels were generally satisfied with price and enthusiastic about the ability to source small production quantities. technological and marketing changes were expected to affect India’s textile industry over the next few years. rather than looking at textile industry in isolation. mostly in collaboration with a joint venture partner were established. There are few factors such as infrastructure and government policies that have caused wide gap in the economic development between India and other nations for textile industry in particular. which were made by Indian garment manufacturers. it is necessary to have flexibility to balance the labour force employment from time to time. modern scientific management and also the marketing strategies. During the same period. new craftsmanship.form of apparel. With the entry of international garment companies into India.

The present labour policy in a way discourages Indian apparel units to set up large size manufacturing set up and achieve economies of scale. products are delayed by three months. but also the delivery times. buyers normally ask for discounts. faced by the buyers of finished textile products and apparels.These all can strengthen the competition mechanism so that the industry will gain more resources for developing new products. Shelf life of fashion driven products is very short (approximately 45days). and difficulties associated with freight handling. The average cycle time in the Indian textile industry is about 45-50 days. At times.Progress (WIP). Presence across the value chain. The mean delay in the supply chain from procurement of raw materials and to export of finished goods is 15. A large size unit. Weaknesses The small manufacturing units lacked sophisticated planning and information system and failed to offer scale economy. by Indian standard. in order to establish lean supply chains is extremely crucial for manufacturers. The long and uncertain lead times seem to be the most serious problem. which sometimes extends to 80 days.5 days. sharing of airfreight burden or full payment of the airfreight. Well integrated and lean supply chains: Shorter cycle and delivery times The Indian textile industry has a long and complex supply chain. Therefore strong deployment of industrial engineering with particular emphasis on cellular manufacturing and JIT systems. new brand names. the absence of large capacity garment manufacturers.70 in 2000. but also Work-in. variability of supply chain and hence the cost. In such situation. This clearly reflects the Indian exporters’ inability to move up the value chain and the threats of being branded as supplier of low end products in the international apparel market. Indonesia. These delays not only affect time-to-market. missing a season totally. and Sri Lanka. resulting in greater control over the supply chain and cost reduction. This leads to the question of whether it makes sense to promote the brand image that exists at present or improve all on the weaknesses substantially before we think of further promotion. hence such delays are untenable. technology development and staff training in order to increase the market competitiveness. Thailand. Buyers were frustrated by delivery and production lead times. could well be the smallest in size in the competing countries like China. This affects not only the cycle times. which has dropped from $ 4. and in worst case cancel the order. Bangladesh. . vertical integration and investment in captive power units helps in effective demand assessment.44 in 1994 to $ 3. One major area of concern for the Indian apparel exporters is the declining average unit value realization.

The capacity of Indian industry. The SPV will be a Corporate body with the majority stake being held by user apparel industry enterprises through associations / councils. and quality standards. in today’s consumer oriented market. fragmented and decentralized. • It is estimated that the final retail value of an apparel product sold to consumers in export markets is 5-10 times higher than its ex-factory price. Textile Industry comprises small-scale. • Brand development. play an important role in terms of market penetration and higher unit value realization. are entirely dominated by various global brands. spinning. and Indian exporters are merely suppliers to such brands. on a sustainable basis. environmental. by virtue of being SME oriented. durability. medium-scale. would develop detailed guidelines and strategy for brand promotion. a Public-Private Partnership (PPP) approach is the appropriate strategy to develop globally acceptable Indian apparel brands. DISTRIBUTION The Indian Textile industry is highly fragmented sector. in consultation with the Government. The role of the SPV will include need assessment. but also requires very carefully designed multi-stakeholder strategy. to design and launch brand promotion efforts on its own is limited. weaving. brand promotion is not only an expensive proposition.Brand promotion • Brands. Therefore. and other hand-holding support. therefore. mobilization of resources. As a result. The SPV. thereby leading to increased export earnings. The markets of USA and Europe. non-integrated. will deepen the market share and acceptability of Indian apparel. finishing. which account for more than 90 percent of Indian Apparel Exports. the country is losing a significant amount of export earnings. • • Industry is fully vertically integrated across the whole value chain and interconnected with various operations. Brands assure consumers that products are of a certain quality. and conform to several social. • The Indian apparel industry will be encouraged to create a Special Purpose Vehicle (SPV) for the purpose of brand creation and promotion. However. . and apparel-making firms and enterprises. assistance to enterprises to design and launch the brands in selected markets. to forge linkages with key stake holders. large-scale.

