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A TRAINING REPORT ON INTRODUCTION AND AN OVERVIEW OF THE GARMENT INDUSTRY A Report submitted in partial fulfillment of the requirements for

the award of the degree of BACHELOR OF BUSINESS ADMINISTRATION FROM

Submitted By: JAYDEEP KUMAR B.B.A. (SEM-V) Submitted To: THE CO-ORDINATOR

AISHWARYA COLLEGE OF EDUCATION Jodhpur (Rajasthan)

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ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide Professor Mrs. Mridula Chanda for his exemplary guidance, monitoring and constant encouragement throughout the course of this thesis. The blessing, help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark.

I also take this opportunity to express a deep sense of gratitude to BHAGA RAM, Manager, TEE ENTERPRISES, for his/her cordial support, valuable information and guidance, which helped me in completing this task through various stages.

I am obliged to staff members of TEE ENTERPRISES, for the valuable information provided by them in their respective fields. I am grateful for their cooperation during the period of my assignment.

Lastly, I thank almighty, my parents, brother, sisters and friends for their constant encouragement without which this assignment would not be possible.

Jaydeep Kumar

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INDEX
Sr. No.
1 2 3 4 5 6 7 8 9 10 11 12 13

Content
INTRODUCTION OF GARMENT INDUSTRY GLOBAL EVALUTION OF GARMENT INDUSTRY COMPANY OVERVIEW OBJECTIVE AND METHODOLOGY OF RMG COMPANY PROFILE OF READYMADE GARMENT IN IN INDIA STRUCTURE OF THE INDUSTRY FACTS AND FINDING NATURE OF OPERATION RESEARCH PROBLEMS DATA/INFORMATION COMPILED AND ANALYSIS WORKING CONDITION INTERVIEW WITH THE BRANDS/RETAILORS SCOPE OF THE RMG INDUSTRY

Page No.
1-3 4-7 8-10 11-14 15-16 17-19 20-22 22-23 23-24 25-28 29-30 31-33 34-35

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14 15 16 17 18

SWOT ANALYSIS OF THE RMG INDUSTRY CONCLUSION RECOMMENDATION ANNEXURE : ANALYSING AND INTERPRETATION BIBLIOGRAPHY

36-40 41-42 43-44 45-49 50

Introduction
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India is the worlds second largest producer of textiles and garments after China.

It is the worlds third largest producer of cottonafter China and the USAand the second largest cotton consumer after China. The Indian textile industry is as diverse and complex as country itself and it combines with equal equanimity this immense diversity into a cohesive whole. The fundamental strength of this industry flows from its strong production base of wide range of fibres / yarns from natural fibers like cotton, jute, silk and wool to synthetic /man-made fibres like polyester, viscose, nylon and acrylic. The growth pattern of the Indian textile industry in the last decade has been considerably more than the previous decades, primarily on account of liberalization of trade and economic policies initiated by the Government in the 1990s. In producer-driven value chains, large, usually transnational, manufacturers play the central roles in coordinating production networks. This is typical of capital- and technology-intensive industries such as automobiles, aircraft, computers, semiconductors and heavy machinery.

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Buyer-driven value chains are those in which large retailers, marketers and branded manufacturers play the pivotal roles in setting up decentralized production networks in a variety of exporting countries, typically located in developing countries. This pattern of trade-led industrialization has become common in labour-intensive, consumer-goods industries such as garments, footwear, toys, handicrafts and consumer electronics. Large manufacturers control the producer-driven value chains at the point of production, while marketers and merchandisers exercise the main leverage in buyerdriven value chains at the design and retail stages. Apparel is an ideal industry for examining the dynamics of buyer-driven value chains. The relative ease of setting up clothing companies, coupled with the prevalence of developed-country protectionism in this sector, has led to an unparalleled diversity of garment exporters in the third world. Apparel is an ideal industry for examining the dynamics of buyerdriven value chains. Key words: liberalization, Textile and Garment industry, labourintensive, Buyer-driven value chains, producer-driven value chains, protectionism, and capital and technology intensive industries

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In global capitalism, economic activity is international in scope and global in organization. Internationalization refers to the geographic spread of economic activities across national boundaries. As such, it is not a new phenomenon. It has been a prominent feature of the world economy since at least the seventeenth century when colonial powers began to carve up the world in search of raw materials and new markets. Globalization is more recent, implying functional integration between internationally dispersed activities. Industrial and commercial firms have both promoted globalization, establishing two types of international economic networks. One is producer driven and the other buyer-driven. In producer-driven value chains, large, usually transnational, manufacturers play the central roles in coordinating production networks (including their backward and forward linkages). This is typical of capital- and technology-intensive industries such as automobiles, aircraft, computers, semiconductors and heavy machinery. Buyer-driven value chains are those in which large retailers, marketers and branded manufacturers play the pivotal roles in setting up decentralized production networks in a variety of exporting countries, typically located in developing countries. This pattern of trade-led industrialization has become common in labour-intensive, consumer-goods industries such as garments, footwear, toys, handicrafts and consumer electronics. Tiered networks of third-world contractors that make finished goods for foreign buyers carry out production. Large retailers or marketers that order the goods supply the specifications.

