Indian Textile Industry

By: Dr. P. Chellasamy and N. Sumathi

Indian Textile Industry

By: Dr. P. Chellasamy and N. Sumathi
Dr. P. Chellasamy

N.Sumathi

Lecturer in Commerce M.Phil Scholar

Department of Commerce
Bharathiar University

Department of commerce

Bharathiar University

Coimbatore-46 Coimbatore-46

INTRODUCTION
The Indian textile industry has a significant presence in the economy as well as in the
international textile economy. Its contribution to the Indian economy is manifested in terms of its
contribution to the industrial production, employment generation and foreign exchange earnings. It
contributes 20 percent of industrial production, 9 percent of excise collections, 18 percent of
employment in the industrial sector, nearly 20 percent to the countrys total export earning and 4
percent to the Gross Domestic Product.

In human history, past and present can never ignore the importance of textile in a
civilization decisively affecting its destinies, effectively changing its social scenario. A brief but
thoroughly researched feature on Indian textile culture.
HISTORY OF TEXTILE INDUSTRY
India has been well known for her textile goods since very ancient times. The traditional
textile industry of India was virtually decayed during the colonial regime. However, the modern
textile industry took birth in India in the early nineteenth century when the first textile mill in the
country was established at fort gloster near Calcutta in 1818. The cotton textile industry, however,
made its real beginning in Bombay, in 1850s. The first cotton textile mill of Bombay was established
in 1854 by a Parsi cotton merchant then engaged in overseas and internal trade. Indeed, the vast
majority of the early mills were the handiwork of Parsi merchants engaged in yarn and cloth trade at
home and Chinese and African markets.
The first cotton mill in Ahmedabad, which was eventually to emerge as a rival centre to
Bombay, was established in 1861. The spread of the textile industry to Ahmedabad was largely due
to the Gujarati trading class.

The cotton textile industry made rapid progress in the second half of the nineteenth century
and by the end of the century there were 178 cotton textile mills; but during the year 1900 the
cotton textile industry was in bad state due to the great famine and a number of mills of Bombay
and Ahmedabad were to be closed down for long periods.

The two world War and the Swadeshi movement provided great stimulus to the Indian
cotton textile industry. However, during the period 1922 to 1937 the industry was in doldrums and
during this period a number of the Bombay mills changed hands. The second World War, during
which textile import from Japan completely stopped, however, brought about an unprecedented
growth of this industry. The number of mills increased from 178 with 4.05 lakh looms in 1901 to 249
mills with 13.35 lakh looms in 1921 and further to 396 mills with over 20 lakh looms in 1941. By
1945 there were 417 mills employing 5.10 lakh workers.

The cotton textile industry is rightly described as a Swadeshi industry because it was
developed with indigenous entrepreneurship and capital and in the pre-independence era the
Swadeshi movement stimulated demand for Indian textile in the country.

The partition of the country at the time of independence affected the cotton textile industry
also. The Indian union got 409 out of the 423 textiles mills of the undivided India. 14 mills and 22
per cent of the land under cotton cultivation went to Pakistan. Some mills were closed down for
some time. For a number of years since independence, Indian mills had to import cotton from
Pakistan and other countries.
After independence, the cotton textile industry made rapid strides under the Plans. Between
1951 and 1982 the total number of spindles doubled from 11 million to 22 million. It increased
further to well over 26 million by 1989-90.
CURRENT POSSITION OF TEXTILE INDUSTRY IN INDIA
Textile constitutes the single largest industry in India. The segment of the industry during
the year 2000-01 has been positive. The production of cotton declined from 156 lakh bales in 19992000 to 1.40 lakh bales during 2000-01. Production of man-made fibre increased from 835 million
kgs in 1999-2000 to 904 million kgs during the year 2000-01 registering a growth of 8.26%. The
production of spun yarn increased to 3160 million kgs during 2000-01 from 3046 million kgs during
1999-2000 registering a growth of 3.7%. The production of man-made filament yarn registered a
growth of 2.91% during the year 1999-2000 increasing from 894 million kgs to 920 million kgs. The
production of fabric registered a growth of 2.7% during the year 1999-2000 increasing from 39,208
million sq mtrs to 40,256 million sq mtrs. The production of mill sector declined by 2.6% while
production of handloom, powerloom and hosiery sector increased by 2%, 2.7% and 5.1%
respectively. The exports of textiles and garments increased from Rs. 455048 million to Rs. 552424
million, registering a growth of 21%. Growth in the textile industry in the year 2003-2004 was Rs.
1609 billion. And during 2004-05 production of fabrics touched a peak of 45,378 million squre
meters. In the year 2005-06 up to November, production of fabrics registered a further growth of 9
percent over the corresponding period of the previous year.

