Textilr Industry Scenerio

8/13/2019 Textilr Industry Scenerio

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Textile Industry OverviewTextile Industry is one of the largest and oldest

industries in India. It has a significant role inIndia as it fulfils the essential and

basic need of people. Textile Industry in India stands atunique place and has

maintained a sustainable growth over the years. This is a self-reliant

andindependent industry and has great diversification and versatility. Textile

Industry in Indiaprovides great contribution for the development of economy. It

is the second largest textileindustry in the world after China. It provides ample

employment opportunities to peoplebelonging to all classes. After agriculture

this industry provides employment to maximumnumber of people in India

employing ! million people.Textile Industry represents the rich culture"

tradition" heritage # economic well-being ofcountry with diversified range and

versatility. At the same time industry is competitiveenough to fulfill different

demand patterns of domestic and global mar$ets. Indian TextileIndustry plays

vital role in countrys economic development and contributes %&' to

industrialproduction in the country. Textile Industry contributes around &' of

()*" +' of excisecollections" %,' of employment in industrial sector" and

%' share in countrys export.Indian Textile Industry is valued at /0 1 bn.

The development of Indian Textile Industrystarted in %+,!. This was the year"

for the first time Textile sector was considered as animportant industry and a

separate policy was formulated for sectors development. In the year2333"

4ational Textile *olicy was announced.5ith further development Textile

Industry came out of 6uota 7egime of Import 7estrictionsunder the 8ulti 9iber

Arrangement :89A;. This development came on %st ecause ofthe elimination of quota restrictions" most of the developing

countries now can develop thepotential mar$et at both domestic and

international level. These countries can develop theindustry expertise and can

have competitive advantage through implementing newtechnology" more s$illed

labor will improved distribution channel" cost effective operationand production

with greater value addition in each step of value chain. 8oreover it will helpfor

9oreign )irect Investment in industry that will create great opportunity to

strengthen thesector. 0ome of the strengths of Indian Textile Industry are large

and potential domestic andinternational mar$et" large pool of s$illed and cheap

labor" well-established industry"promising export potential etc.

2. ?I0TO7@ O9 TBTI4o one $nows when exactly the spinning and

weaving of textile began. It has been said thatpeople $new how to weave even2D333 years ago. This was even before humans were able todomesticate


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animals. The oldest actual fragment of cloth found was in southern

Tur$ey.*eople used fibers found in nature and hand processes to ma$e fibers

into cloth. ven thoughhigh technology was not available" s$illed weavers

created a wide variety of fabrics. )yeingof fabrics was done to satisfy the

universal human need for beauty.5ithin time" more complex social and political

organi=ation of people evolved. 5ith thegrowth of cities and nations"

improvements in technology came into place and there was asubstantial

development in the international trade" both of which involved textiles.Chinese

textile was considered to be the most significant in international trade.

?istorianshave claimed that sil$ from China has reached ancient (reece and

7ome along a trade routecalled the 0il$ 7oad in the latter part of the second

century >.C. and gypt in %333 >.C. The7omans also imported cotton from

nearby gypt and from India. Archeologists have foundfacilities for dyeing and

finishing cotton fabrics in settlements throughout the 7oman world.)uring the

middle ages" the production and trading of the plant called Ewoad" an

importantsource of dye" was a highly developed industry. )uring the fifteenth

century" Trade 9airs insouthern 9rance provided a place for the active exchange

of wools from ngland and sil$sfrom the 8iddle ast. The economic activities

surrounding these events gave rise to the firstinternational ban$ing

arrangements. ven the discovery of America was a result of the desireof

uropeans to find a faster route not only to the spices but also to the textiles of

the Orient.Textile trade quic$ly too$ root in America" as colonists sold native

dyes such as indigo andcochineal to urope and bought cottons from India.