Knitting. Jute.• • • This is an unorganized sector and includes Handlooms. weaving. • The Man-Made Textile Sector includes Fibre and Filament Yarn manufacturing units of Cellulosic and Non-Cellulosic origin. ginning facilities. and Composite Mills where spinning. spinning and extrusion processes. Viscose. Hosiery. Synthetic / Man-Made fibers such as Polyester. the 3rd largest producer of Cotton and Cellulosic Fibre/Yarn and 5th largest producer of Synthetic Fibers/Yarn. and the Non-Cellulosic Industry is controlled by the Ministry of Chemicals and Fertilizers. Khadi. Natural Fibers such as Cotton. Readymade Garments. Carpet and Handicrafts manufacturing units. Acrylic and Polypropylene. The Cellulosic Fibre/yarn Industry is controlled by the Ministry of Textiles. The organized Mill Sector comprises of spinning Mills. Powerloom. The Fibre and Yarn Sector of the textile industry includes Textile Fibers. Silk and Wool. and processing activities are done. • India is the largest producer of Jute. weaving and knitting factories and garment (and other stitched and non-stitched) manufacturing that supply an extensive . The Textile and Apparel Supply Chain The Textile and Apparel Supply Chain comprises diverse raw material sectors. processing sector. Nylon. the 2nd largest producer of Silk.

This supply chain supplies about 70 per cent by value of its production to the domestic market. Tirupur/Coimbatore. It is estimated that there exist 65. cotton and silk sarees in Pochampally or Varanasi) and in small batches. raw material and often the loom. salwar kurta. wool and silk and 13 per cent was blended cloth. Mumbai. Handloom production in 2003-04 was around 5493 mn.sq. They also represent very distinctive supply chains. the total value of production in the garment sector is around Rs. of the total production from the weaving sector. chiefly. About 40 per cent of fabric for garment production is imported – a figure that is expected to rise in coming years. This supply chain is perhaps one of the most diverse in terms of the raw materials used. Bangalore. The distribution channel comprises wholesalers. dhoti.5 mn people.200–250 bn. The handloom sector (including khadi. Another feature of the distribution channel is the strong presence of ‘agents’ who secure and consolidate orders for producers. 41 per cent was 100% non-cotton including khadi.. It is only recently that large retail formats are emerging thereby increasing variety as well as volume on display at a single location. Handloom production is mostly rural (employing about 10 million. of which about 88 per cent are for woven cloth while the remaining are for knits. However. technologies deployed and products produced. and Ludhiana employing about 3. there are clusters emerging in the National Capital Region (NCR). textiles with geographical characterization (e.g. . only 30–40 units are large in size (as a result of long years of reservation of non-exporting garment units for the small scale sectors – a regulation that was removed recently).g.meters of which about 82 per cent was using cotton fibre. Three distinctive technologies are used in the sector – handlooms.distribution channel. In 2004-05. The value of Indian garments (e. etc. According to our estimate.) is around Rs.000 garment units in the organized sector.1050–1100 bn of which about 81 per cent comes from the domestic market. saree. While these firms are spread all over the country. The weaving and knits sector lies at the heart of the industry. silk and some wool) serves the low and the high ends of the value chain – both mass consumption products for use in rural India as well as niche products for urban & exports markets. about 46 per cent was cotton cloth. It produces. Exports are traditionally executed through Export Houses or procurement/commissioning offices of large global apparel retailers. household weavers) and revolves around master-weavers who provide designs. distributors and a large number of small retailers selling garments and textiles. mostly. powerlooms and knitting machines.