With the growing awareness in the industry of its strengths and weakness and the need for
exploiting the opportunities and averting threats, the government has initiated many policy
measures as follows.

The Technology Upgradation Fund Scheme (TUFS) was launched in April 99 to provide
easy access to capital for technological upgradation by various segments of the Industry.

1 The Technology Mission on Cotton (TMC) was launched in February 2000 to address
issues relating to the core fibre of Cotton like low productivity, contamination, obsolete
ginning and pressing factories, lack of storage facilities and marketing infrastructure

1 A New Long Term Textiles and Garments Export Entitlement (Quota) Policies 2000-2004
was announced for a period of five years with effect from 1.1.2000 to 31.12.2004 covering
the remaining period of the quota regime.
In the current year Budget 2006-2007 states the measures for Textile Industry as follows

Allocation to the Technology Upgradation Fund (TUF) enhanced from Rs4.4bn to

Rs 5.4bn.
Provision for the interest subsidy on term loans to the handloom sector to be
increased from Rs2.0bn to Rs 2.4bn.
Rs1.9 bn to be provided for the scheme for integrated Textiles Parks (launched in
October 2005 with the intention of creating 25 textile parks)
Excise duty on all man-made fibre yarn and filament yarn to be reduced from 16%
to 8%
Import duty on all man-made fibers and yarns to be reduced from 15% to 10%.
FUTURE PROSPECTS:
The future outlook for the industry looks promising, rising income levels in both urban and
rural markets will ensure a rising market for the cotton fabrics considered a basic need in the realm
of new economic reforms (NER) proper attention has been given to the development of the textiles
industry in the Tenth plan. Total outlay on the development of textile industry as envisaged in the
tenth plan is fixed at Rs.1980 crore. The production targets envisaged in the terminal year of the
Tenth plan are 45,500 million sq metres of cloth 4,150 million kg of spun yarn and 1,450 million kg
of man made filament yarn. The per capita availability of cloth would be 28.00 sq meters by 20062007 as compared to 23.19 sq meters in 2000-01 showing a growth of 3.19 percent. The export
target of textiles and apparel is placed at $32 billion by 2006-2007 and $50 billion by 2010.
Vision India 2010 for Textiles
Textile economy to grow to $ 85 bn. by 2010.
Creation of 12 million new jobs in Textile Sector.
To increase Indias share in world trade to 6% by 2010.
Achieve export value of $ 40 Billion by 2010.

Modernisation and consolidation for creating a globally competitive industry.

STRUCTURE OF INDIAS TEXTILE INDUSTRY
The textile sector in India is one of the worlds largest. The textile industry today is divided
into three segments:

1. Cotton Textiles
2. Synthetic Textiles
3. Other like Wool, Jute, Silk etc.
All segments have their own place but even today cotton textiles continue to dominate with
73% share. The structure of cotton textile industry is very complex with co-existence of oldest
technologies of hand spinning and hand weaving with the most sophisticated automatic spindles
and loom. The structure of the textile industry is extremely complex with the modern, sophisticated
and highly mechanized mill sector on the one hand and hand spinning and hand weaving
(handloom sector) on the other in between falls the decentralised small scale powerloom sector.