Although advances were being made inthe technology of textile production" the

manufacture of cloth in 5estern urope in %D33 wasstill essentially a hand

process. @arns were spun on a spinning wheel and fabrics were wovenby hand-

operated looms.A maFor reorgani=ation of manufacturing of a variety of goods

occurred during the latter halfof the %D33s in 5estern urope. These changes"

$nown as the Industrial E7evolution" alterednot only technology" but also

social" economic" and cultural life. The production of textileswas the first area

to undergo industriali=ation during the seventeenth and eighteenth centuriesas

the result of an economic crisis. (ood quality textile products" produced

inexpensively inIndia and the 9ar ast" were gradually replacing uropean

goods in the international mar$et.

. In >ritain" it became imperative that some means be found to increase

domestic production"to lower costs" and to improve the quality of textiles. Thesolution was found in thesubstitution of machine or nonhuman power for hand


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processes and human power.8any important inventions" most importantly

spinning machines" automatic looms" and thecotton gin" improved the output

and quality of fabrics. These inventions provided thetechnological base for the

industriali=ation of the textile industry. ach invention improvedone step of the

process. 9or example" an improvement that increased the speed of

spinningmeant that looms were needed that consumed yarn more rapidly. 8ore

rapid yarn productionrequired greater quantities of fiber. The growth of the

textile industry was further hastened bythe use of machines that were driven

first by waterpower" then by steam" and finally byelectricity. The textile

industry was fully mechani=ed by the early part of the nineteenthcentury. The

next maFor developments in the field were to ta$e place in the

chemistEslaboratory. xperimentation with the synthesis of dyestuffs in the

laboratory rather than fromnatural plant materials led to the development and

use of synthetic dyes in the latter half ofthe nineteenth century. Other

experiments proved that certain natural materials could bedissolved in chemical

solvents and re-formed into fibrous form. >y %+%3" the first plant

formanufacturing rayon had been established in the /nited 0tates.The

manufacture of rayon mar$ed the beginning of the manufactured textile fibers

industry.0ince that time" enormous advances have been made in the technology

for every field in thetextile industry. Today" the textile industry utili=es a

complex technology based on scientificprocesses and vast economic

organi=ations.5ith the application of advanced technology to the textile field"

textile use has expandedfrom the traditional areas of clothing and home

furnishings into the fields of construction"medicine" aerospace" sporting goods"

and industry. These applications have been madepossible by the ability of

textile scientists to utili=e textile fibers" yarns" and fabrics forspecific uses. At

the same time that textile technology is ma$ing strides in new directions"

thefabrics that consumers buy for clothing and household use also benefit from

the developmentof new fibers" new methods of yarn and fabric construction"

and new finishes for existingfibers and fabrics.Today" a huge international

industrial complex encompasses the production of fiber"spinning of yarns"

fabrication of cloth" dyeing" finishing" printing" and manufacture of goodsfor

purchase. Consumers purchase many different products made of textiles. The

story of the

&. Fourney that these products ma$e as they progress from fiber to yarn to fabric

to finishedproduct is not Fust the story of spinning yarns" weaving or $nittingfabric" or constructing theend product. It is also the story of a complex networ$


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of interrelated industries.?I0TO7@ O9 I4)IA4 TBTI I4)/0T7@The

history of textiles in India dates bac$ to nearly five thousand years to the days

of the?arappan civili=ation. vidences that India has been trading sil$ in return

for spices from the2nd century have been found. This shows that textiles are an

industry which has existed forcenturies in our country. 7ecently there has been

a si=eable increase in the demand for Indiantextiles in the mar$et. India is fast

emerging as a competitor to China in textile exports. The(overnment of India

has also reali=ed this fact and lowered the customs duty and reduced

therestrictions on the imported textile machinery. The intention of the

governmentEs move is toenable the Indian producers to compete in the world

mar$et with high quality products. Theresults of the governmentEs move can be

visible as Indian companies li$e Arvind 8ills"8afatlal" (rasimG 7eliance

Industries have become prominent players in the world. TheIndian textile

industry is the second largest in the world-second only to China. The

othercompeting countries are Horea and Taiwan. Indian Textile constitutes !'