high volume.383 workers.000 m of cloth daily. Over the years. there were 425.437 mn respectively. 950 mn kg of blended yarn and about 1106 mn kg of man-made filament yarn every year. unit prices and production quantity. chiefly located in North India. The remaining are independent process houses (or part of composite mills) that use automated large batch or continuous processing and have an average scale of about 20. has on an average 4. The processing sector. Spinning sector is technology intensive and productivity is affected by the quality of cotton and the cleaning process used during ginning. The spinning sector is perhaps most competitive globally in terms of variety.. government incentives and demand for low cost. Most of these mills are located in Gujarat and Maharashtra. Bhiwandi. rotors producing 2270 mn kg of cotton yarn. NCR. dyeing.947 mn.397 units are hand processors who dye cloth or yarn manually and dry in open sunshine. The largest amongst these would dye and finish about 5000 m/day. While some like Arvind Mills or Ashima transformed themselves into competitive units. In 2003-04.24 mn. Mills. standard products (especially sarees and grey cloth) moved the production towards powerloom factories and away from composite mills (that were essentially full line variety producers). Chennai).Weaving. sq. others gradually closed down. Of the remaining (and these use automated and semi-automated equipment). deploy 34. About 82. has largely a domestic focus and is growing rapidly.604 mn and 0. Strong production clusters like Tirupur and Ludhiana have led to growth of accessories sector as well. Spinning is done by 1566 mills and 1170 Small and Medium Enterprises (SME).29 mn spindles and 0. there remained 223 composite mills that produced 1434 mn. mts of cloth and employed about 4. Though cotton is the fibre of preference. In 2005. man-made fibre (polyster fibre and polyster filament yarn) is also produced by about 100 large and medium size producers.5 power looms per unit.757.792 registered powerloom units that produced 26.e. of cloth.5 per cent or 10. finishing and printing is mostly small in scale. . Worsted and non-worsted spindles (producing woolen yarn) have also progressively grown to 0.385 mn rotors while the SME units produce their yarn on 3. sq. i. using powerlooms was traditionally done by composite mills that combined it with spinning and processing operations. albeit slowly. Most of the woven cloth comes from the powerlooms (chiefly at Surat. mts. Knits have been more successful especially in export channels. and incurs high co-ordination costs. on the other hand. spindles and 0. Weaving sector is predominantly small scale. 2076 are independent process houses. The hosiery sector. suffers from outdated technology.119 mn.

785 mn acres. 3009 mn kg of cotton was grown over 7. Cotton grows mostly in western and central India. silk and wool fibres are also imported by the spinning and knitting sectors.. fragmented. wool (50. handloom and knits) and higher power tariffs. all data in this section was obtained from OTC 2004 and Texmin 2005. India contributes about 23 per cent of world spindles and 6 per cent of world rotors (second highest in the world after China). stand-alone mid-size weaving companies focusing on export markets. the unorganized nature of the sector (i. silk in southern India.7 mn kg) and man-made fibres (1100. un-registered units. however. open-ended (OE) yarn as well as textured yarn.Cotton remains the most significant raw material for the Indian textile industry. Competitiveness of Indian Textile & Apparel Industry India is one of the few countries that own the complete supply chain in close proximity from diverse fibres to a large market. diverse count sizes. Its share in global shuttleless loom. jute in eastern and wool in northern India. This advantage is further accentuated by cost based advantages and diverse traditions in textiles. Taiwan etc.8 per cent of world looms (and is ranked 9th in the world). (Except for garments.) . Other fibres produced are silk (15742 tonnes). processing. Significant qualities of cotton. Indian firms are ahead of their global competitors including China. (Texmin. It is capable of delivering packaged products to customers comprising a variety of fibres. is only about 2.e. 2005.e. In 2003-04. While production and export of man-made fibre (and filament yarn) has increased over the years.) Managing such a complex supply chain requires coordination through excellent managerial practices. cloths of different weight and weave. a recent trend of investment in setting up hi-tech. often. Europe.69 % of Indian looms)..65 mn kg). and panoply of finishes. technology and facilitating policies. small and. China. low investment in technology & practices especially in the powerloom. Same is true on some woven OE yarn fabric categories (especially grey fabrics) but is not true for other woven segments. Indian industry still lags significantly behind US. Indian strength in spinning is now well established – on unit costs on ring yarn. Fifty five per cent of total investment in technology in the last decade has been made in the spinning sector. This permits the supply chain to mix and match variety in different segments to deliver new products and applications. however. The competitiveness in the weaving sector is adversely affected by low penetration of shuttleless looms (i. 1. India also has the highest deployment of handlooms in the world (handlooms are low on productivity but produce specialized fabric). There is. jute (10985000 bales).