Unlike other major textile-producing countries, Indias textile industry is comprised mostly of
small-scale, nonintegrated spinning, weaving, finishing, and apparel-making enterprises. This
unique industry structure is primarily a legacy of government policies that have promoted laborintensive, small-scale operations and discriminated against larger scale firms:
Composite Mills.
Relatively large-scale mills that integrate spinning, weaving and, sometimes, fabric finishing are
common in other major textile-producing countries. In India, however, these types of mills now
account for about only 3 percent of output in the textile sector. About 276 composite mills are
now operating in India, most owned by the public sector and many deemed financially sick. In
2003-2004 composite mills that produced 1434 m.sq mts of cloth. Most of these mills are
located in Gujarat and Maharashtra.
Spinning.
Spinning is the process of converting cotton or manmade fiber into yarn to be used for weaving
and knitting. This mills chiefly located in North India. Spinning sector is technology intensive
and productivity is affected by the quality of cotton and the cleaning process used during
ginning. Largely due to deregulation beginning in the mid-1980s, spinning is the most
consolidated and technically efficient sector in Indias textile industry. Average plant size
remains small, however, and technology outdated, relative to other major producers. In
2002/03, Indias spinning sector consisted of about 1,146 small-scale independent firms and
1,599 larger scale independent units.
Weaving and Knitting.

The weaving and knits sector lies at the heart of the industry. In 2004-05, of the total production
from the weaving sector, about 46 percent was cotton cloth, 41 percent was 100% non-cotton
including khadi, wool and silk and 13 percent was blended cloth. Three distinctive technologies
are used in the sector handlooms, powerlooms and knitting machines. Weaving and knitting
converts cotton, manmade, or blended yarns into woven or knitted fabrics. Indias weaving and
knitting sector remains highly fragmented, small-scale, and labour-intensive. This sector
consists of about 3.9 million handlooms, 380,000 powerloom enter-prises that operate about
1.7 million looms, and just 137,000 looms in the various composite mills. Powerlooms are
small firms, with an average loom capacity of four to five owned by independent entrepreneurs
or weavers. Modern shuttleless looms account for less than 1 percent of loom capacity.
Fabric Finishing.
Fabric finishing (also referred to as processing), which includes dyeing, printing, and other cloth
preparation prior to the manufacture of clothing, is also dominated by a large number of
independent, small-scale enterprises. Overall, about 2,300 processors are operating in India,
including about 2,100 independent units and 200 units that are integrated with spinning,
weaving, or knitting units.
Clothing.
Apparel is produced by about 77,000 small-scale units classified as domestic manufacturers,
manufacturer exporters, and fabricators (subcontractors).
INDIAS MAJOR COMPETITIORS IN THE WORLD
To understand Indias position among other textile producing the industry contributes 9% of
GDP and 35% of foreign exchange earning, Indias share in global exports is only 3% compared to
Chinas 13.75% percent. In addition to China, other developing countries are emerging as serious
competitive threats to India. Looking at export shares, Korea (6%) and Taiwan (5.5%) are ahead of
India, while Turkey (2.9%) has already caught up and others like Thailand (2.3%) and Indonesia
(2%) are not much further behind. The reason for this development is the fact that India lags behind
these countries in investment levels, technology, quality and logistics. If India were competitive in
some key segments it could serve as a basis for building a modern industry, but there is no
evidence of such signs, except to some extent in the spinning industry.