of the totalexports of our country.The history of apparel and textiles in India

dates bac$ to the use of mordant dyes and printingbloc$s around 333 >C. The

foundations of the Indias textile trade with other countriesstarted as early as the

second century >C. A hoard of bloc$ printed and resist-dyed fabrics"primarily

of (uFarati origin" discovered in the tombs of 9ostat" gypt" are the proof of

largescale Indian export of cotton textiles to the gypt in medieval

periods.)uring the %th century" Indian sil$ was used as barter for spices from

the western countries.Towards the end of the %Dth century" the >ritish ast India

Company had begun exports ofIndian sil$s and several other cotton fabrics to

other economies. These included the famousfine 8uslin cloth of >engal" Orissa

and >ihar. *ainted and printed cottons or chint= waswidely practiced between

India"


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unorgani=ed industry even a few years bac$" but the scenario started

changingafter the economic liberali=ation of Indian economy in %++%. The

opening up of economygave the much-needed thrust to the Indian textile

industry" which has now successfullybecome one of the largest in the world.

India textile industry largely depends upon the textile manufacturing and export.

It alsoplays a maFor role in the economy of the country. India earns about 2D'

of its total foreignexchange through textile exports. 9urther" the textile industry

of India also contributes nearly%&' of the total industrial production of the

country. It also contributes around ' to the()* of the country. India textile

industry is also the largest in the country in terms ofemployment generation. It

not only generates Fobs in its own industry" but also opens upscopes for the

other ancillary sectors. India textile industry currently generates employmentto

more than ! million people. It is also estimated that" the industry will generate

%! millionnew Fobs by the year 23%!India is a traditional textile -producing

country with textiles in general" and cotton inparticular" being maFor industries

for the country. India is among the worlds top producers ofyarns and fabrics"

and the export quality of its products is ever increasing. Textile Industry isone

of the largest and oldest industries in India. Textile Industry in India is a self-

reliant andindependent industry and has great diversification and versatility. The

textile industry can bebroadly classified into two categories" the organi=ed mill

sector and the unorgani=eddecentrali=ed sector.The organi=ed sector of the

textile industry represents the mills. It could be a spinning mill ora composite

mill. Composite mill is one where the spinning" weaving and

processingfacilities are carried out under one roof. The decentrali=ed sector is

engaged mainly in theweaving activity" which ma$es it heavily dependent on

the organi=ed sector for their yarnrequirements. This decentrali=ed sector is

comprised of the three maFor segments vi=." power

. loom" handloom and hosiery. In addition to the above" there are readymadegarments" $hadias well as carpet manufacturing units in the decentrali=ed

sector.The Indian Textile Industry has an overwhelming presence in the

economic life of thecountry. It is the second largest textile industry in the world

after China. Apart fromproviding one of the basic necessities of life i.e. cloth"

the textile industry contributes about%&' to the countrys industrial output and

about %D' to export earnings. After agriculturethis industry provides

employment to maximum number of people in India employing !million

people. >esides" another !3 million people are engaged in allied activities. Indiais thelargest producer of


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producer of Cottonand Cellulosic 9ibers@arn and !th largest producer of

0ynthetic [email protected] main obFective of the textile policy 23%% is to

provide cloth of acceptable quality atreasonable prices for the vast maFority of

the population of the country" to increasinglycontribute to the provision of

sustainable employment and the economic growth of the nationGand to compete

with confidence for an increasing share of the global mar$et. Indias

textileindustry is considered a pioneer in the industry" as the industriali=ation of