Global Evolution of GARMENT Industry


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There were various stages - from a historical perspective - where the textile industry evolved from being a domestic small-scale industry, to the status of supremacy it currently holds.

The cottage stage was the first stage in its history where textiles were produced on a domestic basis. During this period cloth was made from materials including wool, flax and cotton. The material depended on the area where the cloth was being produced, and the time they were being made. In the later half of the medieval period in the northern parts of Europe, cotton came to be regarded as an imported fibre. During the later phases of the 16th century cotton was grown in the warmer climes of America and Asia. When the Romans ruled, wool, leather and linen were the materials used for making clothing in Europe, while flax was the primary material used in the northern parts of Europe.

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New innovations in clothing production, manufacture and design came during the Industrial Revolution - the new wheels, looms, and spinning processes changed clothing manufacture forever. The rag trade, as it is referred to in the UK and Australia is the manufacture, trade and distribution of textiles.

Innovation and technology


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Clothing industry is known with fashion and fashion is beautiful combination of fabric and innovative designs. Clothing industry is highly fashion driven in western world and most of the innovative designing takes place in foreign land done by fashion designers of foreign buyers. Production takes place in Asian countries like India and China. Indian garment industry is not very technologically advanced. Evidences show that very limited investment is done in technology up gradation to improve productivity and product quality. It is still skill driven.

Skills
In times of cut throat competition continuous up gradation of skills if also must along with modernization of plant and machinery. Along with modernization there arises need for skilled workers to run the hitech machines efficiently, understand the modern production processes. Thus skill requirement increases with technological up gradation. In hosiery industry scenario, for want of availability of skilled laborer in adequate quantity, many firms in industry are hesitant to expand their scale of operations or enter into hi-end segment with cutting edge technology ( 2009).

Nature of skill gap in garment industry:


Skill gap can be defined the gap between required level of knowledge and skill to do a particular activity and the existing level of

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knowledge and skill to accomplish the work. Alternatively it can also be identified by the gap in the demand and supply of skilled workers at the existing wage rate in a unit. Skill gap may be at varying levels in different sort of activities in a garment unit. Further skill gap can be found at different hierarchical levels of an organization, example at operative level, supervisory level, middle management level, and senior management level. So remove the skill gap at various levels, different strategies should be adopted.

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AN OVERVIEW OF THE TEE ENTERPRISES

Tee Enterprise is the well established enterprise located near 15, Ashish Industrial estate, Ground Floor, Gokhale road (S), Dadar(W), Mumbai dealing in various types of men casual shirts and trousers. The casual wear brand from the house of Tee enterprises is sure to emerge as an instant hit with Young India. Trendy casual shirts and innovatively designed jeans including fashionable washed denims in appealing fits aptly make up the range.

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Taleta formal Shirtts Fashion and style in bottom wear takes a whole new dimension when denim styling and chinos fabrics come in unison. Casual shirts, a range of highly stylized cotton trousers offers you a new range of clothing for the youth.

Casual shirts

A basket of fashionable casual shirts catering to the fashion oriented youth who care for nothing but the best in clothing. Taleta casual shirts offers you the best of the international styling at affordable pricing.

Taleta
It offers you a range of shirts guaranteed to start a cult with its styling and washes. Coronated with trendy accessories in imported metal, leather and embroideries, these pieces of art come in variety of the latest in vogue washes.

TEE ENTERPRISES is a leading player in the fabric and readymade garments market. Over the years, it has successfully established its

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footprint across a wide spectrum of categories from fabrics to trendy casual wear, semi-formal and formal wear to finely crafted Premium wear. Tees credentials are both an achievement and a pointer to excellent prospects for the future. Tees financial strength tremendous Corporate goodwill is the envy of many a company. the largest manufacturer of blended fabrics in India. Tee is Creator and Owner of leading brands of textiles and garments. the and It is the

