CHAPTER-1

INTRODUCTION

Human Resource Management

Human resource management is concerned with the
human beings in an organisation. It reflects a new
philosophy, a new outlook, approach and strategy, which
views an organisation’s manpower as its resources and
assets.
Human resource management is a managerial function
which facilitates the effective utilisation of people
(manpower) in achieving the organisational and
individual goals.
Earlier HRM was called by different names like personnel
management, personnel administration, staff
management, manpower management, labour relations,
industrial relations , labour management , labour
administration , labour management relations,
employee-employer relations , human capital
management and human asset management.
Simply, HRM is a management function that helps
the managers to recruit, select, train and develop the
organisational members for the purpose of achieving the
stated organisational goals.
In the present scenario, HRM is used as a synonym to
personnel to personnel management and the personnel
department is called as HR department.
Meaning and Definition of HRM
This definition also clearly focuses on the nature and
scope of the field of HRM. As related to nature, it portrays
that HRM is a comprehensive managerial function which
is people oriented, task oriented, and development,
globally oriented and is a continuous staff function which
 is very challenging. As related to scope it reveals that the
scope of HRM includes process or acquiring the personnel
and organisational goals, maintaining and developing
their skills and compensating their services.
Objectives
• To help the organisation to attain its goals effectively
by providing motivated employees.
• To utilise the available Human Resources effectively.
• To increase to the fullest the employee’s job
satisfaction and self-actualisation.
• To help maintain ethical policies and behaviour inside
and outside the organisation.
• To reconcile individual/group goals with
organisational goals.
Importance
Human Resource Management is a modern approach of
maintaining people at work place which focuses on
acquisition, development, utilisation and maintenance of
human resource to maintain the quality of Y work life.
• To increase productivity and profit.
• To produce employees who are easily adaptable to
change.
• To match demand and supply of Human Resource.
• To retain employees and motivate them to
accomplish company’s goal.
• To recognise merit and contribution of employees.
Recruitment and Selection
Recruitment and Selection is an important operation in
HRM, designed to maximise employee strength in order
to meet the employer's strategic goals and objectives. In
short, Recruitment and Selection is the process of
sourcing, screening, shortlisting and selecting the right
candidates for the filling the required vacant positions.
In this tutorial, we will discuss the various aspects of
Recruitment and Selection such as the recruitment
process, the factors affecting recruitment, recruitment
planning, methods of recruitment, recruitment interviews,
selection process and making an offer.

NEED FOR THE STUDY

The project, which has been done, will help the
 organisation immensely in location any drawback, which
may be present in their existing recruitment and selection
.this project will also help the organisation formulating
better recruitment and selection process.
• It is study and analyses the recruitment and
selection policies taken up by the organisation.
• Stipulate information to diagnose deficiency in
employees regarding skill, knowledge; determine
recruitment & selection policies need to prescribe
the means for employee recruitment for placement.
• At present recruitment and selection process is very
important for the hr personnel to achieve their
objectives in the company.
• The organisation needs to recruit new talents to
work in their organisation. They are to be having
good knowledge, skills and calibration.

SCOPE OF THE STUDY

The study aims to know the level of satisfaction of
employees towards existing recruitment process in APPM.
The scope of the study starts with need identification and
ends after placing the candidate at vacant position. The
study aims to find the Recruitment and Selection process
in the organisation. Hiring the Right Person in the right
place is an important exercise for every organisation. For
that the organisation must follow proper recruitment and
selection procedures. The study aims to know the Rules
and regulations in the hiring process.
OBJECTIVES OF THE STUDY
• To analyse the effectiveness of recruitment and
selection process at INTERNATIONAL PAPER APPM LTD.
• To understand the current recruitment & selection
policies being followed at APPM Limited.
• To Study the different methods of recruitment &
selection depending on the requirements of the
organisation.
• To find the relationship whether jobs offered based on
qualification to the employees in the organisation.
• To Study the changes of recruitment policy in recent
times in the organisation.
• To know how the company fulfils Its Manpower
requirements.
METHODOLOGY OF THE STUDY
The information has been presented using the
primary as well as secondary data obtained through
various sources.
• The Primary Source.
• The Secondary Source.
