RESEARCH METHODOLOGY

FABRIC SOURCING FROM

DECENTRALISED SECTOR

REVIEW OF LITERATURE
DATE: 9th JANUARY, 2012

Submitted to:
Mr. Vasant Kothari
Assistant Professor
DFT
NIFT, Bangalore

Submitted By:
Agreeta
Neha Khurana
Rajshree Soni
AP - VIII

INDIAN TEXTILE MANUFACURING SECTOR

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 textile and garment industry in India is one of the oldest
manufacturing sectors in the country and is currently its largest. The textile and garment
industry fulfils a pivotal role in the Indian economy. It is a major foreign exchange earner
and, after agriculture, it is the largest employer with a total workforce of 35 mn. In 2009
textiles and garments accounted for about 16per cent of industrial production and 18 per cent
of export earnings.
The industry covers a wide range of activities. These include the production of natural raw
materials such as cotton, jute, silk and wool, as well as synthetic filament and spun yarn. In
addition an extensive range of finished products are made. The Indian textile industry
accounts for about 24 percent of the worlds spindle capacity, making it the second highest
after China, and around eight per cent of global rotor capacity. Also, it has the highest loom
capacityincluding hand loomswith a 63per cent share. India accounts for about 14per
cent of the worlds production of textile fibres and yarns. The country is the fifth largest
producer of synthetic fibre and yarn. (Devaraja, 2011, p. 6)

(www.slideshare.net, 2008)

Structure of fabric production in india 2004(Sankar, 2006)

Textiles and clothing are always the single largest foreign exchange earning source for the
country accounting for 21% of the country's total export earnings. The cotton textiles have
always been a significant source accounting for 27% of the total textiles and clothing exports
in last decade. The garments account for 46% of the total textile and clothing exports.

(Sankar, 2006)
Endowed with largest loom age in the world, the second highest spindle age, next only to
China, a strong multi-fibre raw material base, a vast pool of skilled workers, flexible
production systems, a dynamic entrepreneurship together with vibrant design creativity, have
all contributed to creating a vibrant textile industry that has long been the mainstay of the
Indian economy. The Indian textile garment industry is an enormous complex entity. There is
organized sector, decentralized sector and down the line weavers, the artisans as well as the
farmers. The spectrum of technology is wide spread right from handmade to semi
mechanical, mechanical and highly sophisticated information based technology and
microprocessor based technology.
The number of units involved in knitting and crocheting activity is estimated at 23362,
which include 13827 OAME units. A significant proportion i.e. 40.9 per cent of knitting
and crocheting units are running without the aid of power. The estimated output in knitted

and crocheted products is estimated at Rs 3273 crore. (Bedi, 2009)

The number of power operated weaving and knitting units (powerloom, hosiery and mill)
producing cotton and synthetic products is estimated at 5.09 lakh during 2005-06. These
units include even those weaving units in which weaving activity is not one of the major
activities. Around 54.1 per cent of these units are belonging to non-factory sector. This
includes a large share of OMAE accounting for 74.35 per cent of the total powerloom
units. NDME units account for 11.67 per cent and DME 8.19 per cent. There were around
5.04 per cent units belonging to small and medium sector range. The share of medium
sector is very negligible and accounts for 0.29 per cent. The large unit accounts for 0.45
per cent. (Bedi, 2009)
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. In fact, apart from China, no other country
can boast of such strong and diverse base in textile fibres / yarns. The complex and varied
structure of coupled with its close linkage with culture and multifibre raw material base
enables it to produce variety of products for varying consumer needs and preferences.
India is:
The largest producer of jute in the world
The second largest producer of silk
The third largest in cotton and second largest in cellulosic fibres
The fifth largest in synthetic fibres / yarn
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. Fiscal duty structure of the textile industry
has also influenced to a great extent the growth and the structure of the industry. Historically
the fiscal policies concerning textile industry have always considered small is beautiful and
consequence is reflected in structural anomalies and concentration of downstream segments
of the industry in the decentralized sector and decimation of the organized sector. (Devaraja,
2011, pp. 6-7)

The textile value chain extends from raw material, i.e., fibres to finished products, i.e.,
clothing and made-ups, with spinning, weaving, knitting and processing coming in between
as intermediate processes. The structural pyramid of Indian textile industry is inverse in terms
of strength. Fibre manufacturing and spinning processes is strong while weaving and
processing are relatively weak segments. However, in the recent past, there has been
intensive activity in terms of technological up gradation of entire value chain of the textile
activity. Morethan US$ 7.50 billion of investment has taken place in this industry for capacity
expansion and modernization during the last about five years. A sort of silent revolution has
been taking place, which thus manifested itself in increase in production during the current
year.

(Nords, 2004)
Apparel value supply chain
Though the Indian textile industry uses all kind of fibres / yarn, it continues to be
predominantly cotton based. The consumption of cotton fibre vis--vis other fibres / yarn in
India is 54: 46, while the global consumption of fibres / yarn is 40:60 in favour of non-cotton
fibres / yarn. However, in India also the consumption of manmade fibre / yarn is increasing
very fast and expected to reach the world level in near future. During 2008- 09 the production
cotton was to be 309 lakh bales. The quality of cotton has also improved considerably over a
period of time. The improvement in quantity and quality of cotton has been contributed to a
great extent by the Cotton Technology Mission (TMC), which was launched by Govt. during
1999. As on March 31, 2007 activation of market yard, improvements of market yard and
new market yards with project cost of Rs. 35,728.17 lakhs have been sanctioned.
Other major fibres/yarns used by the textile industry are man-made fibres /yarns. The manmade fibres/ yarns industry, particularly the polyester segment, has achieved significant
growth during the last two decades. The installed capacity increased from 223 million kgs in