With a best in class and sophisticated manufacturing facility, vertically integrated from yarn to garments. This enables it to benchmark products and quality to international standards, giving it a strong competitive advantage. Years of experience and domain knowledge gives Tees an edge when it comes to understanding the consumer and the market. Tees well established and dynamic sales and distribution network gives it ample muscle in the marketplace. Tee Enterprises has professionally managed woven/knitted garment manufacturers in India, which has got a high technical caliber in both woven and knitwear, offering men, women and children garments and outerwear. Tee Enterprise takes a lot of care in ensuring all its manufacturing units are socially & technically conformed to requirements of its clients. Over the period, our manufacturing units have been audited by various agencies/NGOs. Its factories are SA-8000, WRAP certified, which make it a socially aware organization. Apart from fresh orders, we are also dealing with left over stocks available in the market in both woven and knitted garments

Objectives
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Following are the specific objectives1 (1) To understand the problems and prospects of Ready made Garment industry in the context of employment. 2 3 (2) To understand the skill requirements of the industry to equip workers for upgrading their employability potential as the industry performance improves. 4 5 (3) To understand the living conditions of the labour force in the centre, their lifestyles, needs and aspirations and attitudes towards forming organisations. 6 7 (4) To provide opportunities to the labour force in the area for capacity building and improving their employment potential, better their quality of life, and encourage them for forming their organisations for addressing to the common goals of attaining better and secured living. (5) To carry on garment business anywhere in India and/or elsewhere the business of drappers and dealers in cloth of all types and every description to act as tailors. (6) All types of readymade garments all dresses made up of natural synthetic or blended textile of all types and of every description. (7) Cutters and outfitters makers and supply of cloth garments and every kind and description.

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Reasons for Indias recent sluggish export performance in textiles and clothing include:
1. Slowdown in demand from some major importers. 2. The depreciation of the US dollar, resulting in an appreciation of the rupee vis-vis competitor countries that were partially or wholly pegged to the US dollar.
3. Labour laws and scale economics:

Countries like China have historically had high labour flexibility in their export oriented units. This has allowed them to achieve large scale in terms of labour force employed in each manufacturing facility and reap the benefit of scale economies and use the latest advanced machinery from developed countries. India, in contrast, because of fragmentation of units and small scale (to avoid labour laws applicable to employees above 100 and procedural biases and rigidities), has purchased relatively less of such advanced machinery. 4. Logistical delays and costs: though the national highways are improving, this is not true of connectivity to all sources and destinations. The turn around time in major ports of India and movement of cargo between ships and source or destination within India is still plagued by monopolistic bureaucratic structures with little accountability and
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incentives for efficient service delivery to the exporter and importer. 5. High cost of power in India this is 1.5-2 times higher then in competing nations.

Methodology
The exploratory research which was conducted to understand the characteristics of the labour market in the selected RMG centres is based on the sample surveys in the two centres.

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There were two sets of samples, from Tirupur and Bangalore. 1 2 3 a) The preliminary step was to get the views on the industry from all stakeholders, and to get their ideas on the kind of skills that they find in short supply in their respective labour market. 4 5 In the field visits, it was observed that there were different types of associations that functioned at Tirupur and Bangalore. The data from the local industry associations formed the sampling frame for selecting the units for the research, also supported by inputs from committed local trade unionists who are in the process of organising the ready-made garment workers. A pre-tested data capture format was used for collecting information from them. 1 b) For the research on the characteristics of labour, a random sample of 146 workers in Tirupur and 96 workers in Bangalore were interviewed using an interview schedule, to elicit the following informationtheir demographic profile, socio-economic background, their knowledge regarding industry and current employment status, inclination for skill training and their possible affinity to any particular organisation. 2 3 The findings will also provide feedback as to the awareness levels of workers regarding other social issues, their attitudes towards organisations of labour for attending to their common problems and human rights, their expectations regarding such organisational activities, etc.

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Profile of Readymade Garment Industry In India


While presenting the profile of RMG sector in India, this chapter also presents profile of the target centres identified for the proposed Workers Service Centres in the project.

Profile of RMG in India


The textile industry including readymade garments occupies a unique position in the Indian economy. Its predominant presence in the Indian economy is manifested in terms of its significant contribution to the industrial production, employment generation and foreign exchange earnings.

The RMG or also called as the apparel sector is the final stage of the textile value chain and the maximum value addition takes place at this stage. In India RMG industry is fragmented and pre-dominantly in the small/scale sector. Therefore, the sector is low investment and highly labour-intensive industry.