Indias Competitive Position in Stages of Textile Manufacture

Determinants of

India's

Competitive Advantage

Competitive Emerging Competition

Process

Position

Spinning

Quality, cotton price

Medium

Weaving

Technology, automation, Low

Indonesia, Turkey
Vietnam, Philippines

Power, finance
Processing,

Scale economy
Technology, environmentLow

China, Vietnam, Philippines

Issues, finance
Garmenting

Labour cost, Productivity, Medium

Bangladesh, Sri Lanka,

Brand fashion design

Morocco, east Europe, Mexico

PROBLEM FACED BY THE TEXTILE INDUSTRY IN INDIA

The cotton textile industry is reeling under manifold problems. The major problems are the
following:
Sickness:
Sickness is widespread in the cotton textile industry. After the engineering industry, the cotton
textile industry has the highest incidence of sickness. As many as 125 sick units have been
taken over by the Central Government. Sickness is caused by various reasons like the
problems mentioned below.
Obsolescence:
The plant and machinery and technology employed by a number of units are obsolete. The
need today is to make the industry technologically up-to-date rather than expand capacity as
such. This need was foreseen quite sometime back and schemes for modernisation of textile
industry had been introduced. The soft loan scheme was introduced a few years back and
some units were able to take advantage of the scheme and modernise their equipment.
However, the problem has not been fully tackled and it is of utmost importance that the whole
industry is technologically updated. Not many companies would be able to find resources
internally and will have to depend on financial institutions and other sources.
Government Regulations:
Government regulations like the obligation to produced controlled cloth are against the interest
of the industry. During the last two decades the excessive regulations exercised by the
government on the mill sector has promoted inefficiency in both production and management.
This has also resulted in a colossal waste of raw materials and productive facilities. For
example, the mills are not allowed to use filament yarn in warp in order to protect the interest of
art silk and powerloom sector which use this yarn to cater to the affluent section of society.

Low Yield and Fluctuation of Cotton Output:

The cotton yield per hectare of land is very low in India. This results in high cost and price.
Further, being largely dependent on the climatic factors, the total raw cotton production is
subject to wide fluctuation causing serious problems for the mills in respect of the supply of this
vital raw material.
Competition from Man-made Fibres:
One of the serious challenges facing the cotton textile industry is the competition from the manmade fibres and synthetics. These textures are gradually replacing cotton textiles. This
substitution has in fact been supported by a number of people on the ground that it is not
possible to increase substantially the raw cotton production without affecting other crops
particularly food crops.
Competition from other Countries:
In the international market, India has been facing severe competition from other countries like
Taiwan, South Korea, China and Japan. The high cost of production of the Indian industry is a
serious adverse factor.
Labour Problems:
The cotton textile industry is frequently plagued by labour problems. The very long strike of the
textile workers of Bombay caused losses amounting to millions of rupees not only to the
workers and industry but also to the nation in terms of excise and other taxes and exports.
stocks resulting in The situation
leads to price cuts and the like

Accumulation of Stock:
At times the industry faces accumulation of
huge stocks. low profits.

the problems

leading to loss or

of very low off

take of

India

positive

.Thro

by the exporting

percent

ught

community,

export. In world textile trade

of other problems like power

expo

textile

has risen to 3.1 percent in

cuts, infrastructural problems,

rt

increased

1999-2000 as against 1.80

lack of finance, exorbitant rise

frien

substantially

percent in early nineties.

in raw material prices and

dly

from US$ 5.07

Exports have grown at an

production costs etc.

gove

billion in 1991-

average of 11 percent per

rnme

92 to US$ 12.10

annum over the last few

nt

billion

during

years, while world textile

polici

2000-01.

The

trade has grown only about

es

textile

export

5.4 per cent per annum in

and

basket

Miscellaneous:
The industry faces a number

EXPORT AT GLANCE:

Textile

exports

plays a crucial role in the

overall

exports

from

efforts

exports

contributing
of

over
total

46
textile

the same years. During

the year 2000-01 Indias textile export was US$ 12014.4 million. It was increased the year
2004-05 US$ 13038.64 million. The exports of textiles (including handicrafts, jute, and coir)
formed 24.6% of total exports in 2001-2002, however this percentage decreased to 16.24%
during 2004-2005. The textile exports recorded a growth of 15.3% in 2002-2003 and 8.7%
in 2003-2004. Textile exports during the period of April-February 2003-2004 amounted to
$11,698.5 million. During 2004-05 textile exports were US$ 13,039.00 million, recording a
decline of 3.4% as compared to the corresponding period of previous year. However, during
April-November, 2005, the textile exports have shown growth of 8.2% as compare to the
corresponding period of previous year. Against a target of US$ 15,160 million during 200405, the textile exports were of US$13039 million, registering a shortfall of 14% against the
target. The overall export target for 2005-06 has been fixed at US$ 15,565 million. In 2005
textile and garments accounted for about 16% of export earning. Indias textile export to the
US have shown a good rise of 29.5% between January and June 2005.
INVESTMENT IN TEXTILE INDUSTRY
Investment is the key for Indian textiles to make rapid strides. The Vision Statement
prepared by the Indian Cotton Mills federation has projected that the industry has the
potential to reach a size of $85 billion by 2010 from the current level of $ 36 billion. Further,
the vision statement has estimated that textile exports could touch $40 billion by 2010 from
$ 11 billion in 2002. In the process, Indias share in the global textile and clothing trade is
expected to double from three percent in 2002 to six percent by 2010.