• The
Primary Source
primary data are those, which are, collected a
fresh and for first time and this happen to be original in
character. It is obtained through observation or through
direct communication with managers. It includes of data
from INTERNATIONAL PAPER APPM LTD
• The
Secondary Source
secondary data means the data is already
available i.e., they refer to the data, which has already
been collected and analysed by someone else. It includes
periodicals, magazines, newspapers, company newsletter,
reports, broachers etc. and through libraries and previous
project for guidance.
The tools that are used for the collection of data are
feedback forms, interviews and records of the
organisation. These tools helped in gathering the
required information for the study conducted.
LIMITATIONS OF THE STUDY
• The following are the major limitations of the
present study
• The study is confined to information willingly
shared by the organisation.
• Conclusions are derived from the opinions of the
employees, which are assumes to be unbiased
• The data in the study has been collected be means
of questionnaire.
• The insufficient time duration is another major
constraint for the present study.

CHAPTER-2
REVIEW OF LITERATURE
Introduction
The human resource management activities are
considered one of the most important activities that
have an impact on companies and among these
activities we will review in our review these are related
to recruitment and selection activities to try to clarify
these activities more and to stop the most important
practices used in recruitment processes and the
selection to review through our review what came in
many of the research papers Documented and published
in publishing magazines and websites. The recruitment
process aims to provide the best elements with excellent
qualifications and qualifications. The importance of the
recruitment process to the Human Resources
Department is to prevent hiring the wrong person, who
may cost the organization very much. Away from the
salaries and incentives offered, the process of employing
an inappropriate and effective component may cost
larger losses based on the decisions and activities
wrongly practiced. Therefore, this process is one of the
most important processes for managing human
resources and for the company as a whole. Whereas,
the selection process is the process that aims to select
the best and most suitable donor for the job. Taking into
consideration the conditions necessary in this process
and adopting the principle of justice, equality and equal
opportunities for all candidates, and that selection be
made on the basis of merit and merit, and there must be
a type of control when selecting employees, as the right
person is in the right place
Recruitment Process
Recruitment is a process of finding and attracting the
potential resources for filling up the vacant positions in
an organization. It sources the candidates with the
abilities and attitude, which are required for achieving
the objectives of an organization.
Recruitment process is a process of identifying the jobs
vacancy, analyzing the job requirements, reviewing
applications, screening, shortlisting and selecting the
right candidate.
To increase the efficiency of hiring, it is recommended
that the HR team of an organization follows the five
best practices (as shown in the following image). These
five practices ensure successful recruitment without any
interruptions. In addition, these practices also ensure
consistency and compliance in the recruitment process.
Recruitment process is the first step in creating a
powerful resource base. The process undergoes a
systematic procedure starting from sourcing the
resources to arranging and conducting interviews and
finally selecting the right candidates.
• Recruitment Planning
Recruitment planning is the first step of the recruitment
process, where the vacant positions are analyzed and
described. It includes job specifications and its nature,
experience, qualifications and skills required for the job,
etc.
A structured recruitment plan is mandatory to attract
potential candidates from a pool of candidates. The
potential candidates should be qualified, experienced
with a capability to take the responsibilities required to
achieve the objectives of the organization.

• Identifying Vacancy
The first and foremost process of recruitment plan is
identifying the vacancy. This process begins with
receiving the requisition for recruitments from different
department of the organization to the HR Department,
which contains −
Number of posts to be filled
Number of positions
Duties and responsibilities to be performed
Qualification and experience required
When a vacancy is identified, it the responsibility of the
sourcing manager to ascertain whether the position is
required or not, permanent or temporary, full-time or
part-time, etc. These parameters should be evaluated
before commencing recruitment. Proper identifying,
planning and evaluating leads to hiring of the right
resource for the team and the organization.
• Job Analysis
Job analysis is a process of identifying, analyzing, and
determining the duties, responsibilities, skills, abilities,
and work environment of a specific job. These factors
help in identifying what a job demands and what an
employee must possess in performing a job
productively.
Job analysis helps in understanding what tasks are
important and how to perform them. Its purpose is to
establish and document the job relatedness of
employment procedures such as selection, training,
compensation, and performance appraisal.