This industry is environment friendly as it is least polluting and it could provide employment to the rural population, as this sector does not need sophisticated skill sets. The RMG industry contributes around 8 per cent of Indias exports, 7 per cent of industrial output and is the largest employment generator after agriculture. It contributes about 14% to the industrial production and about 4% to the GDP. It has immense potential for employment generation particularly in the rural and remote areas of the country on account of its close linkage with agriculture. The contribution of this industry to the gross export earnings of the country is about 37% while it adds only 1 1.5% to the gross import bill of the country. It is the only industry which is self reliant and complete in value chain i.e. from raw material to the highest value added products i.e. garments/made ups. As a corollary to this the growth and promotion of this industry has a significant influence on the overall economic development of our country. Diagnostic Study Report for Ready Made Garment Cluster, Bangalore-R. Gopinath Rao, SISI, Government of India, Bangalore Indias textile products, including handlooms and handicrafts, are exported to more than a hundred countries. However, the USA and the EU, account for about two-third of Indias textiles exports. The other major export destinations are Canada, U.A.E., Japan, Saudi Arabia, Republic of Korea, Bangladesh, Turkey, etc. In the post-quota period, India has emerged as a major sourcing destination for new buyers. As a measure of growing interest in the Indian textile and clothing sector a number of buyers have opened their sourcing/ liaison office in India. Commercially, the buoyant retailers across the world are looking for options of increasing their sourcing from the Indian markets.

Structure of The Industry


Production Units Garment production units in India are spread across the country but mainly concentrated in manufacturing clusters. The clusters are also specialized in terms (a) types of garments manufactured (either woven or knitted) and (b) variety of products produced (i.e. Mens Womens of Childrens). Major manufacturing centres (19) are Kolkata, Mumbai. Tirupur, Indore, Banglaore, Chennai, Okhla, Gurgaon, Noida, Jaipur, Ludhiana, Bellary, Kanpur, Ahmedabad, Jabalpur, Salem, Erode, Madurai and Nagpur.

Number of Units-Estimated number of units in 19 centres are 33400, that account for 95% of total production of the country. Almost 92% of total units situated in the following 12 bigger centres account for 85% of total production.

Table No.1 Total Number of Units

Table No.2 Number of Units, Sizewise

FACTS AND FINDING


WHO ORGANISES THIS IN THE ENTERPRISES? The question was formulated in two espects; 1. who decide what is to be given out to subcontractors/homeworkers? 2. who organizes this in the company? The prevailing answer to the first question are that this is done by the enterprise management. In the survey the two question purposefully follow one after another and the difference in the answer indicates that the question are not misunderstood. It seems that early as the order is placed, the contractor provides further subcontracting for certain activities or under certain condition. Are there labels sewn on to clothes? Label are sewn onto clothes in almost all enterprises. This is not the case in small workshop. At the same time, there are other small firms whose only activity is sewing labels. For example there is a firm in the town of Gotse Delchev, in which about 10 workers are only sewing labels onto clothes, packaging them and dispatching the production of several workshop from neighbouring villages. It is surprising that in a big enterprises like bulfanco, labels are not always sewn. How much is work is done for the company? Just one operation, such as embroidery, or is it the entire garment? Home workers usually perform one operation only (see above). In enterprises this is different at the first level of subcontracting in bulgaria (receiving an order from abroad) and mainly in big enterprises, there are cases when the sample of the garment is provided and the entire manufacture has to be done by the enterprises cutting, sewing, trimming, ironing, packaging, and dispatching the finished product.

The enterprises itself may decide to further subcontract home workers or other enterprises to perform some of the operations. In the majority of cases, however, in medium-size and small enterprises, the fabrics are received pre-cut it is only the sewing that has to be done. the follow up operation (trimming, packaging) can also be subcontracted to home workers or firms. Are there different agents (intermediaries) /subcontractors/home workers for each new order. Or do they remain the same? There are variety of cases with intermediaries. Some enterprises, mostly the big ones, work with one intermediary for all order- usually this is a trade company that is the only one maintaining contacts with various international buyers (brilliant investors AD-Sofia for Brilliant AD Sofia and Plovdiv, contex Druzhba Ltd.- Sofia for Druzhba Style AD Varna etc.). How many suppliers are there to a particular manufacturer? The delivery of materials and accessories are usually done by the contractors. There are some cases of delivery materials by a third party- Vida style receives orders from spain, materials from Portugal, and produces and exports for the US. It is very seldom for Bulgarian firms to deliver the materials and accessories. An interesting trend is being observed with the settling in Bulgaria of leading textiles firms. Thus a relationship can be established with garment enterprises. This is how the italian textiles company Mirogilo with 4 textile enterprises in the country has acted and has started the production of a garments collection of their own with the brand MOTIVI.