India in other areasis managed by funds generated by the textile machinery

industry. ?owever" since thebeginning of liberali=ation in %++2 to %+D3" the

industry tends to protect domestic producersof cotton with a clear obFective

continuous erosion of its prosperity.*rospectConsidering the continual capital

investments in the textile industry" the (ovt. of India mayextend the

Technology /pgradation 9und 0cheme :T/90; by the end of the %%th 9ive

@ear*lan :till 23%%-23%2;" in order to support the industry. Indian textile

industry is massivelyinvesting to meet the targeted output of 1,!bn by the end

of 23%3" aiming exports of 1!3bn.There is huge development foreseen in Indian

textile exports from the 1%Dbn attained in233!-3 to 1!3bn by 233+-%3. The

estimation for the exports in the current financial year isabout 1%+bn. There is

substantial potential in Indian exports of technical textiles and hometextiles" as

most uropean companies want to set up facilities near-by the emerging

mar$ets"such as China and India.The global demand for apparel and woven

textiles is li$ely to grow by 2! percent by year23%3 to over !mn tons" and Asia

will be responsible for ,! percent output of this growth.The woven products

output will also rise in Central and 0outhern American countries"

D. however" at a reasonable speed. On the other hand" in maFor developed

countries" the outputof woven products will remain stable. 5eaving process is

conducted to ma$e fabrics for abroad range of clothing assortment" including

shirts" Feans" sportswear" s$irts" dresses"protective clothing etc." and also used innon-apparel uses li$e technical" automotive" medicaletc.It is been forecasted that

the woven textile and apparel mar$ets will sustain their growth fromcurrent till

23%3. The imports of apparel and textiles will rise from developed economies

li$ethe /0A and the western countries of urope and


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sportswear. ?ometextile also contributes considerably in woven fabric in

products assortments li$e curtains"furnishing fabrics" carpets" table cloths

etc.0pecial $ind of woven fabrics are utili=ed in medical as well as industrial

applications. Themedical applications include adhesives" dressing bandages"

plasters etc.The Indian Industry foresees huge demand for industrial woven

products for medical andautomotive applications. )emand for woven fabrics is

anticipated to be rise vertically in thesector of home textiles.4on woven sector

has great future in terms of global demand" thus maFor facilities of cottonyarn

are currently concentrating Fust on home textiles. It is mandatory" that the

pea$management of the cotton yarn manufacturers analy=e the future prospect

and growing graphof demand for non woven products.Anticipating massive

growth in medical and automobile sectors" these sectors assuressubstantial

demand for non woven facilities in India. Albeit" home textiles also will

lurehigher demand" there are specific demands for home textile facilities

also.The Dth 9ive @ear *lan has huge consideration on agricultural growth that

also includescotton textile industry" resulting a prosperous future forecast for

the textile industry in India.Indian cotton yarn manufacturers should rush

forward for Foint ventures and integrated plans

,. for establishing processing and weaving facilities in home textiles and

technical textiles inorder to meet export target of 1!3bn" and a total textileproduction of 1,!bn by 233+-23%3. xpectations are high" prospects are bright"

but capitalising on the new emergingopportunities will be a challenge for textile

companies. 0ome prerequisites to be included inthe globally competing textile

industry areJ Imbibing global best practices Adopting rapidly changing

technologies and efficient processes Innovation 4etwor$ing and better supply

chain management Ability to lin$ up to global value chains.The Indian textiles

industry has established its supremacy in cotton based products" especiallyin the

readymade garments and home furnishings segment. These two segments willbe the$ey drivers of growth for Indian textiles. 7eadymade garment exports

were worth /01 , bnin 9@3 and will cross /01 % bn by the end of 23%3"

assuming a conservative growth of%!' per annum. According to estimates"

investments in textiles are expected to touch /01 %bn by 23%3.The readymade

garment segment will be the principal driver of growth even in the

domesticindustry. The changing preferences of Indian consumers -- from

buying cloth to readymadegarments -- have prompted several companies to

move up the value chain into the finishedproducts segment.0trategicInitiatives>usiness integration -- especially forward integration -- by the larger


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textile companies hasbeen prominent among Indian companies. 0everal

companies that are engaged in fabricmanufacturing are now $een to enter the

readymade garments space. A recent entrant is0iyaram" which launched its

readymade garments range in 4ov 3" following suit with othermaFors li$e

Century Textiles and 7aymond.8ost of the large textile companies have opted

for an inorganic growth strategy to scale upoperations. Acquisition is the most

logical step towards integrating operations and buildingthe value chain.