The following steps are important in analyzing a job −
Recording and collecting job information
Accuracy in checking the job information
Generating job description based on the information
Determining the skills, knowledge and skills, which are
required for the job
The immediate products of job analysis are job
descriptions and job specifications.
• Job Description
Job description is an important document, which is
descriptive in nature and contains the final statement of
the job analysis. This description is very important for a
successful recruitment process.
Job description provides information about the scope of
job roles, responsibilities and the positioning of the job
in the organization. And this data gives the employer
and the organization a clear idea of what an employee
must do to meet the requirement of his job
responsibilities.
Job description is generated for fulfilling the following
processes −
Classification and ranking of jobs
Placing and orientation of new resources
Promotions and transfers
Describing the career path
Future development of work standards
A job description provides information on the following
elements −
Job Title / Job Identification / Organization Position
Job Location
Summary of Job
Job Duties
Machines, Materials and Equipment
Process of Supervision
Working Conditions
Health Hazards
Job Specification
Job specification focuses on the specifications of the
candidate, whom the HR team is going to hire. The first
step in job specification is preparing the list of all jobs in
the organization and its locations. The second step is to
generate the information of each job.
This information about each job in an organization is as
follows −
Physical specifications
Mental specifications
Physical features
Emotional specifications
Behavioral specifications
A job specification document provides information on
the following elements −
Qualification
Experiences
Training and development
Skills requirements
Work responsibilities
Emotional characteristics
Planning of career
Job Evaluation
Job evaluation is a comparative process of analyzing,
assessing, and determining the relative value/worth of
a job in relation to the other jobs in an organization.
The main objective of job evaluation is to analyze and
determine which job commands how much pay. There
are several methods such as job grading, job
classifications, job ranking, etc., which are involved in
job evaluation. Job evaluation forms the basis for salary
and wage negotiations.
Recruitment Strategy
Recruitment strategy is the second step of the
recruitment process, where a strategy is prepared for
hiring the resources. After completing the preparation
of job descriptions and job specifications, the next step
is to decide which strategy to adopt for recruiting the
potential candidates for the organization.
While preparing a recruitment strategy, the HR team
considers the following points −
Make or buy employees
Types of recruitment
Geographical area
Recruitment sources
The development of a recruitment strategy is a long
process, but having a right strategy is mandatory to
attract the right candidates. The steps involved in
developing a recruitment strategy include −
Setting up a board team
Analyzing HR strategy
Collection of available data
Analyzing the collected data
Setting the recruitment strategy
Searching the Right Candidates
Searching is the process of recruitment where the
resources are sourced depending upon the requirement
of the job. After the recruitment strategy is done, the
searching of candidates will be initialized. This process
consists of two steps −
Source activation − Once the line manager verifies and
permits the existence of the vacancy, the search for
candidates starts.
Selling − Here, the organization selects the media
through which the communication of vacancies reaches
the prospective candidates.
Searching involves attracting the job seekers to the
vacancies. The sources are broadly divided into two
categories: Internal Sources and External Sources.
Internal Sources
Internal Sources
Internal sources of recruitment refer to hiring employees
within the organization through −
Promotions
Transfers
Former Employees
Internal Advertisements (Job Posting)
Employee Referrals
Previous Applicants
External Sources
External sources of recruitment refer to hiring
employees outside the organization through −
Direct Recruitment
Employment Exchanges
Employment Agencies
Advertisements
Professional Associations
Campus Recruitment
Word of Mouth
Screening / Shortlisting
Screening starts after completion of the process of
sourcing the candidates. Screening is the process of
filtering the applications of the candidates for further
selection process.
Screening is an integral part of recruitment process that
helps in removing unqualified or irrelevant candidates,
which were received through sourcing. The screening
process of recruitment consists of three steps −
Reviewing of Resumes and Cover Letters
Reviewing is the first step of screening candidates. In
this process, the resumes of the candidates are reviewed
and checked for the candidates’ education, work
experience, and overall background matching the
requirement of the job
While reviewing the resumes, an HR executive must
keep the following points in mind, to ensure better
screening of the potential candidates −
Reason for change of job
Longevity with each organization
Long gaps in employment
Job-hopping
Lack of career progression
Conducting Telephonic or Video Interview
Conducting telephonic or video interviews is the second
step of screening candidates. In this process, after the
resumes are screened, the candidates are contacted
through phone or video by the hiring manager. This
screening process has two outcomes −
It helps in verifying the candidates, whether they are
active and available.