To reach these these ambitious target, it is estimated that new investment to the
tune of Rs.1, 40,000 crores will be needed in the next five years. After analysing the
capacity and technology levels in various segments of textile Industry and the need for
modernisation, funds required for various segments have been below.
Sl.No.

Segment

Investment
(Rs.in crore)

1.

Ginning & Processing

1,800

2.

Spinning

10,600

3.

Weaving

22,950

4.

Knitting

3,150

5.

Woven Processing

25,800

6.

Knit Processing

7.

Clothing

8.

Jute

9.

Silk, Wool

1,200

Total

98,550

8,550
24,000
500

INVESTMENT IN TEXTILE
30000

25000

INVESTMENT

20000

15000

10000

5000

0
g
sing
es
Proc

Spi

ni

g
in

Weav

ng
tti

Kni

en

ing
ss

ov
W
t

ng
nni

roce
P

hing
Cl

ot

Jute

W ool
,
lk
Si

SEGMENTKni

Gi

INVESTMENT

GOVERNMENT POLICIES, SCHEMES AND CORPORATIONS

FOR PROMOTING TEXTILE INDUSTRY IN INDIA:
The Multi-Fibre Agreement (MFA)

The Multi-Fibre Agreement (MFA), that had governed the extent of textile trade between
nations since 1962, expired on 1 January 2005. It is expected that, post-MFA, most tariff distortions
would gradually disappear and firms with robust capabilities will gain in the global trade of textile
and apparel. The prize is the $360 bn market which is expected to grow to about $600 bn by the
year 2010 barely five years after the expiry of MFA.
National Textile Policy 2000
Faced with new challenges and opportunities in a changing global trade environment, the
GOI unveiled its National Textile Policy 2000 (NTP 2000) on November 2, 2000. The NTP 2000
aims to improve the competitiveness of the Indian textile industry in order to attain $50 billion per
year in textile and apparel exports by 2010.86 The NTP 2000 opens the countrys apparel sector to
large firms and allows up to 100 percent FDI in the sector without any export obligation.

1
0

Export Promotion Capital Goods (EPCG) scheme

To promote modernization of Indian industry, the GOI set up the Export Promotion Capital
Goods (EPCG) scheme, which permits a firm importing new or Secondhand capital goods for
production of articles for export to enter the capital goods at preferential tariffs, provided that
the firm exports at least six times the c.i.f. value of the imported capital goods within 6 years.
Any textile firm planning to modernize its operations had to import at least $4.6 million worth of
equipment to qualify for duty-free treatment under the EPCG scheme.
Export-Import Policy
The GOIs EXIM policy provides for a variety of largely export-related assistance to firms
engaged in the manufacture and trade of textile products. This policy includes fiscal and other trade
and investment incentives contained in various programs
Duty Entitlement Passbook Scheme (DEPS)

DEPS is available to Indian export companies and traders on a pre- and post-export basis.
The pre-export credit requires that the beneficiary firm has exported during the preceding 3-year
period. The post-export credit is a transferable credit that exporters of finished goods can use to
pay or offset customs duties on subsequent imports of any unrestricted products.
The Agreement on Textiles and Clothing (ATC)

The Agreement on Textiles and Clothing (ATC) promises abolition of all quota restrictions in
international trade in textiles and clothing by the year 2005. This provides tremendous scope for
export expansion from developing countries.
Guidelines of the revised Textile Centres Infrastructure Development Scheme (TCUDS)

TCIDS Scheme is a part of the drive to improve infrastructure facilities at potential Textile
growth centres and therefore, aims at removing bottlenecks in exports so as to achieve the target of
US$ 50 billion by 2010 as envisaged in the National Textile Policy, 2000.

