| Current Status | | | | and apparel companies. |
| The textile industry holds significant status in the | | | | Despite some motivating step taken by the |
| India. Textile industry provides one of the most | | | | government, other problems still sustains like various |
| fundamental necessities of the people. It is an | | | | taxes and excise imbalances due to diversification |
| independent industry, from the basic requirement of | | | | into 35 states and Union Territories. However, an |
| raw materials to the final products, with huge | | | | outline of VAT is being implemented in place of all |
| value-addition at every stage of processing. | | | | other tax diversifications, which will clear these |
| | | | imbalances once it is imposed fully. |
| The textile industry is the largest industry in terms of | | | | Labour Laws: |
| employment economy, expected to generate 12 | | | | In India, labour laws are still found to be relatively |
| million new jobs by 2010. It generates massive | | | | unfavorable to the trades, with companies having not |
| potential for employment in the sectors from | | | | more than ideal model to follow a 'hire and fire' policy. |
| agricultural to industrial. Employment opportunities are | | | | Even the companies have often broken their business |
| created when cotton is cultivated. It does not need | | | | down into small units to avoid any trouble created by |
| any exclusive Government support even at present | | | | labour unionization. |
| to go further. Only thing needed is to give some | | | | In past few years, there has been movement |
| directions to organize people to get enough share of | | | | gradually towards reforming labour laws, and it is |
| the profit to spearhead development. | | | | anticipated that this movement will uphold the |
| Segments | | | | environment more favorable. |
| Textile industry is constituted of the following | | | | Distant Geographic Location: |
| segmentso Readymade Garmentso Cotton Textiles | | | | There are some high-level disadvantages for India |
| including Handlooms (Millmade / Powerloom/ | | | | due to its geographic location. For the foreign |
| Handloom)o Man-made Textileso Silk Textileso | | | | companies, it has a global logistics disadvantage due |
| Woollen Textileso Handicrafts including Carpetso Coiro | | | | the shipping cost is higher and also takes much more |
| Jute | | | | time comparing to some other manufacturing |
| The cottage industry with handlooms, with the | | | | countries like Mexico, Turkey, China etc. The inbound |
| cheapest of threads, produces average dress | | | | freight traffic has been also low, which affects cost |
| material, which costs only about 200 INR featuring | | | | of shipping - though, movement of containers are |
| fine floral and other patterns. It is not necessary to | | | | not at reasonable costs. |
| add any design to it. The women of the house spin | | | | Lack of trade memberships: |
| the thread, and weave a piece in about a week. | | | | India is serious lacking in trade pact memberships, |
| It is an established fact that small and irregular | | | | which leads to restricted access to the other major |
| apparel production can be profitable by providing | | | | markets. This issue made others to impose quota |
| affordable casual wear and leisure garments varieties. | | | | and duty, which put scissors on the sourcing |
| Now, one may ask, where from the economy and | | | | quantities from India. |
| the large profit comes in if the lowest end of the | | | | Opportunities |
| chain does not get paid with minimum per day labour | | | | It is anticipated that India's textile industry is likely to |
| charge. It is an irony of course. What people at the | | | | do much better. Since the consumption of domestic |
| upper stratum of the chain do is, to apply this fabric | | | | fibre is low, the growth in domestic consumption in |
| into a design with some imagination and earn in | | | | tandem is anticipated with GDP of 6 to 8 % and this |
| millions. The straight 6 yards simple saree, drape in | | | | would support the growth of the local textile market |
| with a blouse with embroideries and bead work, then | | | | at about 6 to 7 % a year. |
| it becomes a designer¡¦s ensemble. For | | | | India can also grab opportunities in the export |
| an average person, it can be a slant cut while giving it | | | | market. The industry has the potential of attaining |
| a shape, which can double the profit. Maybe, the 30 | | | | $34bn export earnings by the year 2010. The |
| % credit that the industry is taking for its | | | | regulatory polices is helping out to enhance |
| contribution to Indian economy as good as 60 % this | | | | infrastructures of apparel parks, Specialized textile |
| way. Though it is an industry, it has to innovate to | | | | parks, EPZs and EOUs. |
| prosper. It has all the ingredients to go ahead. | | | | The Government support has ensured fast |
| Current Scenario | | | | consumption of clothing as well as of fibre. A single |
| Textile exports are targeted to reach $50 billion by | | | | rate will now be prevalent throughout the country. |