It also helps in giving a quick insight about the
candidate’s attitude, ability to answer interview
questions, and communication skills.
Identifying the top candidates
Identifying the top candidates is the final step of
screening the resumes/candidates. In this process, the
cream/top layer of resumes are shortlisted, which
makes it easy for the hiring manager to take a decision.
This process has the following three outcomes −
Shortlisting 5 to 10 resumes for review by the hiring
managers
Providing insights and recommendations to the hiring
manager
Helps the hiring managers to take a decision in hiring
the right candidate
Evaluation and Control
Evaluation and control is the last stage in the process of
recruitment. In this process, the effectiveness and the
validity of the process and methods are assessed.
Recruitment is a costly process, hence it is important
that the performance of the recruitment process is
thoroughly evaluated.
The costs incurred in the recruitment process are to be
evaluated and controlled effectively. These include the
following −
Salaries to the Recruiters
Advertisements cost and other costs incurred in
recruitment methods, i.e., agency fees.
Administrative expenses and Recruitment overheads
Overtime and Outstanding costs, while the vacancies
remain unfilled
Cost incurred in recruiting suitable candidates for the
final selection process
Time spent by the Management and the Professionals in
preparing job description, job specifications, and
conducting interviews.
Selection process
Every organisation creates a selection process because
they have their own requirements. Although, the main
steps remain the same. So, let’s understand in brief how
the selection process works.
• Preliminary Interview
This is a very general and basic interview conducted so
as to eliminate the candidates who are completely unfit
to work in the organisation. This leaves the organisation
with a pool of potentially fit employees to fill their
vacancies.
• Receiving Applications
Potential employees apply for a job by sending
applications to the organisation. The application gives
the interviewers information about the candidates like
their bio-data, work experience, hobbies and interests.
• Screening Applications
Once the applications are received, they are screened by
a special screening committee who choose candidates
from the applications to call for an interview. Applicants
may be selected on special criteria like qualifications,
work experience etc.
• Employment Tests
Before an organisation decides a suitable job for any
individual, they have to gauge their talents and skills.
This is done through various employment tests like
intelligence tests, aptitude tests, proficiency tests,
personality tests etc.
• Employment Interview
The next step in the selection process is the employee
interview. Employment interviews are done to identify a
candidate’s skill set and ability to work in an
organisation in detail. Purpose of an employment
interview is to find out the suitability of the candidate
and to give him an idea about the work profile and
what is expected of the potential employee. An
employment interview is critical for the selection of the
right people for the right jobs.
• Checking References
The person who gives the reference of a potential
employee is also a very important source of
information. The referee can provide info about the
person’s capabilities, experience in the previous
companies and leadership and managerial skills. The
information provided by the referee is meant to kept
confidential with the HR department.
• Medical Examination
The medical exam is also a very important step in the
selection process. Medical exams help the employers
know if any of the potential candidates are physically
and mentally fit to perform their duties in their jobs. A
good system of medical checkups ensures that the
employee standards of health are higher and there are
fewer cases of absenteeism, accidents and employee
turnover.
• Final Selection and Appointment Letter
This is the final step in the selection process. After the
candidate has successfully passed all written tests,
interviews and medical examination, the employee is
sent or emailed an appointment letter, confirming his
selection to the job. The appointment letter contains all
the details of the job like working hours, salary, leave
allowance etc. Often, employees are hired on a
conditional basis where they are hired permanently
after the employees are satisfied with their
performance.
Conclusions:
This paper reviewed some of the research papers,
articles and reports published during the past ten years
of the year 2020. The researcher focused on one of the
most important topics of the Human Resources
Management Department, which is recruitment and
selection processes. The review provided a detailed
overview of both recruitment and selection, and
reviewed the procedures and processes that are
performed with these tasks according to their nature
from one organization to another, but there is a general
character or we can say that there is a general
framework for carrying out these tasks. The researcher
found through his review of studies and articles that the
process of selection and selection is one of the most
important jobs that the Human Resources Department
claims, and the importance of these jobs lies in being
the first source in supplying organizations and
companies with the workforce required to achieve the
goals of the company. However, through my reading of
some studies that came during the last ten years, I
found that this topic did not receive more attention
from researchers, but there is a difficulty in obtaining
and collecting information related to this topic.