Nature of Operation
There are two types of units operating within the garment industry in India. 1
1. Manufacturers: Controlling manufacturing operation including purchase of raw materials (primarily fabric or yarn), design developments, cutting operation, folding & ironing (sometimes), packaging and marketing of products in local and international markets. These proprietorship units are closely held by the members of the family. Integrated units (very few in the industry) undertake other operations like knitting (for knit garments) stitching, fixing of accessories and dyeing too.
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2. Jobbers: 1 Involved in knitting, stitching, embroidery, accessory fixing, ironing, processing etc. There is, however, few number of cut to-pack jobbers operating in the industry. They obtain orders from the manufacturers supply and work on piece rate basis. However, sometimes even manufacturers undertake jobbing operation after obtaining fabric and designs from the buyers in order to ensure optimal utilization of capacities.

Activity wise classification of units


1
2

Knitting- mainly jobbers Cutting-Majority are manufacturers Cutting & Stitching-are manufacturers as well as jobbers Stitching- majority are jobbers Embroidery- majority are jobbers Accessory Fixing /finishing largely jobbers

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Dyeing-majority are jobbers Packing- mainly manufacturers

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Most of the manufacturers outsource a major part (around 60%) of their production process to the jobbers due to cheap labour.

Research Problems
Challenges for the Industry Labour supply
Garment industry depends on migrant labourers. Labour comes from UP and Bihar. However, large clusters like Tirupur, Kolkata, Chennai etc. depend upon local labour force, from nearby villages, due to easy availability. There is greater tendency to employ contractual labour rather than permanent labour. The wages paid are as per the prevailing minimum wages standards. The average reported wage rate is Rs.4000 per month for the labour. One of the major problems faced by the industry is huge shortage of appropriately trained manpower.

Fragmentation the key problem


According to industry associations, the garment industry in India has not grown to its potential and the main reason for this is the fragmented structure of the industry. Smaller sizes of the production units has led to several drawbacks for the industry such as1 Uncompetitive scale in globalized environment 2 Low technological development

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Lower production High raw material cost

Due all these the local clothing industry is failing to perform up to the world-class standards, despite its high potential for growth. To mitigate these challenges the domestic clothing industry needs to be well equipped with modern technology, specialized skilled workers, and quick adoption to changes with new trends which only can place if there is greater consolidation. The Government Policy is also responsible for fragmentation to a great extent. To illustrate, Woven garment sector was reserved for SSI sector till The quota policy which prevailed during the quota regime also did not encourage consolidation of the units. 1 Exemption of excise duty for units having turnover less than Rs.4 crores is equally responsible for fragmentation.

Data/information Compiled and Analysis


This chapter presents the findings of the two sample surveys conducted in Mumbai, followed by summaries of interviews/meetings with industry stakeholders. A summary of the responses received from some global brands, is also given, which throws light on the expectations from the global players regarding the RMG industry in India. Mumbai-Sample Survey of Workers A total of 146 workers were interviewed in Mumbai, using an interview schedule. The main features revealed in the analysis are as follows.

Table No. 1 : Gender


Response N.R. Male Female Total Frequency 2 99 47 148 Percent 1.4 66.9 31.8 100.0

GenderAs has been noted in other studies, in Mumbai there is a larger proportion of men in the RMG workforce. More than two-thirds (66.9%) of the respondents were male. In Mumbai, tailors and cutters are mostly male, contrarily to for example the Bangalore situation. In general, the garment industry in Mumbai is less feminished than elsewhere. (Table 1)

Table No. 2: Age


Age in years Below 25 26-40 41-50 Total Frequency 87 45 16 148 Percent 58.8 30.4 10.8 100.0

AgeIt is interesting to note that 58.8%,i.e almost two-thirds of the sample were below 25 years of age, while 30.4%were between 2640. About 10.8% were between 41-50 years. It was also observed that it was the girls who were dominant in the younger age-group. (Table 2)

Marital StatusIt seems almost a natural consequence of the young workers that 62.8% of the respondents were unmarried, while 37.2% were married. During interviews, the girls often stated that they plan to leave the job after marriage, and not certain that they would wish to continue working. (Table 3)

Table No. 3: Marital Status


Marital status Frequency Percent Married 55 37.2 Unmarried 93 62.8 Total 148 100.0

Table No. 4 : Number of Family Members

Actual Nos. 1 2 3 4 5 6 Total

Frequency 3 14 74 37 17 3 148

Percent 2.0 9.5 50.0 25.0 11.5 2.0 100.0

Table No. 5 : Earning Members


Actual Nos. Frequency Percent None 1 2 3 4 Total 76 56 12 1 3 148 51.4 37.8 8.1 .7 2.0 100.0

Family size and Earning MembersAverage family size was 3-4, as 50% stated to have 3 members in family, while 25% had 4 members. 51.4% did not have any earning members in their families, while 37.8% had one earning family member which helped them live a fairly decent life in the city. (Table 4 and 5)

Table No. 6 : Years of Service


Years Frequenc y Below 1 1 1 35 2 38 3 49 4 12 5 2 6 8 7 3 Total 148 Percent .7 23.6 25.7 33.1 8.1 1.4 5.4 2.0 100.0

Years of Service82.4% of the sample had worked 1-3 years on the present job.23.6% had worked for one year,25.7% for 2 years, and 33.1% for 3 years.7 years were the maximum number of years worked. ( Table 6)

Total ExperienceThough there were respondents who had total work experience of 10-20 years, they constituted just 4.8% of the sample. The major part of the sample, 45.3% had total experience of 2-3 years and 27.7% had experience upto one year only. This is not surprising, in view of the fact that almost 2/3rds of the sample were below 25 years.