| 2010, $25 billion of which will go to the US. Other | | | | The Indian manufacturers and suppliers are improving |
| markets include UAE, UK, Germany, France, Italy, | | | | design skills, which include different fabrics according |
| Russia, Canada, Bangladesh and Japan. The name of | | | | to different markets. Indian fashion industry and |
| these countries with their background can give | | | | fashion designers are marking their name at |
| thousands of insights to a thinking mind. The slant cut | | | | international platform. Indian silk industry that is |
| that will be producing a readymade garment will sell | | | | known for its fine and exclusive brocades, is also |
| at a price of 600 Indian rupees, making the value | | | | adding massive strength to the textile industry. |
| addition to be profitable by 300 %. | | | | The industry is being modernized via an exclusive |
| Currently, because of the lifting up of the import | | | | scheme, which has set aside $5bn for investment in |
| restrictions of the multi-fibre arrangement (MFA) | | | | improvisation of machinery. International brands, such |
| since 1st January, 2005 under the World Trade | | | | as Levis, Wal-Mart, JC Penny, Gap, Marks & |
| Organization (WTO) Agreement on Textiles and | | | | Spencer and other industry giants are sourcing more |
| Clothing, the market has become competitive; on | | | | and more fabrics and garments from India. Alone |
| closer look however, it sounds an opportunity | | | | Wal-Mart had purchased products worth $200mn last |
| because better material will be possible with the | | | | year and plans to increase buying up to $3bn in the |
| traditional inputs so far available with the Indian | | | | coming year. The clothing giant from Europe, GAP is |
| market. | | | | also sourcing from India. |
| At present, the textile industry is undergoing a | | | | Anticipation |
| substantial re-orientation towards other then clothing | | | | As a result of various initiatives taken by the |
| segments of textile sector, which is commonly called | | | | government, there has been new investment of |
| as technical textiles. It is moving vertically with an | | | | Rs.50,000 crore in the textile industry in the last five |
| average growing rate of nearly two times of textiles | | | | years. Nine textile majors invested Rs.2,600 crore and |
| for clothing applications and now account for more | | | | plan to invest another Rs.6,400 crore. Further, India's |
| than half of the total textile output. The processes in | | | | cotton production increased by 57% over the last |
| making technical textiles require costly machinery and | | | | five years; and 3 million additional spindles and 30,000 |
| skilled workers. | | | | shuttle-less looms were installed. |
| The application that comes under technical textiles | | | | Forecast till 2010 for textiles by the government |
| are filtration, bed sheets and abrasive materials, | | | | along with the industry and Export Promotion Councils |
| healthcare upholstery and furniture, blood-absorbing | | | | is to attain double the GDP, and the export is likely |
| materials and thermal protection, adhesive tape, | | | | attain $85bn. The industry is anticipated to generate |
| seatbelts, and other specialized application and | | | | 12mn new jobs in various sectors. |
| products. | | | | How to uphold textile Industry |
| Strengths | | | | Weak infrastructure may be a hindrance which can |
| . India enjoys benefit of having plentiful resources of | | | | be overcome with better network and with the |
| raw materials. It is one of the largest producers of | | | | willingness to share profit by loyalty bottom up and |
| cotton yarn around the globe, and also there are | | | | patronization from above downwards. |
| good resources of fibres like polyester, silk, viscose | | | | . By putting more retail outlets, |
| etc... | | | | . With better value added products, |
| . There is wide range of cotton fibre available, and | | | | . By taking the lowest end of the chain into |
| has a rapidly developing synthetic fibre industry. | | | | confidence and building their capability to innovate |
| . India has great competitiveness in spinning sector | | | | more and more. |
| and has presence in almost all processes of the value | | | | . By upholding the market knowledge at every level |
| chain. | | | | that happens at higher-end that lifts the chain. |
| . Availability of highly trained manpower in both, | | | | . By building on the expertise for technical textiles |
| management and technical. The country has a huge | | | | that include bed sheets; filtration and abrasive |
| advantage due to lower wage rates. Because of low | | | | materials; furniture and healthcare upholstery; thermal |
| labor rates the manufacturing cost in textile | | | | protection and blood-absorbing materials; seatbelts; |
| automatically comes down to very reasonable rates. | | | | adhesive tape, etc which need skilled workers who |
| . The installed capacity of spindles in India contributes | | | | are not easy to find in an Indian market. |
| for 24% share of the world, and it is one of the | | | | . By keeping a regular research and development |