Therefore, this review may be useful for future
researchers and it will also be my first step for future
research, which will address this topic more broadly and
accurately.

CHAPTER-3
PROFILE OF TEXTILE
INDUSTRY
INTRODUCTION
The Indian textile industry is one of the largest in the
world with a massive raw material and textiles
manufacturing base. Our economy is largely dependent
on the textile manufacturing and trade in addition to
other major industries. About 27% of the foreign
exchange earnings are on account of export of textiles
and clothing alone. The textiles and clothing sector
contributes about 14% to the industrial production and
3% to the gross domestic product of the country.
Around 8% of the total excise revenue collection is
contributed by the textile industry. So much so, the
textile industry accounts for as large as 21% of the total
employment generated in the economy. Around 35
million people are directly employed in the textile
manufacturing activities. Indirect employment including
the manpower engaged in agricultural based raw-
material production like cotton and related trade and
handling could be stated to be around another 60
million.
A textile is the largest single industry in India (and
amongst the biggest in the world), accounting for about
20% of the total industrial production. It provides direct
employment to around 20 million people. Textile and
clothing exports account for one-third of the total value
of exports from the country. There are 1,227 textile mills
with a spinning capacity of about 29 million spindles.
While yarn is mostly produced in the mills, fabrics are
produced in the powerloom and handloom sectors as
well. The Indian textile industry continues to be
predominantly based on cotton, with about 65% of raw
materials consumed being cotton. The yearly output of
cotton cloth was about 12.8 billion m (about 42 billion
ft). The manufacture of jute products (1.1 million metric
tons) ranks next in importance to cotton weaving.
Textile is one of India’s oldest industries and has a
formidable presence in the national economy inasmuch
as it contributes to about 14 per cent of manufacturing
value-addition, accounts for around one-third of our
gross export earnings and provides gainful employment
to millions of people. They include cotton and jute
growers, artisans and weavers who are engaged in the
organised as well as decentralised and household
sectors spread across the entire country.
INDIAN TEXTILE INDUSTRY STRUCTURE AND GROWTH
India’s textile industry is one of the economy’s largest.
In 2000/01, the textile and garment industries
accounted for about 4 percent of GDP, 14 percent of
industrial output, 18 percent of industrial employment,
and 27 percent of export earnings (Hashim). India’s
textile industry is also significant in a global context,
ranking second to China in the production of both
cotton yarn and fabric and fifth in the production of
synthetic fibers and yarns.
In contrast to other major textile-producing countries,
mostly mostly small-scale, nonintegrated spinning,
weaving, cloth finishing, and apparel enterprises, many
of which use outdated technology, characterize India’s
textile sector. Some, mostly larger, firms operate in the
“organized” sector where firms must comply with
numerous government labor and tax regulations. Most
firms, however, operate in the small-scale
“unorganized” sector where regulations are less
stringent and more easily evaded.
The unique structure of the Indian textile industry is due
to the legacy of tax, labor, and other regulatory policies
that have favored small-scale, labor-intensive
enterprises, while discriminating against larger scale,
more capital-intensive operations. The structure is also
due to the historical orientation towards meeting the
needs of India’s predominately low-income domestic
consumers, rather than the world market. Policy
reforms, which began in the 1980s and continued into
the 1990s, have led to significant gains in technical
efficiency and international competitiveness,
particularly in the spinning sector. However, broad
scope remains for additional reforms that could
enhance the efficiency and competitiveness of India’s
weaving, fabric finishing, and apparel sectors.
Structure Of India’s Textile Industry
Unlike other major textile-producing countries, India’s
textile industry is comprised mostly of small-scale,
nonintegrated spinning, weaving, finishing, and apparel-
making enterprises. This unique industry structure is
primarily a legacy of government policies that have
promoted labor-intensive, small-scale operations and
discriminated against larger scale firms:
• Composite Mills. Relatively large-scale mills that
integrate spinning, weaving and, sometimes, fabric
finishing are common in other major textile-producing
countries. In India, however, these types of mills now
account for about only 3 percent of output in the textile
sector. About 276 composite mills are now operating in
India, most owned by the public sector and many
deemed financially “sick.”