80-81 to 4218 million Kgs. in 2009. The production of this industry increased from 188
million kgs during the year 80-81 to 3987 million kg during the year 2008-2009, out of which
1901 million kgs is contributed by polyester segment alone. The sharp increase in production
of polyester fibre and yarn has made India emerge as the fifth largest producer of man-made
fibre/filament yarn in the world.
Other fibres used by the textile industry are wool, silk and jute. Wool is the only fibre the
production of which is deficient in the country. India produces about 52 million kgs of raw
wool out of which only 5 million kg. is of average apparel grade and remaining 40 million kg
is of carpet grade wool and other coarse wool. The worsted woolen sector, therefore, entirely
depends on import of raw wool for meeting its raw material requirements. Even the export
oriented carpet industry depends on New Zealand wool for blending to obtain the desired
lustre in the carpets.
India is second largest producer of silk with annual production in the range of 16 million kg.
However, India has the unique distinction of being endowed by nature with the all four
varieties of silk, viz., mulberry, tusar, eri and muga. The environmental considerations
assuming importance have created new opportunities for jute, which is biodegradable,
renewable and eco-friendly. What has happened over the years is that it has been traditionally
associated with low value addition and utilization in terms of sacking and packing material.
However, recently efforts are being made to diversify this sector into newer areas particularly
geo-textiles. Textile industry has also started using jute in blends with other fibre for apparel
usage.
The growth in the production of textile fibres has facilitated the growth of the spinning sector.
Industrial delicensing and liberalization policies coupled with freedom from unfair
competition from unorganized sector accelerated the process of setting up of spinning units in
the organized sector after 1990s. By the end of March 2009, 2180 spinning units are
functioning in the organized sector. In the late 90s, SSI spinning units have also sprung up
mostly in and around Tirupur. Taking spindle age in organized and small-scale sector, about
37.51 million Spindles and 6.80 lakh rotors are functioning in the country by the end of
march 2009. The significant feature of the spinning industry is that about 92 percent of the
yarn is produced in the organized sector, while only eight percent is produced in the smallscale sector. Technology-wise also spinning industry is reasonably modernized particularly by
taking advantage of Textile Modernization Fund Scheme (TMFS) which was in vague during

seventh plan. The spinning industry is also the largest beneficiary under Technology
Upgradation Fund Scheme (TUFS) The projects worth Rs.15,032 crore have been sanctioned
under the scheme. Many compact yarn spinning units are also coming up under TUFS.
The growth in spinning capacity, the production of cotton, blended and 100 percent non
cotton yarn has also gradually increased and during the year 2008-09 it was provisionally
estimated at 2498, 575, 348 million kgs respectively. India, today is one of the largest
producer / exporter of cotton yarn.
Weaving activity, in which India was lagging behind for a very long period has also taken a
quantum jump as far as quality, is concerned during the recent period. In the last three years,
more than 31,000 shutters less looms have been installed. Further by taking advantage of 20
per cent capital subsidy scheme under TUFS, weaving and weaving preparatory activities are
being upgraded by the power loom sector.
At the time of independence, mill sector was producing 75 per cent of the total cloth
production. However, subsequently restrictions were imposed in the installation of weaving
capacity of the mill sector. Therefore, the weaving capacity of the organized mill sector
stagnated for a number of years. Even after the removal of the restrictions in 1985, the
capacity of the organized mill sector, which had by then lost its competitive edge, has been
consistently declining. Thus, between 1985 and 2009, the weaving capacity has declined from
3.59 lakh to 0.92 lakh looms a decline of more than 50 percent. However, there is
discernible, though hazy, trend of revival of composite mills.
Composite segment is the second largest beneficiary under TUFS. Projects worth Rs. 3873.69
crore by the end of March 2008 have been sanctioned under the scheme. It is expected that as
TMFS launched during the seventh plan has modernized the spinning industry enabling the
country to become the largest exporter of cotton yarn, the TUFS will strengthen the
technology of the weaving sector.
The power loom sector has been expanding steadily. The number of power looms has
increased from 15.99 lakh in 1998-99 to more than 22 lakh by the end of year 2009. Further,
the technology level of power loom sector, which used to be very low, has started improving.
The Governments efforts are in progress to formulate the schemes to accelerate the
modernization process of power loom sector. Cluster Development programmes in the
identified clusters of power loom have also been initiated by the Government organizations.

The power loom associations are also activating themselves to create the awareness about the
need for all-round development of the power loom sector enabling it to face successfully the
challenges of globalised economy. (Devaraja, 2011, pp. 8-9)

Sector-wise Anaylsis of Clusters (Bedi, 2009)

In the present study, we have covered some of the major powerloom clusters in 13 states. It
was found that most of the units covered in the sample across states are either small
sized or medium sized units because of their dominance. As regards labour requirement,
powerlooms are not as labour intensive as handloom. As the scale of operations
increases, labour requirement per loom decreases drastically. The level of modernization of
looms varies across the clusters and this is a major factor affecting the productivity of
looms and the quality of fabric produced by the looms. Condition of dying and processing
in many clusters is in a very bad state due to redundant dying and bleaching techniques,
inadequate technology upgradation, poor yarn quality testing facilities, poor quality of water,
inadequate water supply, etc.
In hosiery sector, Tirupur and Ludhiana are the leading knitted fabric making clusters. In
this study Tirupur, Ludhiana and Kanpur clusters have been covered. In Tirupur, most of
knitting takes

place

in

modern

circular

knitting

machines.

Kanpur

cluster

is

comparatively less modernized as compared to other two clusters.

(Tirupur Players Lead By Example, 2009)
Bhilwara today is the biggest PV dyed blended suiting manufacturing hub in the world,
having 500 units in 12,500 looms.
(Bhilwara The Biggest Hub for PV Fabric, 2009)

PRESENT POLICY RELATING

TO

INSTALLATION

OF POWERLOOMS

(Unknown, Sourcing Apparel Apparel Industry Indian Textile Powerlooms Sector)

In terms of Textile (Development & Regulation) Order, 1993, every person on installing the
powerlooms in the SSI sector should submit an Information Memorandum in a prescribed
form to an officer, notified in this behalf by the State Government within whose territory the
powerloom has been installed, with a copy thereof to the Textile Commissioner, Mumbai, and
every person on installing any powerloom in non-SSI (other than units requiring Industrial

Licences), should file an Information Memorandum to the Textile Commissioner, Mumbai,

within 30 days of installation for obtaining an acknowledgement thereof.