)omestic acquisitions are on the rise" while acquiring foreign assets is yet

togain traction. 0ome recent domestic acquisitions that have been executed in

233 include

+. H0 # Industries acquisition of )eccan Cooperative" and Ambattur

Clothing ta$ing overCelebrity 9ashions. Another growing phenomenonobserved among Indian textile companiesis the setting up of manufacturing

facilities in strategic regions outside India" where they canavail of duty

concessions and reduce export lead-time. Kodiac and Ambattur Clothing

haveset up facilities in the (ulf region to cut down on export delivery schedules

to the uropeanand /0 mar$ets. 7aymond has set up a unit in >angladesh to

avail of the =ero duty access tothe /.This trend is seen primarily among the

large domestic players" who are trying to achievesi=able scales in order to win

orders from the large retailers in the /0 and /. (lobalretailers prefer large-si=ed companies that can scale up capacities consistently" $eep up withdelivery

schedules and meet their growing demand. They have clear preferences

forcompanies with integrated design" process and manufacturing facilities.An

interesting commonality in countries with successful garment exports is that

they have amuch lower level of sub-contracting than India. A study during the

%++3s found that apparelfirms 9uture Outloo$ BBBIII in India subcontracted

D&' of their output" as compared toonly %%' in ?ong Hong" %,' in China"

23' in Thailand" 2,' in 0outh Horea and ' inTaiwan. Consequently" thesecountries have a wider base of exports and have done very wellin the mar$et for

large volumes of uniform products.9oreign Acquisitions by Indian Textile

Companies *eriod Acquirer Acquired Company icense Of E?ealthtex

Hidswear 8ay 3% Arvind 8ills >rand Of Lf Corpn :/0A;


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%3. 8ay 3! 7eliance (roup ICI *a$istan td :*a$istan; 0hirting Company

ocated In


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development"reforms in labour laws and significant policy support will be

essential.Textile 0ectors in IndiaJThe 8an-8ade 9iber @arn and *owerloom

0ectorJ This part of industry includes fiberand filament yarn manufacturing

units. The *ower looms sector is decentrali=ed and plays avital role in Indian

Textiles Industry. It produces large variety of cloths to fulfill differentneeds of

the mar$et. It is the largest manufacturer of fabric and produces a wide variety

ofcloth. The sector contributes around 2' of the total cloth production in the

country andprovides ample employment opportunities to &., million

people.The Cotton 0ectorJ Cotton is one of the maFor sources of employment

and contributes inexport in promising manner. This sector provides huge

employment opportunities to around!3 million people related activities li$e

Cultivation" Trade" and *rocessing. Indias Cottonsector is second largest

producer of cotton products in the world.The ?andloom 0ectorJ The handloom

sector plays a very important role in the countryseconomy. It is the second

largest sector in terms of employment" next only to agriculture.This sector

accounts for about %' of the total cloth produced in the country

:excludingwool" sil$ and Hhadi;.

%2. The 5oolen 0ectorJ The 5oolen Textile sector is an Organi=ed and

)ecentrali=ed 0ector.The maFor part of the industry is rural based. India is the

Dth largest producer of wool" andhas %.,' share in total world production. Theshare of apparel grade is !'" carpet grade is,!'" and coarse grade is %3' of

the total production of raw wool. The Industry is highlydependent on import of

raw wool material" due to inadequate production.The


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country" while preserving its culturalheritage.0tructure of IndiaMs Cotton Textile

Industry/nli$e other maFor textile-producing countries" Indias textile industry

is comprised mostly ofsmall-scale" non-integrated spinning" weaving" finishing"

and apparel-ma$ing enterprises.This unique industry structure is primarily a

legacy of government policies that havepromoted labor intensive" small-scale

operations and discriminated against larger scale firmsJ Cotton farming and

harvestingJ Cotton is grown in tropical as well as sub tropical area in India.