| biggest exporters of yarns in the global market. | | | | department with regards to the industry |
| Having modern functions and favorable fiscal policies, | | | | . By building up the peripheral market with regular |
| it accounts about 25% of the world trade in cotton | | | | update of new accessories. |
| yarn. | | | | . By integrating the disorganized sectors into one |
| . The apparel industry is largest foreign exchange | | | | segment that is functionally independent of each |
| earning sector, contributing 12% of the country's | | | | other's unwanted stranglehold |
| total exports. | | | | . By putting affiliated efforts into the sector |
| . The garment industry is very diverse in size, | | | | . By creating a state owned cargo-shipping |
| manufacturing facility, type of apparel produced, | | | | mechanism : with rationalizing fiscal duties; upgrading |
| quantity and quality of output, cost, requirement for | | | | technology through the Technology Up-gradation |
| fabric etc. It comprises suppliers of ready-made | | | | Fund Scheme (TUFS); |
| garments for both, domestic or export markets. | | | | . By setting up of Apparel Parks |
| Weakness | | | | . By clearing off bottlenecks in the form of regulatory |
| Massive Fragmentation: | | | | practices |
| A major loop-hole in Indian textile industry is its huge | | | | . By replacing the indirect taxes with a single |
| fragmentation in industry structure, which is led by | | | | nationwide VAT |
| small scale companies. Despite the government | | | | . With liberalization of contract norms for textile and |
| policies, which made this deformation, have been | | | | garments units |
| gradually removed now, but their impact will be seen | | | | . By controlling export of raw materials |
| for some time more. Since most of the companies | | | | . By curtailing the drawback claims falsely boosted |
| are small in size, the examples of industry leadership | | | | invoice value of exports |
| are very few, which can be inspirational model for | | | | . By effectively installing a price discovery mechanism |
| the rest of the industry. | | | | to track market trend to take effective measures |
| The industry veterans portrays the present | | | | before hand a slump |
| productivity of factories at half to as low as | | | | How to promote textile exports |
| one-third of levels, which might be attained. In many | | | | For promotion of exports the measures which should |
| cases, smaller companies do not have the fiscal | | | | be taken up are |
| resources to enhance technology or invest in the | | | | . Up gradation of textiles sector |
| high-end engineering of processes. The skilled labor is | | | | . Policy level decision to achieve export target |
| cheap in absolute terms; however, most of this | | | | . Woven segment of readymade garment sector and |
| benefit is lost by small companies. | | | | knitwear have been de-reserved |
| The uneven supply base also leads barriers in | | | | . Technology Up-gradation Fund Scheme to be |
| attaining integration between the links in supply chain. | | | | pursued till next five years |
| This issue creates uncontrollable, unreliable and | | | | . Liberalization of FDI Policy with up to 100 per cent |
| inconsistent performance. | | | | foreign equity participation |
| Political and Government Diversity: | | | | . Import of capital goods at 5% concession rate of |
| The reservation of production for very small | | | | duty with appropriate export obligation under |
| companies that was imposed with an intention to | | | | Export Promotion Capital Goods (EPCG) Scheme and |
| help out small scale companies across the country, | | | | clearly laid out EXIM policy |
| led substantial fragmentation that distorted the | | | | . Advance Licensing Scheme with standard |
| competitiveness of industry. However, most of the | | | | input-output norms |
| sectors now have been de-reserved, and major | | | | . Prescribed Duty Exemption Pass Book (DEPB) |
| entrepreneurs and corporate are putting-in huge | | | | Scheme credit rates |
| amount of money in establishing big facilities or in | | | | . Duty Drawback Scheme wherein the exporters are |
| expansion of their existing plants. | | | | allowed refund of the excise and import duty loss on |
| Secondly, the foreign investment was kept out of | | | | raw materials |
| textile and apparel production. Now, the Government | | | | . Construction of Apparel International Mart by |
| has gradually eliminated these restrictions, by bringing | | | | Apparel Export Promotion Council to provide a world |
| down import duties on capital equipment, offering | | | | class facility to the apparel exporters to exhibit |
| foreign investors to set up manufacturing facilities in | | | | products and built international reputation |
| India. In recent years, India has provided a global | | | | . Setting up of quality checking laboratories |
| manufacturing platform to other multi-national | | | | . Apparel Park for Exports Scheme to invite |
| companies that manufactures other than textile | | | | international production units along with in-house |
| products; it can certainly provide a base for textiles | | | | production floors. |