POWERLOOM SERVICE CENTRES

There are 13 Powerloom Service Centres (PSCs) functioning under the O/o the Textile
Commissioner and 29 PSCs functioning under the different Textile Research Associations
(TRAs) namely ATIRA, BTRA, MANTRA, NITRA, SASMIRA, IJIRA & SITRA. One PSC
at Hyderabad is also established under the administrative control of State Govt. of Andhra
Pradesh w.e.f. 6/3/99 and another at Jabalpur under the aegis of the Govt. of Madhya Pradesh
which has started functioning from 15th June, 2000. (Unknown, Sourcing Apparel
Apparel Industry Indian Textile Powerlooms Sector)

PERFORMANCE OF POWERLOOM SERVICE CENTRES

During the year 1999-2000, the 13 PSCs run by the Office of the Textile Commissioner,
trained 1091 persons, developed 806 new designs and tested 5542 samples. They have also
organized 50 number of exhibition, seminars and workshops. Other 31 PSCs, viz. 29 PSCs
run by TRAs and 2 PSCs run by State Agencies have trained 972 persons, developed 2081
designs including new designs on CAD systems and tested 44102 samples. They have also
organized total 100 exhibition/ seminars/workshops. (Unknown, Sourcing Apparel
Apparel Industry Indian Textile Powerlooms Sector)
MODERNISATION AND STRENGTHENING OF EXISTING PSCs
The powerlooms in the PSCs are very old and outdated. The looms and equipments in the
PSCs and the machinery existing in the industry in the area do not match. In such
circumstances it becomes very difficult to attract people from that area for training. Taking
into consideration the ground realities, the expectations of the powerloom industry and the
need for the thrust on technological upgradation in the industry, the modernisation and
strengthening programmes of the Powerloom Service Centres has been taken up. The
Government of India has approved the modernisation and upgradation proposal for 21 PSCs
(7 under TX.C and 14 under TRAs) during 9th Five Year Plan period with an estimated cost
of Rs. 16.09 crore, with components of assistance for capital expenditure of Rs. 12.73 crore
and for recurring expenditure of Rs. 3.36 crore. The Ministry has so far released Rs. 591.60

lakh during the last year for modernisation of loomsheds of Powerloom Service Centres. The
Implementation Committee has already been set up for the purpose of Modernisation and
Strengthening of PSCs. This process is expected to be completed during the 9th Five Year
Plan period.

Fabric production (TEXTILES AND APPAREL, 2010)

54,966 million sq m* of fabric (including khadi, wool and silk) was produced in 200809.
Fabric production in different segments (200809) in million sq m

Sources: Ministry of Textiles 200910 annual report; Textile industry overview, Ministry
of Textiles.
* Provisional estimates
WOOLLEN TEXTILES
Decentralised sector
Hosiery and knitting units
Powerloom units
Hand-made carpets and druggets units
Independent dyeing and process houses

SUPPLY CHAIN MANAGEMENT OF TEXTILES

Indian textile and clothing sectors have a tremendous potential, only a portion of which has
been exploited due to policy constraints. And where exploited, Indian entrepreneurs have
done the country proud. However, there lies a considerable potential that has not been
exploited primarily due to government policy marked by ad hocism, fragmented vision, and
political opportunism.
Value Chain Analysis
In the primary survey conducted by NCAER, it is observed that wholesalers in most of the
cases purchase fabric through agents. Direct purchase from powerloom units is relatively
much less. Next in chain is generally, small wholesalers who in then purchase from large
wholesalers. Main cause of purchasing fabric through agent is that the factory does not sell
directly to a wholesaler because the latter purchases in small quantity; the agent provides
fabric to wholesaler at factory price against a commission, which is provided by the factory.
An agent usually has contract with more than one factory. There are instances when value
addition work is undertaken by wholesalers after the purchase of fabric. On an average, it
increases the value of fabric by 34%. The traders face various challenges which include over
stocking, under stocking/ shortage in few items and surplus / both. The producers play the
major role in determining the price of fabrics, while for determining the quantity of fabrics
and its quality, the traders play the major role.
A wholesaler sells his fabric/ garment (as the case may be) either t o agent or small
wholesaler or readymade garment unit or the retailer in the market. All the large retailers
(chains) sell their products to final consumer. Some wholesalers give some discount to
readymade garment units as compared to other customers. Maximum number of
intermediaries existing between factory and final consumer are found to be five in metro
cities. This chain may vary in small town or in interior areas. Managing such a complex
supply chain requires coordination through excellent managerial practices, technology and
facilitating policies. Price of fabric generally increased with the number of intermediates in
the chain. In case of 4-5 intermediates, the price to consumer is 183- 210 percent of the exfactory price. Textile firms need to develop the managerial capabilities required to manage
large work force and design an appropriate supply chain.

(Bedi, 2009)
Product Specific Cost- Supply Chain Management
Typical cost structure of garments would have materials contributing about 55% of the cost,
while fabrication, overheads and finishing constitute 22%, 15% and 9% of the cost of
garment38. While fabrication and overheads are a result mostly of garment industrys
decentralised structure (and hence require structural reforms to rationalise), fabric cost is a
function more of the productivity at the textile manufacturing stages. In India, one big
stumbling block to higher garment productivity lies in the structure of the Indian textile
sector. With only 5% of fabric being produced in the organized mills, and about 57% being
produced in the decentralised powerlooms (over and above the 17% knit fabric), the quality
of fabric supply to the garment sector is poor39. And since garment manufacturing is
reserved for SSI in India, most of SSI units are small, catering to small order sized seasonal
demand for fashion garments in niche products. Their demand for fabric too, therefore is in
small lot, which organised mills cannot competitively produce. Besides, with the demand for
Indian garments overseas being fashion-driven, production flexibility of a high order is
required to switch from one styles/colour to another at short notices. Powerlooms again are
better suited as suppliers, compared to organised mills. (VERMA, 2002, p. 18)
1. Factor cost: Despite technological advances, clothing sector remain labour-intensive
globally, and hence its manufacturing is secularly shifting away from developed to
developing countries. Textile production has seen considerable technology
improvement, but that has only partially restored the comparative advantage of
developed countries in textile manufacture.
2.

Cost of raw material (fibre): Until recently, Indian cotton prices have been lower than
international cotton prices of comparable varieties due to ban on imports and control
on exports of cotton.

In a dynamic environment where demand is uncertain and significantly seasonal, where the
product life cycles are short, and where the competitive intensity is highcompanies that
organise for functional integration tend to outperform those that are organised for functional
excellence. Supply Chain Management indeed is all about functional integration. The Indian
textile and clothing industries have one of the longest and most complex supply chains in the
world, with as many as 15 intermediaries between the farmer and the final consumer. Each

contributes not only to lengthening of lead times, but also adding to costs. (VERMA, 2002,
p. 20)

WHERE IS THE GAP... ?

An article (Nuthall, 2011)just-style management briefing: Sourcing winners and losers in
2011 India found to be looser in 2011because of :
Rising input costs caused a lot of pain in India's clothing and textile industry in 2011. India's
largest listed retailer, Pantaloon Retail, warned in February rising costs would inflate its
fashion prices by 18% for mid-2011 and that "inflation will continue to be a permanent
reality." And to compound matters, garment manufacturers staged a two-day strike to protest
against a proposed 10% levied excise duty on branded India-made ready-to-wear garments.
In May, India's spinning mills said they would cut production by around a third to reduce
stockpiles.