Under the Scheme funds can be given to Central/ State Government Departments/ Public
Sector Undertakings/ Other Central /State Governments agencies/recognized industrial association
or entrepreneur bodies for development of infrastructure directly benefiting the textile units. The
fund would not be available for individual production units.
Technology Upgradation Fund Scheme (TUFS)
At present, the only scheme through which Government can assist the industry is the
Technology Upgradation Fund Scheme (TUFS) which provides for reimbursing 5% interest on the

11

loans/finance raised from designated financial institutions for bench marked projects of
modernisation. IDBI, SIDBI, IFCI have been designed as nodal agencies for large and medium
small scale industry and jute industry respectively. They have co-opted 148 leading commercial
banks/cooperative banks and financial institutions like State Finance Corporations and State
Industrial Development Corporation etc.
Scheme for Integrated Textile Parks (SITP)

To provide the industry with world-class infrastructure facilities for setting up their textile
units, Government has launched the Scheme for Integrated Textile Parks (SITP) by merging the
Scheme for Apparel Parks for Exports (APE) and Textile Centre Infrastructure Development
Scheme (TCIDS). This scheme is based on Public-Private Partnership (PPP) and envisages
engaging of a professional agency for project execution. The Ministry of Textiles (MOT) would
implement the Scheme through Special Purpose Vehicles (SPVs).
National Textile Corporation Ltd. (NTC)
National Textile Corporation Ltd. (NTC) is the single largest Textile Central Public Sector
Enterprise under Ministry of Textiles managing 52 Textile Mills through its 9 Subsidiary Companies
spread all over India. The headquarters of the Holding Company is at New Delhi. The strength of
the group is around 22000 employees. The annual turnover of the Company in the year 2004-05
was approximately Rs.638 crores having capacity of 11 lakhs Spindles, 1500 Looms producing 450
lakh Kgs of Yarn and 185 lakh Mtrs of cloth annually.
Cotton Corporation Of India Ltd. (CCI)
The Cotton Corporation of India Ltd (CCI), Mumbai, is a profit-making Public Sector
Undertaking under the Ministry of Textiles engaged in commercial trading of cotton. The CCI also
undertakes Minimum Support Price Operation (MSP) on behalf of the Government of India.
The Ministry of Textiles
The Ministry of Textiles is responsible for policy formulation, planning, and development
export promotionand trade regulation in respect of the textile sector. This included all natural and
manmade cellulosic fibres that go into the making of textiles, clothing and handicrafts.
Powerloom development and export promotion council
Powerloom development and export promotion council, set up by the ministry of textiles
government of India. PDEXCIL provide some export assistance as follows

1 Exploration of overseas market.

2 Identification of items with export potential.
3 Market survey and up-to-date market intelligence.
12

1 Contact with protective buyers to interest them in your products.

2 Providing your company's profile to overseas buyers and vice-versa.
3 Advice on international marketing.
4 Display of selected product groups.
Cotton Textile Export Promotion Council (TEXPROCIL):
The Council looks after the export promotion of cotton fabrics, cotton yarn and cotton
made-ups. Its activities include market studies for individual products, circulation of trade enquiries,
participation in exhibitions, fairs and seminars at home and abroad, in order to boost exports.

SWOT ANALYSIS OF INDIAN TEXTILE INDUSTRY

Indian textile industry has several Strengths
Abundant Raw Material Availability
Low Cost Skilled Labour
Presence

across

the

value-

chain Growing Domestic Market

Indian textile industry has several Weaknesses

Fragmented industry
Effect of Historical Government Policies
Lower Productivity and Cost Competitiveness
Technological Obsolescence

Indian textile industry has several Opportunities

Post 2005 challenges
Research and Development and Product Development
Indian textile industry has several Threats
Competition in Domestic Market
Ecological and Social Awareness
Regional alliances
Strengths
Abundant Raw Material Availability:
Allowing the industry to control cost and reduce over all lead-times across the value chain.
Low Cost Skilled Labour
Low cost skilled labour providing a distinct competitive advantage for the industry.