• Spinning. Spinning is the process of converting cotton
or manmade fiber into yarn to be used for weaving and
knitting. Largely due to deregulation beginning in the
mid-1980s, spinning is the most consolidated and
technically efficient sector in India’s textile industry.
Average plant size remains small, however, and
technology outdated, relative to other major producers.
In 2002/03, India’s spinning sector consisted of about
1,146 small-scale independent firms and 1,599 larger
scale independent units.
• Weaving and Knitting. Weaving and knitting converts
cotton, manmade, or blended yarns into woven or
knitted fabrics. India’s weaving and knitting sector
remains highly fragmented, small-scale, and labor-
intensive. This sector consists of about 3.9 million
handlooms, 380,000 “powerloom” enterprises that
operate about 1.7 million looms, and just 137,000 looms
in the various composite mills. “Powerlooms” are small
firms, with an average loom capacity of four to five
owned by independent entrepreneurs or weavers.
Modern shuttleless looms account for less than 1
percent of loom capacity.
• Fabric Finishing. Fabric finishing (also referred to as
processing), which includes dyeing, printing, and other
cloth preparation prior to the manufacture of clothing,
is also dominated by a large number of independent,
small scale enterprises. Overall, about 2,300 processors
are operating in India, including about 2,100
independent units and 200 units that are integrated
with spinning, weaving, or knitting units.
• Clothing. Apparel is produced by about 77,000 small-
scale units classified as domestic manufacturers,
manufacturer exporters, and fabricators
(subcontractors).
Growth of Textile Industry
India has already completed more than 50 years of its
independence. The analysis of the growth pattern of
different segment of the industry during the last five
decades of post independence era reveals that the
growth of the industry during the first two decades after
the independence had been gradual, though lower and
growth had been considerably slower during the third
decade. The growth thereafter picked up significantly
during the fourth decade in each and every segment of
the industry. The peak level of its growth has however
been reached during the fifth decade i.e., the last ten
years and more particularly in the 90s. The Textile Policy
of 1985 and Economic Policy of 1991 focussing in the
direction of liberalisation of economy and trade had in
fact accelerated the growth in 1990s. The spinning
spearheaded the growth during this period and man-
made fibre industry in the organised sector and
decentralised weaving sector.
Size of Textile Industry in India
• The textile industry in India covers a wide gamut of
activities ranging from production of raw material like
cotton, jute, silk and wool to providing high value-added
products such as fabrics and garments to consumers.
• The industry uses a wide variety of fibres ranging from
natural fibres like cotton, jute, silk and wool to man
made fibres like polyester, viscose, acrylic and multiple
blends of such fibres and filament yarn.
• The textile industry plays a significant role in Indian
economy by providing direct employment to an
estimated 35 million people, by contributing 4 per cent
of GDP and accounting for 35 per cent of gross export
earnings. The textile sector contributes 14 per cent of
the value-addition in the manufacturing sector.
• Textile exports during the period of April-February
2003-2004 amounted to $11,698.5 million as against
$11,142.2 million during the same period in the
previous year, showing an increase of around 5 per cent.
• Estimates say that the textile sector might achieve
about 15 to 18 per cent growth this year following
dismantling of MFA.
ROLE OF INDIAN TEXTILE INDUSTRY IN THE ECONOMY
Textile industry plays a significant role in the economy.
The Indian textile industry is one of the largest and most
important sectors in the economy in terms of output,
foreign exchange earnings and employment in India. It
contributes 20 per cent of industrial production, 9 per
cent of excise collections, 18 per cent of employment in
industrial sector, nearly 20 per cent to the country’s
total export earnings and 4 per cent ton the GDP. The
sector employs nearly 35 million people and is the
second highest employer in the country. The textile
sector also has a direct link with the rural economy and
performance of major fibre crops and crafts such as
cotton, wool, silk, handicrafts and handlooms, which
employ millions of farmers and crafts persons in rural
and semi-urban areas. It has been estimated that one
out of every six households in the country depends
directly or indirectly on this sector.