(S. Manikandan, 2009)

India has huge capacity of spinning, have advanced technology and comparable quality as per
global standards, however , margins are shrinking. Weaving is unorganised and fairly large
but with old technology and quality is average. It needs to be modernized at much faster pace
in order to achieve International standards. Processing Industry is unorganised and has many
issues in terms of technology, quality and International standards. This sector needs complete
focus from Government and Industry in order to meet customer expectations. (Apte, 2011)
As quoted by Mr. Amit Janeja , Director, Techno Textile-In yarn dyed shirting there are two
categories, one is mill-made and the other is Powerloom or Autoloom sector which is in
South where the mills have gone from powerlooms to autoloom sector and the quality which
they are offering is just like millmade fabric (Apprel Online, March, 2011, p. 38)

Mr. Goldy Puri, MD, Marshal Overseas also carries a similar viewpoint adds that previously
for higher counts and constructions mills like Arvind and Ashima were main source but
nowadays there are a lot of autoloom manufacturers springing up everywhere, its not that the
powerlooms are fading out but autolooms are coming up in a big way. (Apprel Online,
March, 2011, p. 39) (Unknown, Sourcing Apparel Apparel Industry Indian Textile
Powerlooms Sector)
Mr. Goldy adds since last six years they are sourcing autolooms fabrics and if he has to
procure powerloom fabrics he prefers Salem and autoloom yarn dyes he sources from Erode.
Between Powerlooms and autolooms the choice only matters when when it comes to
Minimum order quantity (MOQ). Powerlooms are much more flexible in terms of quantity.
Autolooms demand a particular MOQ per plate whether its a stripe or a check, If it doesnot
have the quantities then they have to go to powerlooms. If one has good yardage then one has
option to make choice between powerloom/autoloom and mill made fabric. Autoloom fabrics
are closer to millmade fabrics in 40s 50s 60s counts which can even go higher upto 100s
and 200s whereas powerloom fabrics are of courser counts , but its not that finer counts
cannot be made on powerlooms. Producing finer counts on powerlooms reqire expensive
preposition when width is smaller; whereas in smaller width autolooms are more costeffective.He includes that fabric source are Arvind and Ashima from Ahemdabad and also
from some autoloom set-ups in Mumbai. Goldy shares that Quality is not an issue from
autolooms or powerloom set-ups. These days fabric manufacturers themselves are very
quality conscious for getting consistent orders.
Mr. Deendayal B. Jhanwar, MD, Ramakrishna (Jhanwar Group) says that by having their own
fabric dyeing unit will help them to have control over price along with pricing. Mill made
fabrics are much finer and innovative but then to meet buyers costing the garment
manufacturers have to evaluate and research how to get the quality and design which their
buyer wants in best price. According to Mr. Goldy Normally the buyers are not aware of the
count and constructions. Some of them go by weight and some are literate enough to
understand the counts and constructions but normally the feel and look of the fabric is
important to them along with the price. Manufacturers cannot do much about the order
placement by buyers as they are procuring yarns at the current rates and buyers are not
willing to go up on pricing after a certain level. So we are left left with no choice but to think
how to reduce our overheads and look for vertically integrated set-up to get betterpricing but

then order sizes should be good enough to get better costing, concludes Goldy (Apprel
Online, March, 2011, p. 40)

SOURCING
Centralized purchasing vs. decentralized purchasing (Li)
Centralized purchasing and decentralized purchasing is a choice many companies have to
make because very few companies employ a pure centralized purchasing strategy or a pure
decentralized purchasing strategy. Both centralized and decentralized sourcing approaches
have advantages and disadvantages. Furthermore, sourcing decisions have implication for the
control of supply chain and impact on firms overall performance.
Centralized purchasing consolidates the entire company's purchasing needs. A Purchasing
department identifies potential suppliers, negotiates contracts and implements the purchasing
plan. The advantages of centralized purchase include greater purchasing specialization,
buyers influence, and quantity discount due to large volume purchase. Increased purchasing
quantity created by combining orders also means obtaining better service, ensuring long-term
supply sources, and developing new supplier networks. The large quantity centralized
purchasing tends to have a fewer orders. The disadvantages of centralized purchasing include
losing control at the department or division level. Lead-time associated with centralized
purchasing is longer than the decentralized purchasing approach.
Decentralized purchasing gives the local business unit more power to choose the best fit of
suppliers and can effectively use local resources.
The advantages of decentralized purchasing include better understanding of user's needs and
product specifications, easier communication and coordination as well as, shorter sourcing
lead-time. The shortcomings of decentralized purchasing include the loss of quantity discount
and whole truckload freight rate.
Sourcing choices arise from the drivers of profitability: cost considerations related to
acquiring factors of production balanced against factors affecting revenue, including pricing,
marketing, and distribution. In large part, these lead private actors to weigh familiar issues of

labor, material, and shipping costs as well as costs related to tariffs and the presence of quotas
in selecting sources. However, as will be demonstrated, modern supply chain dynamics are
adding factors to this traditional list, primarily to address the damaging effects of inventory
risk (Frederick H. Abernathy, 2005, p. 9)

International brands in india increase focus on local sourcing

(Unknown, GLOBAL BRANDS... LOCAL SOURCING, 2011)
One of the key concerns for any brand prior to entering a new country is how to source
products and where to source from. Typically, any brand would follow a sourcing curve
where it initially sources products from its international supply chain and gradually works
towards establishing an Indian supply chain, says Prashant Agarwal, Jt, MD, Wazir
Advisors. Adds Devangshu Dutta, MD, Third Eyesight, Brands that would not see sourcing
locally as a viable option, are typically those whose low volumes do not justify developing
India as a sourcing base (especially for niche or specialised products), or who wish to
maintain product uniqueness.
No doubt, domestic sourcing strategy is about making premium brands more affordable for
Indian consumers, however it is not just about cost-competitive, but also shorter supply
chains and increased speed to market. Today, when everyone is talking about fast fashion and
quick response time, it is becoming imperative for these brands to develop efficient supply
chain with shorter lead times, preferably in domestic markets.
Around three years back, import duties were to the tune of 10-15%. Now they are 35-40%,
so it makes sense to source locally, says Dipak Agarwal, CFO, DLF Brands.
PARAMETERS FOR VENDORS (Joshi, 2007-2009)
The selection of the vendors for the required materials is done through some parameters.
Those are

Capacity to produce & expand

Attitude of the management ( positive, innovative, not adamant)
Basic infrastructure ( men, machines, materials)
Innovation and R & D
Long term commitment
Vendor-Factory proximity & synergy
Reputation in the industry

Lead Time: For development of Fabric: 3-4weeks

Color: 2-3 weeks. Thus the total timing being 2 months app.