8ostly the cotton grown in India is from dry lands and crops mostly depend on

the irrigation systems available and not only on the rain water. (inningJ

(inning is the process where cotton fiber is separated from the cotton seed. The

first step in the ginning process is when the cotton is vacuumed into tubes that

carry it to a dryer to reduce moisture and improve the fiber quality. Then it runs

%. through cleaning equipment to remove leaf trash" stic$s and other foreign

matter.(inning is accomplished by one of two methods. Cotton varieties with

shorter stapleor fiber length are ginned with saw gins. This process involves the

use of circularsaws that grip the fibers and pull them through narrow slots. The

seeds are too large topass through these openings" resulting in the fibers being

pulled away from the seed.ong fiber cottons must be ginned in a roller gin

because saw gins can damage theirdelicate fibers.Oil millJ in the operation the

oil is extracted from the cotton seeds that are comingfrom the ginning process.The cotton seeds coming from the ginning unit are thenpassed through the

pressing unit and crude cotton oil is produced. The pressed cottonseed oil ca$e

is supplied as the cattle feed. The crude is further modified as the bio-diesel

which could be used as the one of the energy source. The refined cotton oil

isalso used as the edible oil but it is proved to be unfit for the human

health.0pinningJ 0pinning is the process of converting cotton or manmade fiber

into yarn tobe used for weaving and $nitting. argely due to deregulation

beginning in the mid-%+,3s" spinning is the most consolidated and technicallyefficient sector in Indiastextile industry. Average plant si=e remains small"

however" and technology outdated"relative to other maFor producers. In

23323" Indias spinning sector consisted ofabout %"%& small-scale

independent firms and %"!++ larger scale independent units.5eaving and

HnittingJ 5eaving and $nitting converts cotton" manmade" or blendedyarn into

woven or $nitted fabrics. Indias weaving and $nitting sector remains

highlyfragmented" small scale" and labor-intensive. This sector consists of about

.+ millionhandlooms" ,3"333 N*owerloom enterprises that operate about %.D million looms"and Fust %D"333 looms in the various composite mills.


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N*ower looms are smallfirms" with an average loom capacity of four to five

owned by independententrepreneurs or weavers. 8odern shuttle less looms

account for less than % percent ofloom capacity.9abric 9inishingJ 9abric

finishing :also referred to as processing;" which includesdyeing" printing" and

other cloth preparation prior to the manufacture of clothing" isalso dominated by

a large number of independent" small scale enterprises. Overall"about 2"33

processors are operating in India" including about 2"%33 independent unitsand

233 units that are integrated with spinning" weaving" or $nitting units.

%&. ClothingJ Apparel is produced by about DD"333 small-scale units classified

as domestic manufacturers" manufacturer exporters" and fabricators

:subcontractors;. Composite 8illsJ 7elatively large-scale mills that integrate

spinning" weaving and" sometimes" fabric finishing are common in other maFortextile-producing countries. In India" however" these types of mills now account

for about only percent of output in the textile sector. About 2D composite

mills are now operating in India" most owned by the public sector and many

deemed financially Nsic$. India textile industry is one of the leading in the

world. Currently it is estimated to be around/01 !2 billion and is also proFected

to be around /01 %%! billion by the year 23%2. Thecurrent domestic mar$et of

textile in India is expected to be increased to /01 3 billion by23%2 from the

current /01 &. billion. The textile export of the country was around/01%+.%& billion in 233-3D" which saw a stiff rise to reach /01 22.% in 233D-

