| Indian Textile Industry: An overview | | | | 6. Government concentration: Textile industry has |
| Textile Industry is offering one of the most basic | | | | secure government consideration being a second |
| requirements of community and it possess importance; | | | | largest employment generator, which can work for its |
| preserve continued growth for developing quality of | | | | support. |
| life. From the manufacturing of raw materials to the | | | | Opportunities: |
| delivery of end products, it has gain its kind of position, | | | | 1. An optimistic opportunity: International garment |
| as a self-dependent sector and with considerable | | | | retailers are enthusiastic to dealing in India. |
| value-addition at every stage of dealing; it is a key | | | | Indian textile outsourcing will expand with buyers in the |
| input to the country's economy. | | | | US, Europe and Africa due to huge support of skillful, |
| Today the textiles and clothing industry engages an | | | | low-cost workers and adequate raw materials |
| important position in India's economy. Being the major | | | | availability in India. Due to cost reduction of successful |
| foreign exchange earner having about 35% in its torso, | | | | supply chain management, it will expect global retailer |
| contributing to about 30 % of India's exports and 14% | | | | clients like Wal-Mart, JC Penney etc. Earlier, JC |
| of industrial productions, expecting above 6% GDP in | | | | Penney, international clothes retailer had sent a team |
| 2005, and it considered as the second largest vital | | | | to India to study the textiles industry trend and after |
| sector of employment initiator after agriculture sector. | | | | proving benefits to them they are showing interest to |
| Present Scenario | | | | double the outsourcing from India after the multi fiber |
| Under the World Trade Organization (WTO) | | | | agreement comes to an end. And they are optimistic |
| Agreement on Textiles and Clothing, the textile quota | | | | and expecting the growth of Indian textiles industry. |
| scheme of quantitative import limitations under the | | | | 2. Innovative opportunity : Indian Fashion Industry labeled |
| multi-fiber arrangement (MFA) came to an end on 1st | | | | signals of outsourcing |
| January, 2005, hence developing countries like India will | | | | Even, after IT and textiles, fashion outsourcing from |
| flourish in the new competitive atmosphere and as a | | | | India attracts international buyers like Saks Fifth |
| result, the Indian textile industry will have a stronger | | | | Avenue and Browns, expecting to have wealth on |
| place in both their export and domestic markets. | | | | exclusive Indian design aspects which have a ready |
| All along with its usual yarn and fabrics, at present India | | | | market abroad. Recently, buyer visitors from Dubai, |
| is exporting more than 100 garment product range. | | | | Pakistan and Hong Kong, US, UK, France visited |
| Many worlds' leading brands like Banana Republic, | | | | Lakme India Fashion Week show and got attention, |
| Tommy Hilfiger, Gap, Liz Claibome, Polo etc, are | | | | these buyers are seeing an opportunity for western |
| sourcing products from India. | | | | wear with Indian nitty-gritty. |
| With huge investments, persistence innovations, latest | | | | 3. Imprint opportunity: The Indian textiles industry is |
| product mix and planned marketing, today, India has | | | | famous for their excellence and charming colors for |
| come out as a flourishing outsourcing centre for | | | | ages beyond 5000 years and have attracted expert |
| textiles and apparel industry to meet the global | | | | from all over the world. The textiles of India stand the |
| requirement of the manufacturing fibers and yarns | | | | imprint of the excellent craftsmanship of the Indian |
| products. In a view of the rising rapport with major | | | | weaver. The skill of weaving with skillful fingers, |
| global brands, dismantling of quota system from 2005 | | | | sketching models and generating designs, is a great skill |
| era would hit upon India as a main global outsourcing | | | | which has been offered through generations from |
| hub. | | | | father to son, from time immemorial, also regional |
| Competitive advantage & possible growth in | | | | areas have their particular kinds of weaves and |
| Synthetic Textiles Sector | | | | accompaniments providing new attention. The skill of |
| India's synthetic textile sector is relatively modern and | | | | regional arts, generation skills of arts, new screen |
| has a high growth potential which will help India to | | | | printing and new digital computer software technology |
| coming out as a major outsourcing hub. With a | | | | will bring the ever green opportunities to India and will |
| compounded annual growth rate of more than 22% | | | | emerge as a global hub of art and design soon. |
| the exports of MMF textiles have stretched out to a | | | | 4. Innovative efforts taken by the Government |
| level of US $1.62 billion in 2002-03 starting from small | | | | . Applications with a project cost of Rs. 18,467 crore |
| exports in 1954. The export growth in 2002-03 | | | | have been approved for financing of amount Rs. 8,505 |
| matches up to the preceding year was in the harmony | | | | crore, under the Technology Up-gradation Fund |
| of 30 percent, and the MMF textile sector is the only | | | | Schemes (TUFS), by Ministry of Textiles, India. For the |
| sector where the performance has exceeds by the | | | | weaving and the processing sector the interest rate |
| target fixed for this year by US $ 115 million. | | | | subsidy has also been increased under TUFS, which |
| Indian synthetic textiles are more and more | | | | guarantee the production and export of quality value |
| accomplishing new markets along with keeping the | | | | added products. |
| market share in the existing markets. At present Indian | | | | . Apparel Parks for Exports, and Textile Centers |
| synthetic textile exports are targeting more than 175 | | | | Infrastructure Development Scheme, de-reservation of |