the coefficient of variability of average order size for spinning firms is about 2. average % of orders on time is about 80%.g. and on an average. Trade data of post-MFA performance reveals some interesting trends – Indian firms registered a 27 per cent growth in exports to US (against China’s 52 per cent) during the JanApril 2005 time period. Add to this. Challenges facing Indian Textile and Apparel Industry Textile supply chains compete on low cost. Several challenges stand in the way of Indian firms before they can own a larger share of the global market: Scale: Except for spinning. high quality. Apparels & accessories constituted 78% of global exports to USA (FICCI 2005). Some of the Chinese large firms have 1. 16 days of sales as work-in-process inventory (the highest for garment firms) and an average of 30 days of sales in raw material inventory (the highest for spinning firms) (Chandra 2004). 1. reservation in the garment sectors) including tariff distortions between the organized and unorganized sectors have now been systematically removed by policy initiatives of Government of India and have opened avenues for firms to compete on the basis of their capabilities.25 times denim (and 2 times gray fabric) capacity and about 6 times more revenue in garment than their counterparts in India thereby affecting the cost structure as well as ability to attract . hank yarn requirement.6). Lead times across the sector continue to be affected by variability in the supply chain – defect rates average over 5%.. accurate delivery and flexibility in variety and volume. all other sectors suffer from the problem of scale. Similarly. Indian firms are typically smaller than their Chinese or Thai counterparts and there are fewer large firms in India. variance in order size across firms is high (e. etc. Some of the hurdles (e.. processing technology is primarily manual and small batch oriented with visual color matching and sun drying.5 times higher spinning capacity. contamination of cotton with consequent increase in cost (as it affects quality and requires installation of additional process to clean and open cotton fibres before carding operations).g. This leads to inconsistency in conformance quality. high average defect rates in production process (which also leads to increase in effective labor and power costs). poor ginning (most equipment dates back to 1940s). Most of this growth has been in textiles while apparels show marginal gains. and its competitiveness gets compromised severely.Indian textile industry has suffered in the past from low productivity at both ends of the supply chain – low farm yields affecting cotton production and inefficiency in garment sector due to restriction of size and reservation.) It is expected that India will soon replace Mexico as the second largest apparel supplier to the US. (India is still a relatively small yet growing player in the global apparel market.

The real bottleneck to growth is going to be availability of skilled manpower. high throughput times. Innovation & Technology: A review of the products imported from China to USA during January–April 2005 reveals that the top three products in terms of percentage increase in imports were Tire Cords & Tire Fabrics (843.8mn operators in the apparel sector (assuming a 80:20 ratio of investment between textiles and apparel). low WIP and consequently cost.2% .1% increase) and Textile/Fabric Finishing Mill Products (197. JIT and statistical process control to reduce lead times on shop floors. about 70. Indian firms have to dramatically reduce cycle times across the entire supply chain which is currently quite high (Chandra. though). Nonwoven fabrics (284. 2004). The central tendency is to add capacity once the order has been won rather than ahead of the demand. book capacities.000 supervisors and 2.customers with large orders. and low variability in process times. manage warehouses and logistics of order delivery. For the size of the Indian economy. Large capacity typically goes with standardized products.05mn operators in the textile sector and at least 112. Skills : Three issues must be mentioned here : (a) there is a paucity of technical manpower – there exist barely 30 programmes at graduate engineering (including diploma) levels graduating about 1000 students – this is insufficient for bringing about technological change in the sector. by our calculations. These firms need to develop the managerial capabilities required to manage large work force and design an appropriate supply chain.4% increase over the previous year). Then there is the need for emergence of specialist firms that will consolidate orders. Cycle time reduction is strongly correlated with high first pass yield. It is expected that Indian firms will have to invest close to Rs. Cycle Time: Cycle time is the key to competitiveness of a firm as it affects both price and delivery schedule. This kind of investment would require. Penetration of IT for improving productivity is particularly low in this sector. Customs must provide a turnaround time of ½ day for an order before Indian firms can they expect to become part of larger global supply chains. it will have to have bigger firms producing standard products in large volumes as well as small and mid size firms producing large variety in small to mid size batches (the tension between the organized and un-organized sectors will have to be addressed first.000 supervisors and 1. (b) Indian firms invest very little in training its existing workforce and the skills are limited to existing processes (Chandra 1998). Indian firms need a strong deployment of industrial engineering with particular emphasis on cellular manufacturing. 1400 bn by year 2010 to increase its global trade to $ 50 bn. (c) there is an acute shortage of trained operators and supervisors in India. Customers go where they see both capacity and capabilities.