13

Presence across the value-chain

Presence across the value-chain providing a competitive advantage when compared to
countries likes Bangladesh, Srilanka, who have developed primarily as garmenters.
Reduced Lead-times:
Manufacturing capacity present across the entire product range, enabling textile companies and
garmenters do source their material locally and reduce lead-time.
Super Market:
Ability to satisfy customer requirements across multiple product grades- small and large lot
sizes specialized process treatments etc.
Growing Domestic Market
Growing Domestic market which could allow manufacturers to mitigate risks while
allowing them to build competitiveness.
Weaknesses
Fragmented industry
Fragmented industry leading to lower ability to expand and emerge as world-class players.
Effect of Historical Government Policies
Historical regulations thought relaxed continue to be an impediment to global competitiveness.
Lower Productivity and Cost Competitiveness

Labour force in India has a much lower productivity as compared to competing

countries like china, Srilanka etc.
The Indian industry lacks adequate economies of scale and is therefore unable to
compete with china, and other countries etc.
Cost like indirect takes, power and interest are relatively high.
Technological Obsolescence
Large portion of the processing capacity is obsolete
While state of the art integrated textile mills exist majority of the capacity lies currently
with the powerloom sector.
This has also resulted in low value addition in the industry.
Opportunities

14

Post 2005 challenges

During the year 2005 is a huge opportunity that needs to be capitalised.
Research and Development and Product Development
Indian companies needs to increase focus on product development.

1 Newer specialized fabric- smart Fabrics , specialized treatement etc.

2 Faster turn around times for design samples
3 Investing in design centers and sampling labs.
Increased use of CAD to develop designing capability in the Organisation and
developing greater options.
Investing in trend forecasting to enable growth of the industry in India.
Threats
Competition in Domestic Market
Competition is not likely to remain just in the exports space, the industry is likely to face
competition from cheaper imports as well.
This is likely to affect the domestic industry and may lead to increased consolidation.
Ecological and Social Awareness

Development in the form of increased consumer consciousness on issues such as

usage of child labour unhealthy working conditions etc.
The Indian industry needs to prepare for the fall out of such issues by issues by
improving its working practices.
Regional alliances

Reginal trade blocs play a significant role in the global garment industry with countries
enjoying concessional tariffs by virtue of being members of such blocs/ alliances.
Indian industry would need to be prepared to face the fall out of the post 2005
scenarious in the form of continued barriers for imports.
CONCLUSION:

The Indian textile industry is currently one of the largest and most important sector in the
economy interms of output foreign exchange earnings and employment in India. The Textile
industry has the potential to scale new height in the globalized economy. The textile industry in
India has gone through significant charges in anticipation of increased international competition.
The industry is facing numerous problems and among them the most important once are those of
liquidity for many organized sector units, demand recession and insufficient price realization. The

15

long-range problems include the need for sufficient modernisation and restructuring of the entire
industry to cater more effectively to the demands of the domestic and foreign markets for textiles as
per the needs of today and tomorrow.
BIBLIOGRAPHY
Text Books:

1. Ruddar Datt, K.P.M. Sundharam, Indian Economy p 658, S.Chand & Company Ltd, New
Delhi ,2006

2. P.J. Divatia, Indian Industries in the 21 st Century p46, Deep & Deep Publications Pvt
Ltd, New Delhi, 2003

3. Francis Cherunilam, Industrial Economics Indian Perspective p457, Himalaya Publishing

House 1994

4. B.M.P Singh, Indian Economy Today ,p248,Deep & Deep Publications Pvt Ltd, New
Delhi ,2004
Web Sites:

1. http://www.Indianbusiness.nic.in/India-profile/textile.htm
2. http://www.economywatch.com/business-and-economy/textile-Industry.html
3. http://hotdocs.usitc.gov
4. http://www.texprocil.com/annreport/profile-texprocil.doc
5. http://www.aepcindia.com
6. http://www.in.kpmg.com
7. http://pd.cpim.org/2004/10312004-ganguly.html
8. http://www.pdexcil.org/export.htm
9. http://www.giftsnaccessories.com/magazine/Handicrafts/11.htm
10. http://www.iimahd.ernet.in
11. http://icmr.icfai.org/casestudies
12. http://www.equitymaster.com/budget0607/sectors/textile.asp
13. http://usda.mannlib.cornell.edu/report

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