India has several advantages in the textile sector,
including abundant availability of raw material and
labour. It is the second largest player in the world cotton
trade. It has the largest cotton acreage, of about nine
million hectares and is the third largest producer of
cotton fibre in the world. It ranks fourth in terms of
staple fibre production and fourth in polyester yarn
production. The textile industry is also labour intensive,
thus India has an advantage.
The key advantages of the Indian industry are:
• India is the third largest producer of cotton with the
largest area under cotton cultivation in the world. It has
an edge in low cost cotton sourcing compared to other
countries.
• Average wage rates in India are 50-60 per cent lower
than that in developed countries, thus enabling India to
benefit from global outsourcing trends in labour
intensive businesses such as garments and home
textiles.
• Design and fashion capabilities are key strengths that
will enable Indian players to strengthen their
relationships with global retailers and score over their
Chinese competitors.
• Production facilities are available across the textile
value chain, from spinning to garments manufacturing.
The industry is investing in technology and increasing its
capacities which should prove a major asset in the years
to come.
• Large Indian players such as Arvind Mills, Welspun
India, Alok Industries and Raymonds have established
themselves as 'quality producers' in the global market.
This recognition would further enable India to leverage
its position among global retailers.
• India has gathered experience in terms of working
with global brands and this should benefit Indian
vendors.
GOVERNMENT INITIATIVES
With a view to raise India's share in the global textiles
trade to 10 per cent by 2015 (from the current 3 per
cent), the Ministry of Textiles proposes 50 new textile
parks. Out of the 50, 30 have been already sanctioned
by the government (with a cost of US$ 710 million). Set
up under the Scheme for Integrated Textile Parks (SITP),
this initiative will not only make the industry cost
competitive, but will also enhance manufacturing
capacity in the sector.
Apart from the above, a series of progressive measures
have been planned to strengthen the textile sector in
India:
• Technology Mission on Cotton (TMC)
• Technology Upgradation fund Scheme (TUFS)
• Setting up of Apparel Training and Design Centres
(ATDCs)
• 100 per cent Foreign Direct Investment (FDI) in the
textile sector under automatic route.
• Setting up two design centres in Gujarat in
collaboration with National Institute of Fashion
Technology.
• Setting up a Handloom Plaza in Ahmedabad with an
estimated investment of US$ 24.6 million.
• Revival plans of the mills run by National Textiles
Corporation (NTC). Already, for the revival of 18 textile
mills, US$ 2.21 million worth of machineries has been
ordered for the upgradation and modernisation of these
mills.
• Setting up a handloom mall with an investment of US$
24.6 million at Jehangir Mill in Ahmedabad.
• Scrapping of the Textile Committee cess being
collected from the textile and textile machinery industry
under the Textile Committee Act.
In a further bid to bolster the envisaged annual growth
rate of 11 per cent, the Government will also increase
the TUF (Technology Upgradation Fund) from US$ 124
million in 2006-07 to US$ 211 million in 2007-08.
The Government of India has also included new
schemes in the Annual Plan for 2007-08 to provide a
boost to the textile sector. These include schemes for
Foreign Investment Promotion to attract foreign direct
investment in textiles, clothing and machinery; Brand
Promotion on Public-Private Partnership (PPP))
approach to develop global acceptability of Indian
apparel brands; Trade Facilitation Centres for Indian
image branding; Fashion Hubs for creation of
permanent market place for the benefit of Indian
fashion industry; Common Compliance Code to
encourage acceptability among apparel buyers and
Training Centres for Human Resource Development on
Public Private Partnership (PPP) mode.
INDIAN TEXTILE INDUSTRY
In textile Scenario
In exports Cotton yarns, fabric, made ups etc made
largest chunk with US$ 3.33 Billion or 26.5% in textiles
category, and Ready Made garments (RMG)-cotton
including accessories made largest chunk with 4.67
Billion US $ or 37.1 % of total exports. Whereas,
manmade yarn and fabrics in textiles group and RMG–
Man made fibers constituted second position in the two
categories, respectively. Carpets and woolen garments
are other items exported from India.