However.increase) (FICCI. there is little evidence that this deployment in technology has accompanied changes in the managerial regimes – a necessary condition for increasing productivity and order winning ability. at other times. The Free Trade Agreement with Singapore and Thailand will allow overseas producers to meet the aspirations of domestic buyers with quality and prices that are competitive in the domestic market. ‘dollar pricing’). Domestic Market: The Indian domestic market for all textile and apparel products is estimated at $26 bn and growing. power availability and its quality. by international trade regulations. 2005). is not well entrenched. The Technology Upgradation Fund of the government is being used to stimulate investment in new processes. however. few areas of policy weakness stand out – labor reforms (which is hindering movement towards higher scale of operations by Indian firms). Firms are not taking advantage of the large domestic market in generating economies of scale to deliver cost advantage in export markets. figure in the list of imports from India that have gained in these early days of post-MFA. in the long run. credit for large scale investments that are needed for upgradation of technology.e. Ignoring the domestic market. In conclusion. Entry into newer application domains of industrial textiles. . These are problems facing several sectors of industry in India and not by this sector alone. Firms need to make their supply chain leaner in order to overcome these disadvantages. Indian synthetic industry. Institutional Support: Textile policy has come long ways in reducing impediments for the industry – sometimes driven by global competition and. Policy will need to facilitate this building of capabilities at the firm level and the flexible strategies that firms will need to devise periodically. Nano-textiles. Synthetic textiles comprise about 50 per cent of the global textile market. and development of manpower for the industry. While the market is very competitive at the low end of the value chain. competitive strategies are developed by sector level firms and its their individual and collective initiatives that secure higher market share in global trade. becomes imperative if we are to grow beyond 5–6% of global market share as these are areas that are projected to grow significantly. However. high retail property prices and high channel margins in India will restrict growth of this market. While one has to be ever vigilant of non-tariff barriers in the post MFA world. None of these items. home furnishings etc. customs clearance and shipment operations from ports. however. the mid or higher ranges are overpriced (i. the new market will be won on the basis of capabilities across the supply chain.. will peril the export markets for domestic producers. In addition.

there is lack of Industry Leadership. Quality and Delivery for the different segments. Industry is unable to generate economies of scale. There is uneven supply chain model and inbound freight traffic is low which affects cost of shipping. which restrict to tap potential market. High Indirect Taxes. Though Industry has cheap and skilled manpower but they are less productive. The industry which was growing at 3 – 4 percent during the last six decades has now accelerated to an annual growth rate of 9 – 10 percent. cost and distribution. the . Inappropriate energy supplies to rural and sub-urban areas. Because of this. Because of this there is Global Logistic Disadvantage as shipping cost is higher. There is lack of technological up-gradation in various steps of value chain that affect the quality. There is a sense of optimism in the industry and textiles sector has now become a ‘sunrise’ sector. Power and Interest Rates. Inadequate Research & Development. There is less FDI in this industry that is hurdle to make industry more competitive on global basis. There are high Costs like. This leads to inability to establish a world-class competitive player. These small companies do not have fiscal resources to invest in technological up-gradation and they are not able to generate economies of scale. as a result. • • • • • THE CHALLENGES AND STRATEGY FOR GROWTH OF THE INDIAN TEXTILE INDUSTRY • The Indian textile industry is in a stronger position now than it was in the last six decades. a substantial increase in cotton production. • • • • • • • • Despite many policies Industry is bound with historical regulations that are reason for Complex Industry Structure. Industry has unfavourable labor Laws. Industry needs to compete on the basis of Price. • The catalysts which have placed the industry on this trajectory of exponential growth are a buoyant domestic economy. it is tough to balance the demand and supply equation.Textile Industry Concerns • Indian Textile Industry is highly fragmented Industry that is lead by several smallscale industries. India has disadvantage in terms of Geographic Locations. India lacks in various trade memberships.