COSTING OF FABRICS
FACTORS INFLUENCING COSTING OF WOVEN FABRICS (Gupta, 2009)
Costing of woven fabrics for garment manufacturers is one of the most important aspects of
garment production. About 65 70% cost of the garment is the cost of the fabric and hence, it
is very crucial to get the right cost of the fabric from fabric manufacturers and suppliers.
Buyers send specifications and the fabric has to be developed as per the design trend.
Garment manufacturers source fabrics with specific construction and characteristics in
different quantities for different end-uses. Garment manufacturers struggle to get the best
possible cost of the fabric. It would be interesting to know the important points to consider
for getting a comprehensive understanding of costing. Costing seems to be a complex
exercise as it depends on a number of variables. Costs are calculated taking into consideration
the complete production process and machinery involved.
Costs to Consider
i)

Direct Cost: Cost of raw material 66%. Cost of size and chemicals 4%.
Production cost comprising of running the machine, maintenance, power fuel,
humidification and other utilities 8% and worker wages and salaries 8% losses

ii)

incurred due to shrinkage, wastage, grading, and also selling commissions.

Indirect Cost: Interest on investment, loan, working capital, depreciation, etc.
Above 7%, overheads like travelling, telephone, couriers, legal issues, taxes

iii)

comprising of 7%.
Profit: 10 20% depending on the order size.
In some companies, 70% of the fabric cost will comprise of direct cost, but in
corporate selling only 40% cost of the fabric is direct cost and 60% is overheads.

FACTORS WHICH AFFECT THE COST

Raw Material Cost

Type of raw material

Raw material cost includes cost of fibre or yarn. The cost of the fibre will depend
largely on its generic type - cotton, linen, wool, silk, rayon, nylon, polyester, polyester
cotton blend etc, and also its quality. The Yarn cost will depend on the count of the
yarn -- finer the yarn, more expensive it will be. Carded or combed: Combed yarns
are more expensive than carded yarns as yarn realisation is only about 70% in case of
combed yarns because short fibres are removed where as in case of carded, the yarn
realisation is about 88%. Combed yarns have more lustre and strength than carded
yarns. All finer counts above 40s are generally combed yarns. Method of spinningopen-end or ring spun. Open end yarns are cheaper as the cost of manufacturing is
less. It is used for coarser yarn count below 20s.
The cost of man-made spun yarns will depend on the fineness -- finer the yarn, more
expensive it is. Number of fine filaments used in making the yarn will also affect the
cost. Bright or dull -- Bright yarns are more expensive than dull. Textured yarns are
more expensive than flat because of the additional process cost.

Amount of raw material or GSM of the fabric

Amount of raw material is reflected by the weight or GSM (grams/sq mt) of the fabric.
GSM is directly dependent on the EPI and PPI
or construction of the fabric and is inversely proportional
to the count of the yarn. Relation between GSM and cost
is a little complex. For the same variety of the fabric, as
the GSM increases the cost increases (see bar graph for
poplin and sheeting).
But when the yarn becomes very fine and there is a variation in picks per inch in the
fabric, then the cost of spinning and weaving plays a more important role than the GSM
and even when the GSM is similar, the cost of voile fabric with finer yarns and more
picks per inch is more!

Weight of the fabric is the weight of warp and weft which can be calculated by the
formula below:
Weight of warp in grams/sq mt of fabric = EPI x 0.6 /
Count of Warp = A
Weight of weft in grams/sq mt of fabric = PPI x 0.6 /
Count of Weft
GSM = A+B

Sizing and Chemicals Cost

The sizing cost depends upon the count of the yarns. The
count becomes finer the size and chemical cost increases
as a rich solution, better quality of size and chemicals is required for better strength.
One needs to add Rs 35/kg as additional cost which includes steam, power or wages. For
two plied yarn no sizing is required.

Production cost or cost of weaving process

It includes machine running cost, maintenance, labour cost, power & fuel, etc. The
weaving cost is affected by the beam size -- if the beam is small in length, the cost will be
more as beam gaiting and knotting will add to the cost.
Mill-made or powerloom made:
The quality of mill-made fabrics is better than power
loom made fabrics in terms of yarn quality; Therefore, the
cost of fabric is higher. At times it can be as high as 25%..
eg , the cost of 40s Poplin 92 x 88 can vary between Rs
22/mt and Rs 34/mt. It depends on the type of loom
whether powerloom, rapier, air-jet, dobby or jacquard and
the weave and construction.

The weaving cost is expressed as paisa /pick/inch/sq mt. The cost of weaving is different
for different weaves. The cost of weaving for rapier loom for plain weave 40" width
fabrics = 8 paisa/pick/inch/sq nmt which means that for a 120 inch width fabric the cost
will be 24 paisa/pick/mt.
For twill weave, the cost = 12 paisa/pick/inch/sq mt.
For satin weave, the cost = 12 paisa/pick/inch/sq mt.
In case of P/V suiting, the cost ranges from 14 paisa/pick to 20 paisa/pick. For 1,000 m
beam with dobby, the weaving cost is 17 paisa/pick and for 1,000 m beam with jacquard
is 20 paisa/pick.
For dobby, the cost = 12 paisa/pick/inch/sq mt.
For 2400 hook jacquard the cost = 40 paisa/pick/inch/sq mt.
For double beam fabrics like seer sucker, the cost is = 20 paisa/pick/inch/sq mt.
There is no standardisation in dobby and jacquard fabrics. These fabrics are produced in
different textile centres like Bhiwadi, Surat, Banaras, Meerut, Panipat and the quality
varies a lot. For yarn dyed stripes and checks in handloom the efficiency is affected by the
number of colours in the weft but mill-made stripes and checks are made on Sulzer loom
in which the production is not affected by the number of colours in the warp or weft.
Wastage and shrinkage
Wastage of 2 - 3% in warping and weaving and shrinkage
of 1 - 1.5% from loom to grey folding stage is included in
the weaving cost. About 92% of the fabric produced is
sold as fresh. The value loss is about 7% while running
cotton material but is only 3% in using polyester yarn.
Dyeing costs
Cost of dyeing depends upon:

Length: A minimum of 2,000 mt of fabric is accepted, if the quantity of the fabric is

more say 15,000 mt or 20,000 mt, then the processing charges will be lowered by Rs 1 2/mt.
Width of the fabric: If the width of the fabric is doubled, the cost of the processing is not
doubled. So it is beneficial to go for wider width fabrics rather than fabrics with more
length. This is because the overheads and cost of running the material are dependent on
the length and not the width. Eg, the cost of dyeing 40" width poplin is Rs 10, but the cost
of dyeing 120" width fabric is Rs 22.
Shade%: Lighter the shade lower the cost. The amount of dye required is less as well as
time required for dyeing is less. Eg, for dyeing pastel shades if it takes 24 hours, it takes
36 hours for dyeing black shades and burgundy colour.
Class of dye and quality: Some dyes are more expensive than the other. Eg, Vat dyes are
more expensive than reactive dyes and better expertise is required for dyeing, so for the
same shade the cost of a fabric with vat dyes is more than a fabric dyed in reactive dyes.
The choice of dye depends on the buyer, the fastness properties and also on the shade
selected.
Colour: Within the same dye class some colours are more
expensive than the other. For eg, turquoise and reds are
more expensive.
Metamerism: Some colours change their shade in
different lights. If the shades are matched in two or three
lights only then the cost is less, but when the matching is
required in all the six lights, natural daylight (D-65), Tube
light (TL-83), Horizon (yellow light as produced during sun set), Incandescent, (Inca-A),
Fluorescent (CWF or cool white Fluorescent), Ultraviolet light (UL-30 or ultra luma) or
no metamerism is required, then better quality dyes are required and the cost is more.
Weight of the fabric: Lighter the fabric quicker is the dye pick-up so dyeing time is
saved. Capacity of the machine is expressed in weight of the material for lighter weight

fabrics, more length of the material can be processed at one time, so dyeing cost is
reduced.
All the above prices are for a minimum quantity of 1,500 - 2,000 mt and if the quantity is
less the price will go up. This principle applies for all yarn-dyed fabrics also. Pastel
shades are dyed in procion cold dyes and medium and dark shades are dyed in hot
reactive dyes.
Finishing cost

Process Cost
Flame

retardant

15Rs/mt

finish
Antistatic finish

5 Rs/mt

Anti stain

10Rs/mt

Anti wrinkle

5Rs/mt

If softeners are added in the jigger after dyeing, then the cost is Rs 10/kg whereas if it is
done on a separate machine and later stentering is done then the cost is Rs 20/kg. The
quality of fabric is better in second case as the cover is better and there is no shrinkage
later.
Shrinkage and wastage
It is important to note that wastage and shrinkage are integral part of costing. Generally a
minimum shrinkage of 5 - 7% is acceptable.
Below is a Table showing shrinkage of different fabrics:

Below is a Table showing shrinkage of different

fabrics:
Fabric

Shrinkage%

Poplin, Sheeting

3%

Cotton Voile, cambric

Polyyester/Viscose

5%
blend

fiber-

4.5-5%

dyed
Polyester viscose piece-dyed

6%

100% grey polyester

20%

Cost of the fabric = Cost of grey fabric + dyeing charges + finishing charges + shrinkage
+ wastage.
Conclusion: Costing is a very complex procedure. There are set patterns and guidelines
followed by the industry. It is difficult to find out costs for every process as there are
some inbuilt costs while costing. A larger picture has been taken into account while
quoting the cost. Costing depends a lot on quantity and order received. Indirect cost is
about 15 - 20%. On top of the cost a profit of 15 - 20% is added. It is not only the cost of
the final product that matters, for exports the cost is generally given as FAS, FOB, CIF
and LDP.
FAS (Free along Side) means: It is the cost of finished goods plus it includes the delivery
of the goods to port, dock, etc. The price does not include loading into the ship, etc, or the
shipping or any other charges incurred from that point on.
FOB (Free on Board): It is the cost of finished goods, cost of delivery of the goods to port
and loading onto the ship, plane, etc. The cost does not include the shipping or any other
costs incurred from that point on.
CIF (Cost Insurance and Freight): It includes the cost of finished goods plus it includes
the delivery of the goods to the port, loading on the ship, shipping charges, all applicable
insurance fees along the way. The price does not include going through customs or any
duties or other costs incurred from that point.
LDP (Landed & Duty Paid): It is the cost of the finished goods, plus it includes the
delivery of the goods to port, loading on the ship, shipping charges and the goods brought
through the customs with all applicable duties and taxes paid.

Lead time plays an important part in the domestic and export market. Generally for
production of greige fabric the lead time is 30 days. Processing time for grey fabric is 15 20 days but when the buyer needs something urgently then the above costing parameters
sometimes are not significant; It depends on demand and supply.
FACTORS INFLUENCING COSTING OF KNITTED FABRICS (G., 2008)
Knitting yarn is the biggest section of yarn types when the thickness and texture is taken into
consideration. The yarns for knitting are usually sold as skeins, or hanks with labels, which include
information for the yarn for knitting.
There are two main types of knitting yarn: Classic Yarns are being used for a long time to make
sweaters, jackets, and even socks. Natural fibers were commonly used for classic yarns, and after a
time with synthetic yarns, people turned back to natural-fiber yarns. Fancy Yarns (also known as
Novelty Yarns) consist of interesting textures and fibers. Some of novelty yarns are made by blending
two or more fibers. The usage area is mostly accessories, but there are some yarns that can be used for
regular clothing. The main types of novelty yarns are: eyelash, boucle, ribbon, chenille, and slub
yarns. Most of them are names with their appearance.
The thickness or weight of the yarn is a significant factor in determining the gauge, i.e., how many
stitches and rows are required to cover a given area for a given stitch pattern. Thicker yarns generally
require thicker knitting needles, whereas thinner yarns may be knit with thick or thin needles. Yarns
are grouped by thickness into six categories: superfine, fine, light, medium, bulky and superbulky;
quantitatively, thickness is measured by the number of wraps per inch (WPI). The related weight per
unit length is usually measured in tex or denier.

The various factors affecting the cost of knitting are as follows:

1.

The Gauge

2.

The GSM

3.

Dia of the fabric knitted

The logic here is

Increase in Gauge will increase in cost of knitting.
Increase in GSM means increase in Count
Therefore increase in GSM or count will increase in cost of knitting.