| countries worldwide, where Middle East accounted for | | | | the garments sector, specialized textile parks, EOUs |
| over 32 percent of our exports and the share of the | | | | & EPZs have been set up |
| extremely quality conscious in European Union, | | | | . Rise in investment ceilings and FDI is freely permitted |
| approximately 23 percent. | | | | in the textile sector |
| Over the years, the Indian MMF textile sector has | | | | . To improve the productivity and quality of cotton, |
| built-up an export base; and the share of MMF textile | | | | introduced a Technology Mission on Cotton |
| exports in the total Indian textile export has also been | | | | . Reduction of basic customs duty on selected textile |
| raised, the share moved up from 10.38% in 2000-01 to | | | | machinery and spare parts |
| 11.46% in 2001-02 and more to about 14% in 2002-03. | | | | . Additional Excise Duty on Textiles & Textile |
| At present Indian exports of synthetic textiles to USA | | | | Articles (AT&T) and Additional Excise Duty |
| are rising at more than 90% yearly. It has also been | | | | (Goods of Special Importance) Act has been |
| observed that export growth will be striking for major | | | | eliminated |
| MMF textile items after dismantling of quota system | | | | . Reduction in Excise duty on polyester filament yarn |
| from 2005. | | | | . Government policies of liberalization and the |
| Further more, Indonesia, Korea's export of synthetic | | | | innovative supports over the past couple of years |
| textiles are turning down compared to previous year. | | | | have been showed tremendous growth |
| Manufacturing capacity of Korea has declined by | | | | . Government's has adopted simplification of |
| more than 30% in the polyester filament sector in 2002 | | | | procedures and formalities for the exporters. |
| and in 2003 and it is expected to turn down further | | | | . The diversified small lot production system dominant in |
| more, which will end with a turn down in their exports | | | | Indian textile industry and can handle better with the |
| of polyester filament fabrics. Due to anti-dumping duty | | | | changes in shape of demands. |
| on the polyester filament fabrics obtained from Taiwan | | | | . Investments in the Jacquard Weaving & Printing |
| and Korea, countries like Brazil, gaining of more | | | | are increasing in the Indian textiles industry, these high |
| opportunity for India will exists as a larger synthetic | | | | value added quality products will add importance in the |
| fabrics exporter. | | | | world market |
| In the world, synthetic textile trade's share of India is | | | | . Market Development Assistance (MDA) have been |
| also seeing increasing. The export share of Indian | | | | further move up for better marketing to focus Latin |
| synthetic textiles in worldwide increased from 0.11% in | | | | America, Africa and Asian regions |
| 1971 to 1.12% in 1991 and more to about 3% in 2002. | | | | . With countries like Sri Lanka, Mercosur, Singapore, |
| This suggests the rising performance of Indian | | | | South Africa, Bangladesh, Thailand and China etc a |
| synthetic textile items in the worldwide market. | | | | series of special trade agreements have been signed |
| Still there is an opportunity to explore new market | | | | which will direct to rapid growth in Indian exports. |
| segments like Latin America and Africa all along with | | | | . Employment Generation: |
| maintaining the share in the established markets like | | | | The textile sector itself has the potential to create 1.2 |
| European Union and USA. At this stage an annual | | | | crore employment opportunity over the next five |
| growth expected to 15% for synthetic textiles and | | | | years. The government would continue to encourage |
| exports are expected to touch US$ 2.5 billion in | | | | growth within the textiles industry as it holds huge |
| 2005-05 and US$ 4.3 billion in 2009-10. | | | | potential for employment and exports. |
| Why India has been emerging as a major BPO | | | | Prospecting Market |
| Centre? | | | | According to a study by Mc Kinsey, India could be the |
| Indian textile industry with its exclusive return is | | | | major supplier to EU and US market after the post |
| projected to emerge as a most important supplier to | | | | quota regime. Though the market share in the post |
| the world. The encouraging aspects, which would | | | | quota regime would determine bases on the various |
| promote India's emergence as a BPO centre for | | | | preserve actions to be taken by US and EU, it is |
| textiles, are as follows: | | | | accepted that there would be a certain uphold against |
| Strengths: | | | | China, which would limit the growing market share of |
| 1. Low labor cost: The industry is mostly labor oriented | | | | China in the worldwide market. |
| and automation has taken place in a large amount | | | | The study also points out that the exports of main |
| process, hence availability of cheap labor forces. | | | | players of Hong Kong, Korea, Indonesia, Taiwan, |
| 2. Low cost of raw material: Cost of raw material | | | | Philippines and Thailand would turn down. |
| sourcing is less in India due to the third largest producer | | | | Indian textile exports are projected to touch US $15 |
| of cotton in the world. | | | | billion in the fiscal 2005-2006 from US $13.6 billion in the |
| 3. Huge Product Selection: Due to many ethnic fashion | | | | last year. This includes a major share of outsourced |
| trends and cultural diversity, it provides more selection | | | | by most important retail chains. The exports are |
| of products. | | | | expected to touch US $ 50 billion by 2010 of, which the |
| 4. Rising domestic textile market: There is an | | | | contribution of garments will be US $ 25 billion. The |
| enormous possible growth of industry due to rising | | | | focused segmented markets for Indian textiles and |
| incomes and middle class population. | | | | apparels are USA, UAE, UK, Germany, France, Italy, |
| 5. Bulky exports: In overseas markets, India has been | | | | Russia, Canada, Bangladesh and Japan. |
| the established exporter of garments. | | | | |