Working Conditions
Hours of work-

Only 16.9% reported 8 hours of work, and 22.3% said they worked for 9 hours. Half the sample said they worked for 11-12 hours every day. However, they had no complaints about working more hours, as they were paid overtime rate for working above 8 hours.39.9 % worked in shifts.Therefore,41.9 % said they voluntarily worked overtime, as overtime rate was double, as reported by 33.1%. 39.9% had

weekly off, while 57.4% did not. This was as they were on contract or temporary, hence they did not take off during their contract period.

Percentages of respondents who reported other facilities were as followstoilet(98%),drinking water(100%),washing facilities(87.2%),rest room(88.5%),crches(73%),lunch room(98%),work breaks(100%). Almost 98% of workers reported that their factory managements had a health and Safety Committee and safety officer, though they did not perceive any serious safety hazard in their workplaces. About 40.5% said that their managements had set up Committee for preventing sexual harassment in their workplaces, with a woman heading the committee. However,91.2% of them said that they had not perceived any case of sexual harassment that needed action by the committee, though one respondent reported being harassed at work by her supervisor. She too did not envisage taking any action to redress her complaint, and said that she reported to her supervisor, who handled it discreetly. Most workers appeared to have cordial working relationship with their immediate supervisors.

TrainingThough 26.4% said they did not have any training at workplace, and 38.5% did not respond at all, 35.1% reported to have received training at their workplace. Besides,91.2% were aware of training facilities available in the city. Table 15)

Table No. 1: Training Answer Frequenc y N.R. 57 Yes 52 No 39 Total 148 Percent 38.5 35.1 26.4 100.0

However, during interviews they mentioned that they had neither the extra money to pay for the training, nor the time to take break from work, as all these courses were held during the day time. There were extremely rare cases where the employer sponsored the courses and were gracious enough to allow the worker to take a break for the required skill training.

INTRVIEWS WITH THE BRANDS/RETAILORS


Eight global brands responded to a questionnaire sent to them. They responded on their experiences in ensuring compliances on labour standards among their suppliers in India. Though this was collected for a separate study on contract labour in RMG industry, also conducted by the AILS, it was felt that it would provide interesting inputs to understand the overall working of the industry as it has evolved in the present set-up. Some relevant portions are reproduced here. Positive changes in the working places of suppliers, as a result of compliance standards being enforced1 2 3 a. Wages/salaries 4 b. Hours of work 5 c. Work place condition 6 d. Application and adoption of legislations 7 e. Overtime/shifts 8 f. Absenteeism 9 g. Labour Turnover 10 h. Protection of workers rights. 11 i. Contract workers All the brand retailers stated that there is a positive change at ground level due to awareness created by multiple stake holders including the Brands. Initially they found that many suppliers did not have the basic requirements as time but eventually the BSCI standard can be reached by all suppliers and their sub-contractors. 1 2 3 4

5 6 7 8 9 a. Minimum Wages are guaranteed with timely and transparent payment procedures. Wages at a minimum wage level is a first request and has to be met. However they still find some suppliers who do not meet this level and need to upgrade. 10 b. Most retailers opined that working hours are very much controlled and mostly within allowed limits. However, they were also aware that hours of work / overtime / shifts is a difficult subject to improve, and they have many suppliers where workers work more than 60 hr/week. They are also aware of the link between buying practices and working time, but admitted that they do not actively work with that principle yet. 11 c. Basic health and safety conditions are improved in a big way. Work places conditions are often a problem found during audits, but also get improved on a big scale. Improved worksite safety, especially fire safety, machine safety, d. Legislation being adopted more readily and suppliers are mostly in compliance with all applicable laws. Application & adoption of legislation is a general issue in all producing countries, this is why even BSCI audit results show non-compliances. This is not something we can change as a retailer. 12 13 e. Due to control on working hours, overtime work is also controlled and shift culture has started. Reduction in overtime if was excessive, and improved systems giving workers right to decline is observed. Increased attention is being paid to ensure better work hours management. 14 first aid, exits, etc. are observed. 15 16 f. Absenteeism is still a challenge but has improved over the years. So also labour turnover which has also improved over the years. The BSCI does not specifically look at labour turnover; however, it might be noticed during an audit and written down in the audit report.