Generally the dia used are between 20" to 36".

So variation in this range of dia does not affect the cost of knitting.
But dia above or below the range will increase the cost of knitting.

FABRIC TESTING
Identification of materials is not only knowledge of the technical specification, but also
sensory evaluation. By touching you get such information you cannot get with other senses,
e.g. perception of the surface of the product, its temperature, hardness and roughness.
Textiles differ from other technical structures in that it must have sufficient strength and at
the same time it has to be flexible, elastic and easy to pleat and shape. Very important
criterion when you evaluate textiles in traditional use is that the fabric and the garment are
comfortable in aesthetic and in physiological sense.
The comfort sensation of a fabric has multi -dimensional attributes and is impossible to
quantify through a single physical property. In order to find a method for the comfort
evaluation of textiles, the concept of fabric hand is commonly used to assess fabrics. Term
fabric handle or simply handle or hand is also used. Fabric hand refers to the total
sensations experienced when a fabric is touched or manipulated. It is a complex parameter
and is related to the fabric properties such as flexibility, compressibility, elasticity, resilience,
density, surface contour (roughness, smoothness), surface friction and thermal character.
Hand is often the fundamental aspect that determines the success or failure of a textile
product.
The role of drape in a garment is an important aspect of aesthetics. Drape can be defined as a
property which characterises the shape of a fabric when it is hanging down of its own weight.
Drape properties are needed when modelling the cloth in virtual environment. (Mailis
Maiknen)
Colour and Colour Approval Process: The colour palette for each category (T-shirt,
Sweaters & Jackets) will be sent in advance. Supplier would be entitled to get the lab dips
approval within 15 days from the receipt of the colour swatches.
Structure: The structure needs to be approved with reference to the Gauge, GSM and Stitch
density. (Choudhary, 2004)

Factors affecting the fabric hand

In textiles raw material, yarn structure, planar structure and finishing treatments affect the
fabric hand. Properties of yarns and fabric made from them are influenced by the degree of
twist in the yarn. In woven and knitted fabrics the woven / knitted fabric type and the yarn
/stitch densities affect to the fabric hand. By knitting it is not possible to produce so tight
fabrics than by weaving. The density of knitted fabric depends on the gauge (needle density)
of the knitting machine. Nonwoven fabrics differ from knitted or woven fabrics, because they
are not based on yarns. They are based on webs of individual fibres, which can be bonded to
each other by several means. The texture ranges from soft to harsh . Finishing is an extremely
complex subject because of the large number of changes that occur in fabric properties during
a finishing sequence. The effects of many finishing operations are interactive. By using
various finishing treatments different kind of end products can be produced from the same
unfinished woven or knitted fabric.
Subjective and objective assessments of fabric hand
Fabric hand is a generic term for descriptive characteristics of textiles obtained through
tactile comparison. Fabric hand attributes can be obtained through subjective assessment or
objective measurements.
Subjective assessment is the traditional method of describing fabric handle based on the
experience and variable sensitivity of human beings. Textiles are touched, squeezed, rubbed
or otherwise handled to obtain information about physical parameters. In the clothing
industry, professional trained handle experts sort out the fabric qualities.
Objective assessment has a different primary goal: it is to predict fabric hand by testing
relationships between sensory reactions and instrumental data. Methods include the Inhouse
Fabric Testing Evaluation System for fabrics and the Fabric Assurance by Simple Testing
(FAST) method. Both systems measure similar parameters using different instrumental
methods. Additional techniques consist of the ring or slot tester, which tests are less accurate
but faster and cheaper to handle.
However, although objective assessments are precise from a mechanical point of view, these

methods have not been commonly used in the textile and clothing industry. Even today, many
companies still use subjective evaluation to assess fabric properties. The main reason for this
situation is the repetitive and lengthy process of measurement and the lack of knowledge for
a good interpretation of the test results.
Factors effecting on subjective assessment
In the subjective assessment process of textiles, fabric hand is understood as result of a
psychological reaction through the sense of touch. There are variations in how individuals
actually feel textiles because people do not have the same sensory perception of identical
occurrences. Affecting aspects can be regrouped in sociological factors and the physiological
factors.
Research works that focused on the sociological aspects used traditional statistical
methodologies applied to experiments on representative samples. Gender, age, education and
cultural backgrounds were tested and studied as potential influencing factors. Female
individuals in general respond more delicately and sensitively than male individuals and
therefore have a finer assessment of a specific parameter.
Beyond the sociological or psychological considerations, physiological factors of evaluators
also have a direct impact on the subjective assessment. Different skin hydrations of
individuals affect notably the feel of a textile. A higher moisture level on the skin makes it
more sensitive to the sense of touch.
In order to ensure the reliability of subjective assessments it is critical to choose the right
expressions for the description of a fabric handle parameter. People may use the same word
meaning different hand values. For this reason it is preferable to use a paired comparison
technique, the so-called bipolar pairs of sensory attributes, such as thin/thick or
soft/harsh . For the same reason, fabric hand attributes are measured on specific scales
thus avoiding the intrinsic weakness of descriptive terminology.

Fabric selection process

1. Criterion: Fibre
The fibre has been chosen as the first criterion for the fabric selection process. Different fibre
properties (natural/man made, staple/filament) influence on the fabric parameters. In todays
clothing collections in stores, synthetic and blended fabric qualities play an important role.
2. Criterion: Structure
In the fabric selection process a variety of different fabric structure has been chosen: 23
woven fabrics, 7 knitted fabrics, one nonwoven and leather. The fabric structure has a high
influence on the fabric properties, i.e. knitted textiles are mostly more elastic than woven
fabrics. In the selection process fabrics with the same fibre composition different structures
have been chosen to analyze the influence of the structure to the hand parameter.
3. Criterion: Dimension
The third criterion of selection was based on the physical aspect and dimension of the fabrics,
like thickness, yarn density and weight. Fabrics, composed of the same fibre and the same
structure, can still be different among thickness and weight, caused by yarn number, yarn and
loop densities or finishing treatments.