The Technology Upgradation Fund Scheme (TUFS) has facilitated the installation of the state-of-the-art / near state-of-the-art machinery at competitive capital cost. apparel exports have increased by 30.2005.01.conducive policy environment provided by the Government. but is predominantly cotton based. The rationalization of fiscal duties has provided a level playing field to all segments. during the corresponding period. The disposable income of Indian consumers has increased steadily. This has unshackled Indian exports. The Technology Mission on Cotton has increased cotton production and reduced contamination levels. manifesting itself in the greater consumption of textiles. while textiles exports have increased by 16 percent. has resulted in higher disposable income levels. In 2006 also the export growth in these two markets is continuing with the same trend.2 percent. providing it with a competitive edge in the global market. • The Indian textile industry consumes a diverse range of fibres and yarn. Apparel exports to USA during 2005 have increased by 34. Similarly. and the expiration of the Multi Fibre Agreement (MFA) on 31st December’2004. in Europe. and this is evident from the growth registered in the quota markets.3 percent over the next 8 years. This translates into a growth of 9.6 percent and textiles exports by 2. India is considered as the second most preferred destination for major global retailers due to its strength of vertical and horizontal integration. .2 percent. • The buoyant Indian economy. This increasing trend in exports is expected to continue as major global players are not inclined to source exclusively from China. and will result in higher spending capacity. • The Government has also provided industry a conducive policy environment and initiated schemes which have facilitated the growth of the industry. A significant increase in cotton production during the last two – three years has increased the availability of raw cotton to the domestic textiles industry at competitive prices. growing at the rate of 8 percent. The proportion of the major consuming class (population that has an annual income of more than US$ 2000) has risen from 20 percent in 1995-96 to 28 percent in 2001-02. • Quotas which have restrained the export growth of the Indian textile industry for over four decades were eliminated with effect from 01. This is expected to move up to 35 percent by 2005-06. resulting in the holistic growth of the industry. and to 48 percent by 2009-10.

• It is estimated that the output of trainees from the entire existing training infrastructure is not even adequate to meet existing requirements. For example. the indigenous textiles machinery industry has projected a capacity of 3.25 million for replacement).000 by the organized sector + 88. the indigenous textiles machinery industry would not be able to meet the demands of the textile industry. Textiles Research Associations (TRAs). Human Resources Development • The non-availability of quality manpower is a dampener to growth in many textile clusters. IITs. However. Private Vocational Training institutes etc. the Working Group suggests the following measures:- Increasing availability of textiles machinery The domestic textiles machinery manufacturing industry is projected to triple its capacity during the Eleventh Five Year Plan with adequate support from the Government. • The Working Group has estimated the incremental manpower requirement at 17. a strong foundation for industry has been laid on which world class manufacturing units can realize their full potential and make a mark in the international economy.851 by powerloom sector).25 million (21 million incremental + 8. To meet the incremental requirement for training.09 lakh shuttleless looms are required to be installed by the industry (20.• At this juncture. It is not only a weakness of the sector.000 . the textiles machinery industry has projected a capacity of 20.35 million indirect in the ancillary industry. but is fast emerging as a major threat to the growth which has been envisaged. and agencies like Apparel Training & Development Centers (ATDCs). polytechnics. during the Eleventh Plan. at the rate of 5. comprising of 12. an incremental 1. • The current training infrastructure in the country consists of engineering colleges. The maximum requirement is estimated in the clothing and apparel sector. One of the critical factors which would impact adversely on the growth process of the textiles industry is the inadequacy of training facilities in the country. the incremental spindle requirement is 29. However. even with enhanced capacity.37 million. Similarly. Weaving Service Centers (WSCs). Against this requirement.85 million spindles per annum by the end of Eleventh Plan. Powerlooms Service Centers (PSCs).85 million spindles per annum. ITIs.02 million direct and 5.