One retailer reported observing reduction in worker turnover but has not yet seen documented evidence in India g. Workers have become aware and they are aware of their rights and privileges. 1 2 Workers rights definitely get improved in many companies, especially after the CAP advises the management how to proceed. 3 However, this is a difficult issue to really convince the management. Better protection of rights given workers have contracts if did not have before or more legally compliant contracts. 4 Increased worker awareness of rights from posting of ETP, local law, and worker awareness built in interviews (and hope in trainings in future).

Scope
The Garment Industry at the Global and Regional Level
A serious restricting started in the late 1960s in the global garment industry. The growth in the product prices and above all the labour price in the developed countries forced a number of firms to relocate their production through subcontracting contracts.

The distribution of labour-intensive garment introduction on world scale depends primarily on the labour price. Which is the most variable and geographically depends parts of production costs. In 1990s some changes took place also in the European economic environment. The integration of Western European nations was enhanced in view of creating a single European market. Three factors determine the world tendencies in the garment industry: the exacerbated competition. Trade liberalization, and the newly emerging transforming economics of the eastern European countries. This industry is internationalized and depends on subcontracting contracts. At the same time it is characterized also by one of the lowest levels of the remuneration, a low share of labour in the end product price, high labour-intensity and violation of labour standards. This deterioration of working condition will probably grow at the end of the period of validity of the Multi-Fibre Agreement (MFA), when there will be strong competition for satisfying the world market. Probably, the expiry of the MFA will enhance the processes through which powerful companies use international differences in the pay and the working condition to maximize their profit. 5

SWOT ANALYSIS OF THE READYMADE GARMENT INDUSTRY


Strength:
Attributes of the person or company that are helpful to achieving the objectives. 1. Abundant raw material 2. Low cost skilled labour 3. Presence across the value chain 4. Growing domestic market 5. Strong backward integration 6. Third largest cotton producer as well a the largest area under cultivation 7. Increasing presence across entire value chain 8. Cheap and skilled manpower 9. Sharp reduction in borrowing costs 10. Recent government efforts to promote the industry

Weakness:
Attributes of the person or company that are harmful to achieving the objectives 1. Fragmented industry 2. Effect of historical govt policies 3. Lower productivity and cost competitiveness 4. Tech obsolescence. Quality is not consistent 5. Caters mainly to the low-end class. 6. Low level of training. 7. The export-import policy of India changes too frequently due to which it becomes very difficult for importers to import goods. 8. Delay in delivering the goods at the right time. 9. Lack of economies of scale and advance processing capabilities.

OPPORTUNITIES: External condition that are helpful to achieving the objectives.


1. Huge demand for value added goods in all major countries. 2. Relocation from high cost economies. 3. Large and relatively untapped domestic market 4. Large Indian Expatriate community. Hence there is large demand for Indian Garments. 5. Rate of import duties is minimal. 6. Bilateral Agreements on Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to taxes on income and

capital have further opened the opportunity for higher export for the garment sector.

Threats:
External condition which could do damage to the objectives Competition in domestic market: Competition will not only increasing in international or export market but also in domestic market. With removal of cap on non export sector, large textile mills are stepping into domestic hosiery sector. For example Alok Industries Ltd - Indias largest textile mill has put up state of the art knitting plant for producing hosiery goods. In times to come, more and more textile firms are likely to enter hosiery sector to tap this market. Also, there is threat of imports of cheap hosiery products from countries like China and Bangladesh. India is already importing cheap woven garments from China. In times to come, hosiery products may be imported from China. Ecological and social awareness: In last few years developed markets have seen extensive development in the for of increased consciousness on issues such as use of polluting dyes, usage of child labor, unhealthy working conditions. This is putting pressure on industry to follow international labor and environmental laws.

Regional alliances:

Regional trading blocs plays very influential role in international trade in the form of preferential duty structure. For example Mexico having free trade agreement (FTA) with US and Canada has edge over India and China. This will continue to dominate the international trade equation even in the times to come.