COMPETITION FACED BY THE INDIAN DECENTRALISED SECTOR

(CHINA: THE FABRIC FACTORY OF THE WORLD , 2011)
The competitors
With globalisation and the end of the quota regime the competitors in the market are many,
but the biggest competitor in the market for the Indian textile company is their Chinese
counterparts. Irrespective of all the issues which China is internally coping with like
appreciating currency, labour getting expensive , shortage of labour, energy cost rising and
increasing movement to move up the value chain and away from textile, no country can yet
beat its finesse in some fabric qualities, pricing and delivery time.
(Chinese Fabric Most Wanted, 2009)
Fabric manufacturing in China is decentralized yet organised
The fabric which is coming from China with impeccable and highly advanced treatments and
finishes along with just 25-30 days delivery time is not necessarily from composite mills. In
India the prime reason given to poor quality fabric and extended lead times id that its not
produced in composite mills. How can one keep a check if each process is outsourcing from
different companies...is a question many ask. Ironically, in China they have a mindset that if
one specializes in one job the quality is better and so is the delivery.
Normally in China the weaving, dyeing/printing, finishing and advanced finishes are done in
separate units. Each unit delivers the product in its own stipulated time. This theory can be
applied in the Indian decentralised sector also to get fantastic results.
Composite mills are always expensive because they have different profit centres within the
company. The factory which is doing grey will only charge for grey fabrics but in composite
mill they charge separately for each process at every stage.
The capacity of weaving, knitting and dyeing is far superior and their management of
processing is much better than India, says Ramesh Menon of DMI, New Delhi.
China has become expensive by 10% in the last one year, but if you compare China with
India, still there is gap of 10 -15 % in the costing between the two countries. The duty

drawback which the China is giving to its fabric exporters is much better than what India is
offering to its players-there is a difference of 5-7% vis-a-vis the Indian factories, says
Yogesh Maheswari, Director, Bimla Maru Fashions, a Noida based young company doing an
annual turnover of Rs. 60 crore from trading fabrics procured from China. This is one of the
main reasons that the buyers are nominating these suppliers from China for fabric sourcing.
The Indian textile industry needs to pull up its socks and not sit complacent that China is
getting expensive because its currency is appreciating or its labour costs are going up at the
end of the day, the buyers look for quality and innovative products and they are willing to pay
what the product deserves.

MARKETING THE SUPPLIERS OF THE DECENTRALISED SECTOR

TO THE GLOBAL MARKET
In todays fast moving world the lead times are becoming shorter as fashion is changing in
short period of time. The buyers are looking out for new options for their supplies at best
price, shorter lead times, on-time delivery and with the demanded quality. This has opened
new doors of opportunity to the smaller suppliers of the decentralised sector. But these
suppliers need to be exposed to the global market. Many steps are being taken today which
are providing these suppliers with opportunities to showcase their ability and quality.
(Preparation for Source Zone in Full Swing, 2011)
The Intertextile Shanghai Apparel Fabrics (Strong focus on Quality of Buyers and Suppliers,
intertextile Shanghai apprel fabrics, 2011), which is the worlds largest industry event in the
world provides new opportunity to both the buyers and the suppliers keeping a strong focus
on quality. This show has grown into the most important platform where mass to luxury
suppliers can find new business partners , offer inspirational trends, learn from others,
experience and excite the growing fashion industry in China and worldwide.
A similar step has also been taken in India, with the KingPin show (The King Pins Show
Maiden show in India...Gets Encouraging response from industry, 2011), which is the worlds
largest show for denims. It was held in New Delhi on April 27 and 28, 2011 and left a very
positive impression among both the participants and the invitees.
Working in this direction is also the new iSupplier Program by Intertek (Intertek initiates
'isupplier Program' to promote exporters to international buyers , 2011) which has been
brought to India after the successful launch in China and Taiwan. ISI is a cost-effective
solution for buyers who require trusted supplier partners to identify the same when making
purchasing decisions. This new platform minimizes risks and knowledge gaps for global
buyers, which is vital for success in todays global business environment We make available
active supplier profiles so trading communities can discover each other and do business with
trust, transparency, confidence, greater speed, ease, and reduced cost whilst also managing
reputational risk an demonstrating due diligence. Transparency and traceability are the key

ingredients of success, said David Horlock, Vice President, Supplier management services,
Intertek.
Using iSupplier Intelligence, buyers can filter search options to select quality suppliers from
all over the world with the required criterion. As the parameters to decide sourcing
destinations is readily available through a transparent platform, the buyers save upon the
costs and times consumed in the process, just by paying a membership fees of $999. The
more you know the lower the risk, says Horlock.
The suppliers would have to pay a membership amount of $299 just for setting up their
profile, supplier are expected to pay additional amount of $1700 for achieving a verified by
ISI indication on their profile which would activate the same. Currently the web portal has a
total of 44,000 profiles out of which 4000 have achieved the Verified by ISI, many of the
world famous brands and retailers are always looking for new suppliers so being listed on a
credible and trusted platform with a fully completed profile verified by Intertek has the
opportunities to attract new buyers, in time, we would also be able to provide the supplier
with important information on what buyers are looking for and how improving their profile
will attract more traffic adds Horlock. The buyer member will use our platform for
sourcing supplier, searching and sending business inquiry message to the selected supplier.
And we are organising regular business matching activities from online screening through our
platform to face-to-face business matching events. This would enhance a very close
interaction between buyers and suppliers for a better marketing to each other, concludes
Horlock.
(Tex Trends India 2011, 2011)

SWOT ANALYSIS
Indias biggest strength lies in its big pool of cheap and talented workforce. However, apart
from it there are few other important factors which contributes to its strength of Indian
Decentralised textile sector (Pawar, 2009)

INDIAN DECENTRALISED TEXTILE INDUSTRY : SWOT ANALYSIS

Strength :
1. One of the largest employers after agriculture.
2. Low wage rates at 0.75US$ per operator hour as compared to 1.00 US$ of China and US$3
of turkey.
3. It provides employment to 48.60 lakh persons and contributes 62 percent to total cloth
production in the country.
Weakness :
1. Technology level requires up-gradation.
2. Manpower desires to be trained & educated.
3. Scarcity of availability of finance from financial institutions.
4. Skilled Manpower not available.
5. Lack of Capital availability
6. Fragmented small Units
7. Low quality and poor production
8. Lack of good marketability
9. Undeveloped Infrastructure
Opportunities:

1. There should be change in the production pattern as per the market demand.
2. Production must be in different fabrics with different properties.
3. Must upgrade production technology.
Threats :
1. Interrupted and high cost of power supply.
2. To produce quality control fabrics with low cost of production.
3. Use of new advanced technology has to be encouraged.
4. Due to the abolition of quota system, many industries face threats from global leaders
domestically and fluctuation in the export demand also.
5. The most problematic area is the inconsistent quality of product. There is need for the
quality improvement to compete globally; major competitor namely China and Hong-Kong in
India.

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