3,. The share ofexports is also expected to increase from &' to D' within

23%2. 9ollowing are area"production and productivity of cotton in India during

the last six decadesJ Area in la$h *roduction in la$h bales of %D3 @ield $gs

per@ear hectares $gs hectare%+!3-!% !.&, 3.2 +2%+3-% D.D, !.&%

%2&%+D3-D% D.3! &D. %3%+,3-,% D,.2& D,.3 %D3%++3-+% D&.+ %%D.33

2D2333-3% ,!.D %&3.33 2D,233%-32 ,D.3 %!,.33 3,

%!. 2332-3 D.D %.33 32233-3& D.3 %D+.33 ++233&-3! ,D., 2&.33

&D3233!-3 ,.DD 2&&.33 &D,233-3D +%.&& 2,3.33 !2%233D-3, +&.+ %!.33

!D233,-3+ +.D 2+3.33 !2Though during the year 233,-3+" the industry had

to face adverse agro-climatic conditions" itsucceeded in producing 2+3 la$hs

bales of cotton comparing to %! la$hs bales last year" yetmanaged to retain its

position as worlds second highest cotton producer.conomic issues*rices of

CottonThe 8inimum 0upport *rices of Hapas :0eed cotton; for fair average

quality announced forthe cotton season 233!- 233 :Oct 0ept;" was fixed at

last years level :233&-3!; i.e.7s.%D3- per quintal for medium staple variety


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:9-&%&


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India as a main global outsourcing hub.Competitive advantage # possible

growth in 0ynthetic Textiles 0ector Indias synthetictextile sector is relatively

modern and has a high growth potential which will help India tocoming out as a

maFor outsourcing hub. 5ith a compounded annual growth rate of more

than22' the exports of 889 textiles have stretched out to a level of /0 1%.2

billion in 2332-3starting from small exports in %+!&. The export growth in

2332-3 matches up to the

%D. preceding year was in the harmony of 3 percent" and the 889 textile

sector is the onlysector where the performance has exceeds by the target fixed

for this year by /0 1 %%!million.Indian synthetic textiles are more and more

accomplishing new mar$ets along with $eepingthe mar$et share in the existing

mar$ets. At present Indian synthetic textile exports aretargeting more than %D!countries worldwide" where 8iddle ast accounted for over 2percent of our

exports and the share of the extremely quality conscious in uropean

/nion"approximately 2 percent.Over the years" the Indian 889 textile sector

has built-up an export baseG and the share of889 textile exports in the total

Indian textile export has also been raised" the share movedup from %3.,' in

2333-3% to %%.&' in 233%-32 and more to about %&' in 2332-3.At present

Indian exports of synthetic textiles to /0A are rising at more than +3' yearly.

Ithas also been observed that export growth will be stri$ing for maFor 889textile items afterdismantling of quota system from 233!.9urthermore"

Indonesia" Horeas export of synthetic textiles are turning down compared

toprevious year. 8anufacturing capacity of Horea has declined by more than

3' in thepolyester filament sector in 2332 and in 233 and it is expected to

turn down further more"which will end with a turn down in their exports of

polyester filament fabrics. )ue to anti-dumping duty on the polyester filament

fabrics obtained from Taiwan and Horea" countriesli$e >ra=il" gaining of more

opportunity for India will exists as a larger synthetic fabricsexporter.In theworld" synthetic textile trades share of India is also seeing increasing. The

exportshare of Indian synthetic textiles in worldwide increased from 3.%%' in

%+D% to %.%2' in%++% and more to about ' in 2332. This suggests the rising

performance of Indian synthetictextile items in the worldwide mar$et.0till there

is an opportunity to explore new mar$et segments li$e atin America and

Africaall along with maintaining the share in the established mar$ets li$e

uropean /nion and/0A. At this stage an annual growth expected to %!' for

synthetic textiles and exports areexpected to touch /01 2.! billion in 233!-3!and /01 &. billion in 233+-%3.05OT analysis of the textile industry


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Average cotton yarn spinning cost at xcept spinning" all other segments are

/01 2.! per $g. 5hich is lower than all predominantly in decentrali=ed sector.

the countries including China The rigid labour lawsJ proving a bottlenec$ ow

wagesJ rate at 3.D! /01 per operator particularly to the garment sector. arge

hour as compared to /01 % of China and seasonal orders cannot be ta$en

because the /01 of Tur$ey labour strength cannot be reduced during the

/nique strength in traditional handlooms slac$ season. and handicrafts

Inadequate capacity of the domestic textile 9lexible production system

machinery manufacturing sector. )iverse design base >ig demand and supply

gap in the training facilities in textile sector. Infrastructural bottlenec$s in terms

of power" utility" road transport etc.mployment (enerationThe textile sector

itself has the potential to create %.2 crore employment opportunity over thenext

five years. The government would continue to encourage growth within the

textilesindustry as it holds huge potential for employment and exports.Textile

0ector ContributionJAccording to the Annual 7eport 233+-%3 of the 8inistry of

Textiles" the Indian textileindustry contributes about %& per cent to industrial

production" & per cent to the countrysgross domestic product :()*; and %D per

cent to the countrys export earnings. It providesdirect employment to over !

