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EXPORT PERFORMANCE OF READYMADE GARMENTS INDUSTRY IN SALEM

CITY, TAMIL NADU

Article · October 2018

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© 2018 JETIR October 2018, Volume 5, Issue 10 www.jetir.org (ISSN-2349-5162)

EXPORT PERFORMANCE OF READYMADE

GARMENTS INDUSTRY IN SALEM CITY,
TAMIL NADU
Dr.V.R.PALANIVELU 1 A.APDHULKATHAR 2

ABSTRACT
The aim of this article is explanation of the export performance and identification of motives
affecting the export performance of readymade garments enterprise in Salem city. The study is based on
empirical research and sample size is 50 exporters and manufacturers of readymade garments. Various
factors affecting the export performance is analyzed using descriptive analysis and Garrett ranking. The
result indicates operational characteristics and factors which has a significant impact on export performance
of the readymade garment industry.

Keywords: Export, Factors, performance, readymade garments.

OVERVIEW OF READYMADE GARMENT INDUSTRY

The apparel industry is the most important supply of currency exchange inflow for India with the clothes
export accounting for nearly 16% of the complete commodity exports of the country. Indian garments
export business made great success in the past few years and today many of the leading fashion labels, all
over the world, are known to source their products from India. This speaks volume of India as a major
supplier of top quality fashion garments if one takes into the account that India garment exports were
negligible till the 1970’s. The Indian government is encouraging joint ventures in textile/garment industry
with foreign collaboration.

SIGNIFICANCE OF TEXTILE AND GARMENT INDUSTRY

Textiles and garments industry form a significant portion of manufacturing base of many developing
countries. Textiles industry is one of the principal pillars keeping the Indian economy. The Indian textile
industry presents employment to a big number of skilled and unskilled employees within the nation. It
contributes about 10% of the whole annual export. Despite these, India’s entire share in the world textiles

1
Dr. V. R. Palanivelu, Professo –Cum –Director (i/c), Periyar Institute of Management Studies (PRIMS) Periyar University,
Salem-636011, Tamil Nadu, India. Mail Id : drvrpalanivelu@gmail.com
1
A.Apdhul Kathar Ph.D.Research Scholar, Periyar Institute of Management Studies (PRIMS) Periyar University, Salem-636011,
Tamil Nadu, India. Mail Id: abdulkathar120288@gmail.com

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exchange is still maintained at round 3 %. Mills, power looms and handlooms constitute three impartial
sectors of the Indian Textiles enterprise. The mill sector is geared up, mechanized and modernized,
concentrating within the creation of yarn whereas the power loom and handloom sectors have remained
technologically backward and stagnant. Most of India’s competitors in textiles on the world market have a
large number of looms.

SALEM – TEXTILE PROCESSING HUB OF TAMILNADU

Salem is one of the fundamental cloth processing hubs of Tamilnadu. In Salem District significant number
of power looms and Auto looms are functioning in Salem, Idapady and Mettur Taluks. Handlooms are
functioning in high numbers at Omalur, Edapady and Salem Taluks. Salem is well known for its readymade
garment Manufacturing and Exporting the Readymade garments to European international locations, USA,
Canada and Australia. Reasonable number of spinning mills is functioning in this District. Salem is the main
city in garment exports in India. Salem Ammapet and Elampillai are very famous for the Handloom
weaving of silk Dhotis'. There are many Co-operative societies functioning in the district with direct
marketing of the silk dhotis produced at Salem. The Ammapet weaver's co-operative society has a turnover
of 2.40 crores and its primary merchandise is cotton sarees, bed sheets, towels, silk sarees and dhotis.
Garment export has centered itself as one of the vital primary business within the district.

REVIEW OF LITERATURE

1. Deshpande M.V. (1985), in his study examined the existing export promotion institutions in providing
incentives and services to the exporters. The export firm should have information about the potential
markets of every country in which it is interested. A key function of an export promotion institution is to
provide export marketing and general trade Information to government departments dealing with foreign
trade (Deshpande, 1985)
2. Subramanian G (1987) in his study, the largest employer in the industrial sector is the industries with
cotton as its pivotal raw material. Cotton ranks third place in India, constituting five percent of the total
cropped area. It is a unique crop in India with vast potentialities in the value addition process. More than
eight percent of cloth in India is cotton, which includes the cotton component of blended fabrics
(Subramanian, 1987)
3. Hayat Albukhanfar and Dr.Younos Vakilalroaia, in their study they explained the relationship between
strategy of exports market development and performance, identification of factors affecting the exports
performance of the ports customs. The study is based on deductive reasoning and structural equation
modeling (SEM). Population is the economics experts and practitioners working in the port of
Khorramshahr and the sample size are 218. The results indicate that market and industry characteristics and
strategy of exports market development has a significant impact on exports performance of the customs of
the port. (Hayat & Younos, 2013)

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STATEMENT OF THE PROBLEM

Readymade garment manufacturers produce readymade garments as per the Specification, design and orders
given by the foreign buyers. Due to the involvement of the manufacturers and the Government, they have
achieved very good progress in readymade garment production and export. Indian economy reaches
sustainable growth through export of readymade garments. But readymade garments exporters suffer with
heavy risk. They are unable to send or export the goods on time due to labour problem, raw material
problem, Power crisis and now recently demonetization. This study focuses on various factors that affect the
export performance readymade garments. It is also relevant to consider the factors that affect the growth of
the garment industry and take appropriate remedial measures to solve the problems.

OBJECTIVES

 The main objective of this study is to analyze the factors influencing the export performance of
readymade garment industry in Salem city.

METHODOLOGY
The study carried out by the researcher is descriptive research. The sample size is 50 readymade garment
manufacturers. The sampling method used in this research is cluster sampling method. The study has used
both primary and secondary data. Primary data is collected from the manufacturers and exporters of
readymade garment from various places in Salem city like Ammapet, Gugai, and kondalampatti using
questionnaire through interview method. The tools used for analysis are descriptive analysis and Garrett
ranking method.

FINDINGS
 60% of the respondents are satisfied with the availability of raw materials and its quality.
 42% of the respondents are satisfied with the availability of skilled labour.
 40% of the respondents are satisfied with the credit facility and loans provided by the co- operatives
and banks.
 60% of the respondents are not satisfied with the loan facility and high interest for the loans.
 52% of the respondents are satisfied with the transport facilities.
 76% of the respondents feel that export procedure are too complicated and needs clarity and awareness
from experts.
 65% of the respondents feel that there is delay in payment for export orders.
 In Garrett ranking most of the manufacturers are in fear of meeting the standards of quality and its ranks
first among the other factors.

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SUGGESTIONS
 Readymade garment manufacturers must concentrate on export promotional strategies like obtaining
international certification, own websites, international and national trade fairs.
 Proper training for unskilled and semi-skilled labour should be imparted. It will increase the labour
efficiency and productivity.
 The governments should take necessary steps to provide infrastructure like airport, supply of power,
container facilities and reduction in freight charges.

CONCLUSION
Indian Textile industry and readymade garment industry is one of the main pillars in Indian Economy. The
research focuses on the innumerable factors affecting export performance faced by the readymade garments
exporters. The factors are analyzed on various areas related to high quality of raw materials, labour
Problems, financial problems, transportation problems, settlement issues, Government official problems,
demonetization, ISO issues and pollution problems. There was a lag in export of readymade garments due to
demonetization implemented by the Indian Government and Reserve Bank of India. Recently the central
government implemented the GST (Goods and Services tax). The impact of GST on Textile industry and
readymade garment industry is expected to be positive in long run.

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