Conclusions

The objective of the study was to map the socio-economic characteristics, skills, and organisational needs of the workers in two readymade garment centres, where service centres are proposed to be set up. The two target centres were Mumbai and Bangalore, where a random sample of 146 and 96 workers respectively, were interviewed using an interview schedule. Visits were also made to the industry associations, trade unions, and government training institutions in the two cities. The study shows distinct differences in the demographic profile of the two centres. In Bangalore, women were a majority, while in Mumbai; it was a 60:30 ratio of men and women. In Mumbai, the age-group was also young, and mostly below 40 years, while in Bangalore, almost all respondents were below 40. Consequently perhaps, there were more married respondents (since it was an all female sample) in the Bangalore sample as compared to Mumbai sample. On the other hand, the women in Mumbai were more educated and had secondary school education, while in Bangalore, along with educated workers, there were also illiterate workers, who were also unskilled. It must be mentioned here that all the factories where the survey was conducted, were large units that were suppliers to international brands, though they did have contract workers, as the data indicate. However, the managements always said they had all permanent workers except for security and housekeeping; what it actually meant was that they recruited the workers through contractors on a regular basis, and provided them with all benefits due to permanent workers such as provident fund, ESI, maternity benefits, etc. in efforts to retain them. As stated by Rajendra Hinduja, Managing Director of Gokaldas Exports, Bangalore, shortage of skilled labour is the most frustrating factor in our business. We send our staff to the villages in search of workers and bring them here in buses; we have opened units in rural areas, all in attempts to recruit workers and retain them.

Recommendations
1 There is a definite need for a more in-depth study on the conditions of small-scale units in RMG centres, where the true problems of workers lie. As observed in 2 3 Bangalore and Mumbai, as units consolidate and expand their scale of operations, global compliance standards compel them to adopt somewhat decent wages and working conditions. However, they try to compensate for their rise in costs through other costcutting measures, which are not observed during the third party audits that the retailers undertake. 4 5 The workers are low on awareness regarding workers rights as human rights. Service centres will do well to conduct regular awareness programmes on issues such as these. 6 7 On the other hand, they can also address the most important issue that employers complain about, i.e. work discipline among workers. Workers are quite aware of the demand for their labour during peak season, Hence, it was often seen that even as they are employed as permanent workers in one unit, when they hear (through their own information sources) of another unit looking for workers to work night shifts, they take unpaid leave from their own factory to earn extra income during the period, causing distress to their employers. Or else, they quit one company to join another that pays minimally more, and return when they are not happy, quite aware that they will be taken back, as there is always a demand for them! Such stories were quite common in both centres. 8 9 10 11 12 13 14 15

16 17 It was the irony of government training centres who stated that their courses go empty, employers need skilled workers, but the workers are not able to take training due to their work. If for instance the proposed WSCs can persuade the employers to give workers paid leave for training, perhaps the workers will be motivated to join training in special skills that fetch them more wages! 18 19 The centres can also provide the workers with other support services that make their lives easier in the city. This may include guidance / advice in the areas of family welfare, health, children education, family budgeting etc. Case studies appended in Annexure IV are illustrative of the various needs of workers which can be met through industry-specific service centres set up for them

ANNEXURE
ANALYSING AND INTERPRETATION

Q1) what you like most in Tee Enterprise?


A) Your job B) Colleagues in your department C) The Company D) Any Others

50 45 40 35 30 25 20 15 10 5 0

20% 10% 60% 10% your job colleagues the in your company department any other

Interpretation: From the above graph, we find that 20% of the employees like their job, 10% of the employees colleagues in their department, 60% of the employees like the company and 10% of the employees like any other things in the company.

Q2) I am satisfied with my departments efficiency and

productivity.
1. Strongly agree 2. Somewhat agree 3. Neutral

50 40 30 20 10 0 60% strongly agree neutral 10% 60% 30% 10%

Interpretation: From the above graph we find that 60% of the employees are satisfied with their departments efficiency and productivity, 30% are somewhat agree and 10% are neutral.

Q3) I have all the information required for performing well in my job.

1. Strongly agree 2. Somewhat agree 3. Neutral

60 50 40 30 20 10 0
ag re gr ee ne u tr al e

30% 60% 10%

st on gl

Finding: From the above graph we find that 30% of the employees have all the information required for performing well in their job, 60% are somewhat agree and 10% are neutral .

Q4) Employees in my department are aware of its operations and the contribution that they make towards the companys success.

so m

ew

ha ta

1. Strongly agree 2. Somewhat agree 3. Neutral


80 70 60 50 40 30 20 10 0 strongly somewhat agree agree neutral 65% 25% 10%

Finding: From the above graph we find that 65% are strongly agree, 25% are somewhat agree and 10% are neutral about that the employees in the department are aware of its operations and contributions that they make towards the company

Q5) Considering all the aspects, what is your level of satisfaction with the job?

1. Very satisfied 2. Satisfied 3. Somewhat satisfied

60 40 20 0 very satisfied 30% somewhat satisfied 10% 30% 60% 10%

Finding: From the above graph we find that 30% are very satisfied, 60% are satisfied and 10% are neutral for considering the level of satisfaction with the job.

BIBLIOGRAPHY

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