spinning. the indigenous textiles machinery industry does not produce knitting and garmenting machinery. with 5 percent interest reimbursement and 10 percent capital subsidy to encourage modernization. strategy – The Working Group has critically examined this issue and has suggested the following three-pronged (i) Transfer of textile machinery industry from the Ministry of Heavy Industries to the Ministry of Textiles – This will help to provide adequate support to domestic textiles machinery manufacturing industry in the implementation of a time-bound action plan to increase the availability of indigenous machinery to meet the demand from different segments of the textiles industry. Labour reforms • Rigid labour laws are now emerging as a constraint to the growth of the industry. One of the biggest factors that has triggered the growth of the Chinese industry is the domestic availability of the textiles machinery. particularly the clothing and apparel segment. 18. Further. A scheme on the lines of TUFS should be initiated. and have developed models which are suitable to the Chinese industry. (iii) A critical relook at importing second hand machinery – Permission to import recent vintage (technologically comparable. Globally reputed textiles machinery manufacturers have set up units in China. India should not become a technology junk yard. Sufficient care will have to be taken that while accepting such machinery. (ii) Aggressive wooing of the Foreign Direct Investment (FDI) in the textiles machinery sector To attract reputed manufactures of textiles machinery .shuttleless looms by the terminal year of the Eleventh Plan. There is need to liberalise labour laws on the following lines: . and with a significant residual life) may be given to importers along with benefits at par with those given to the import of new machinery. independent of laid down stipulations in the Press Note No. the Working Group recommends that Government may consider FDI proposals from textiles machinery manufacturers on a selective basis. To increase the FDI. weaving and processing – and invite them to set up facilities in India to meet the growing requirements of Indian industry. We should also encourage the global manufacturers to set up similar units in India to meet the requirement of the Indian textile industry.

as well as to offer contract appointments. 1956. and also increase the working hours in a week from forty eight to sixty. Section 10 of the Contract Labour (Regulation and Abolition) Act. For example. reward. Excess labour during lean periods or during the initial stages of developing an export market(s). • Permitting firms to adjust their workforce: Units employing over 100 people currently fall under the purview of Industrial Disputes Act. During this period. begun in 1991. by keeping units employing up to 500 people (presently 100) outside its purview. The section should exclude textile units engaged in export related activity (where exports / deemed exports comprising 50 percent or more of their sales) to facilitate outsourcing of activities without any restriction. Employment Conditions and Job Satisfaction The liberalization policies of the Indian government. Workforce adjustment (ILO Convention on Termination of Employment) at the instance of employer due to structural and other changes should be permitted. social security. etc. and to compensate for lower labour productivity. Autarkic policies of the past decades had limited foreign investment and prioritized the growth of domestic industry through import substitution and public ownership of much of the means of production. . can lead to financial difficulties. 1970 needs to be amended. welfare. many skilled and unskilled workers among the population had opted for better employment opportunities in other countries.• Permit use of contract labour in Export Oriented Units (EOUs): The export business is seasonal and contractual in nature. For example. especially for medium sized enterprises. promote and adjust the workforce as managerial rights. • Extending work hours: The Government also needs to consider the demand of labour intensive sections of the textiles industry such as made-ups and garmenting industry to increase the hours in a shift from nine at present to twelve. which did not help to improve working conditions for the majority of the Indian labor force. assisted in opening up the economy to domestic and international competition. in order to cater to the peak season requirements of customers. when the uncertainty of orders is high. countries such as China. Protection of the rights of these labour will be ensured in terms of their health. transfer. Malaysia regards the right to hire. Emphasis on self-reliance had eventually led to an economic crisis. Bangladesh and Sri Lanka have allowed contract labour in the textiles sector. There is need to relax the norms of the Industrial Disputes Act (Chapter VB). safety. The Act stipulates that employers must obtain necessary approvals for lay-offs. This proves to be a hindrance. assign work.