In global scenario
Developed countries' exports declined from 52.2% share
in 1990 to 37.8 % in 2002. And that of developing
countries increased from 47.8% to 62.2 % in the same
period. In 2003 the exports figures in percentage of the
world trade in Textiles Group (for select countries) were:
The above chart clearly shows that export of world
trade in textile group. Among world textile group EU
occupies 34.80% of export, next China at 15.90%, USA at
6.40%, Republic of Korea at 6.00% Taipei, Ch at 5.50%,
India and Japan at 3.80% respectively, Pakistan at
3.40%, turkey at 3.10% and Mexico at 1.20%.
In Clothing Sector the figures were as below in 2003 in
percentage of total experts globally:
In this sector the exports have declined for EU (15) from
42% to 26.5% in period 1980-2003 whereas of China
increased from 4% to 23% and of India from 1.7% to
2.9% only. We can see that developing countries' share
in textiles had declined and in clothing it has increased
sharply.
EXPORT SCENARIO:
Textiles contributed 20% of India's exports to about US $
12.5 Billion. The Quota Countries mainly USA, EU (15)
and Canada constituted 70 % of total garment exports
and 40% of India's textiles exports. In non-quota
countries UAE is the largest market with 7% of textile
exports and 10% of garment exports from India.

The above table clearly depicts the export of readymade

garments for the last five years. In the year of 2001-
2002 the value of export of readymade garment is
395.23 and in the year 2005-2006 the value is 8200.00.
From 2001-2002 it started increasing and in the year
2004-2005 it declines and again in the year 2005-2006 it
increases.
INDIAN TEXTILE INDUSTRY – SWOT ANALYSIS
Strength
» India has rich resources of raw materials of textile
industry. It is one of the largest producers of cotton in
the world and is also rich in resources of fibres like
polyester, silk, viscose etc.
» India is rich in highly trained manpower. The country
has a huge advantage due to lower wage rates. Because
of low labor rates the manufacturing cost in textile
automatically comes down to very reasonable rates.
» India is highly competitive in spinning sector and has
presence in almost all processes of the value chain.
» Indian garment industry is very diverse in size,
manufacturing facility, type of apparel produced,
quantity and quality of output, cost, and requirement
for fabric etc. It comprises suppliers of ready-made
garments for both, domestic or exports markets.
Weakness
» Knitted garments manufacturing has remained as an
extremely fragmented industry. Global players would
prefer to source their entire requirement from two or
three vendors and the Indian garment units find it
difficult to meet the capacity requirements.
» Industry still plagued with some historical regulations
such as knitted garments still remaining as a SSI domain.
» Labour force giving low productivity as compared to
other competing countries.
» Technology obsolescence despite measures such as
TUFS.
» Low bargaining power in a customer-ruled market.
» India seriously lacks in trade pact memberships, which
leads to restricted access to the other major markets.
» Indian labour laws are relatively unfavorable to the
trades and there is an urgent need for labour reforms in
India.
Opportunity
» Low per-capita domestic consumption of textile
indicating significant potential growth.
» Domestic market extremely sensitive to fashion fads
and this has resulted in the development of a
responsive garment industry.
» India's global share is just 3% while China controls
about 15%. In post-2005, China is expected to capture
43% of global textile trade.
» Companies need to concentrate on new product
developments.
» Increased use of CAD to develop designing capabilities
and for developing greater options.
Threats
» Competition in post-2005 is not just in exports, but is
also likely within the country due to cheaper imports of
goods of higher quality at lower costs.
» Standards such as SA-8000 or WARP have resulted in
increased pressure on companies for improvement of
their working practices.
» Alternative competitive advantages would continue to
be a barrier.
CONCLUSION
The Indian textile industry has a significant presence in
the Indian economy as well as in the international
textile economy. Its contribution to the Indian economy
is manifested in terms of its contribution to the
industrial production, employment generation and
foreign exchange earnings. The industry also contributes
significantly to the world production of textile fibres and
yarns including jute. In the world textile scenario, it is
the largest producer of jute, second largest producer of
silk, third largest producer of cotton and cellulosic fibre\
yarn and fifth largest producer of synthetic fibre\yarn.
Textile Industry is providing one of the most basic needs
of people and the holds importance; maintaining
sustained growth for improving quality of life. The
Government of India has also included new schemes in
the Annual Plan for 2007-08 to provide a boost to the
textile sector. These include schemes for Foreign
Investment Promotion to attract foreign direct
investment in textiles, clothing and machinery etc.

CHAPTER-4