trade unions in India play a very prominent role in the business community. Though was predominantly unorganized industry even a few years back. acceptable remuneration. India's market liberalization led to the foreclosure of much of the traditional handloom cotton industry and resulted in nearly 2. for example. Along with mills that use the most advanced technology to process raw cotton and form cotton fiber. especially among the unprofitable firms. women as a whole have been relegated largely to agricultural and menial pursuits that pay the lowest wages. The opening up of economy gave the much-needed thrust to the Indian textile industry. it has not quickly solved the problem of unemployment and other social and economic ills. which has now successfully become one of the largest in the world. three-quarters of the working women of India were agricultural workers. As opposed to neighbouring China.3 million workers losing their jobs. In 1911. there also have existed a large number of small-scale workshops and households that use traditional handlooms (the type used by Mahatma Ghandi) and rely on manual labor for the processing of cotton. and women contribute an estimated 55 to 66 percent of the total farm labor force. Many of these workers have remained unemployed. India Textile Industry is one of the leading textile industries in the world. in 1991. Nearly 70 percent of the population as a whole derives its livelihood from land resources. the proportion was over 80 percent. working conditions. as the overall economy has grown. Every industry has a trade union that advocates the rights and employment opportunities of its members.Despite the benefits of economic liberalization. As much as 92 percent of the labor force in India is unionized. Short-and long-term job losses as a result of competition. the situation of working women in India has even deteriorated. Managers of the modern mills attribute this to the older age of hand-loom workers and their inflexibility or inability to adjust to the mechanized cotton mills. but the scenario started changing after the economic liberalization of Indian economy in 1991. One of the main areas of employment for many of the poor has been the cotton textile industry with its traditional concentration of mills in the cities of Bombay. have been common. In some ways. . Despite some noticeable advances for a small percentage of women. Some of the laborers of the cotton industry have gained employment in the textile industry. and welfare packages. Ahmedabad. Women constitute an important segment of the Indian labor force whose working conditions have not made significant progress. which with its labor force of 39 million is among the largest unionized industries. and Coimbatore. for example. Trade unions strive to obtain the best deal for their members in terms of wages.

02 II. 1.Employment in textile and allied sectors Employment (In Mn.94 1.57 0. 0.70 8.70 5. 8.22 7.29 1.14 33.86 6.75 1.00 0.26 0. 11.44 3.95 6.02 0. 5.20 11.00 0.19 0.65 1. 4. 6. Sector / Industry As on March 2006 I.24 5.43 0. Projected for the terminal year of the Eleventh Plan Increas e Textile sector Cotton/Man-made Fibre/Yarn Textile/Mill Sector (including SSI spinning & exclusive weaving units) Man-made Fibre/Filament Yarn Industry (including texturising industry) Decentralised Powerlooms Sector Handloom Sector Knitting Sector Processing Sector Woollen Sector Ready Made Garment Sector (including Knitwear Sector) 0. Sericulture Handicraft Sector Jute Industry i) ii) Organised Jute Industry Decentralised Jute Industry Total (I) 0.17 0. 10.06 12.45 0.20 45.46 2.50 5.22 0. 9. Allied Sector .00 0.16 4.50 0. Nos.08 0.40 0.15 1.43 3.50 0. No. 7.57 5.26 0.) Sr.08 7.

00 2.00 0.30 2. 4.1.37 .00 0.60 1.05 20.60 1.70 1.35 17.02 60. Cotton i) ii) iii) Cotton Agriculture Cotton Ginning/Pressing Cotton Trade 18.40 0.00 1.20 105.30 19.Total Sheep rearing Jute Agriculture Textile machinery industry & accessories Total (II) Grand Total (I + II ) 54.85 88.30 1.10 1.20 16.00 40.60 1.00 37.05 2.80 17.00 0. Sub .00 18.39 5. 3.

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