million people and is the second largest provider ofemployment after

agriculture. According to the 8inistry of Textiles" the cumulative9ifth largest

producer of man-made percentage of total looms as against fibre and yarn world

average of % percent and China" Lertical and hori=ontal integrated textile

*a$istan and Indonesia %! percent" + value chain percent and %3 percent

respectively. 0trong presence in entire textile value ?ighly fragmented and

technology chain from raw material to finished goods bac$ward textile

processing sector (lobally competitive spinning industry ?ighly fragmented

garment industry 2 percent of shuttle less looms as Third largest producer

of cotton processing %,. 0trengths 5ea$nesses 0trong and diverse raw

material base 0tructural wea$nesses in weaving and

%+. production of cloth during April3+-8arch%3 increased by ,. per cent as

compared to the corresponding period of the previous year. Total textile exports

increased to /01 %,. billion during April3+-


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*roduction :II*; datareleased by the Central 0tatistical Organi=ation :C0O;"

cotton textiles have registered agrowth of !.! per cent during April-8arch

233+-%3" wool" sil$ and man-made fibre textileshave registered a growth of ,.2

per cent and textile products including wearing apparel haveregistered a growth

of ,.! per cent.Technical Textile 0egmentJAccording to the 8inistry of

Textiles" technical textiles are an important part of the textileindustry. The

5or$ing (roup for the leventh 9ive @ear *lan has estimated the mar$et si=eof

technical textiles to increase from /01 !.2+ billion in 233-3D to /01%3.

billion in 23%%-%2" without any regulatory framewor$ and to /01 %!.% billion

with regulatory framewor$.The 0cheme for (rowth and )evelopment of

Technical Textiles aims to promote indigenousmanufacture of technical textile

to leverage global opportunities and cater to the domesticdemand.Current

0tatusThe textile industry holds significant status in the India. Textile industry

provides one of themost fundamental necessities of the people. It is an

independent industry" from the basicrequirement of raw materials to the final

products" with huge value-addition at every stage ofprocessing.Today textile

sector accounts for nearly %&' of the total industrial output. Indian fabric is

indemand with its ethnic" earthly colored and many textures. The textile sector

accounts about3' in the total export. This conveys that it holds potential if one

is ready to innovate.The textile industry is the largest industry in terms of

employment economy" expected togenerate %2 million new Fobs by 23%3. It

generates massive potential for employment in thesectors from agricultural to

industrial. mployment opportunities are created when cotton iscultivated. It

does not need any exclusive (overnment support even at present to go further.

23. Only thing needed is to give some directions to organi=e people to get

enough share of theprofit to spearhead development.0egmentsTextile industry is

constituted of the following segments 7eadymade (arments Cotton Textiles

including ?andlooms :8illmade *owerloom ?andloom; 8an-made Textiles0il$ Textiles 5oollen Textiles ?andicrafts including Carpets Coir


17/66

at the upper stratum of the chain do is" to apply this fabric into a design

withsome imagination and earn in millions. The straight yards simple saree"

drape in with ablouse with embroideries and bead wor$" then it becomes a

designerQRs ensemble. 9or anaverage person" it can be a slant cut while giving it

a shape" which can double the profit.8aybe" the 3 ' credit that the industry is

ta$ing for its contribution to Indian economy asgood as 3 ' this way. Though

it is an industry" it has to innovate to prosper. It has all theingredients to go

ahead.Textile exports are targeted to reach 1!3 billion by 23%3" 12! billion of

which will go to the/0. Other mar$ets include /A" /H" (ermany" 9rance"

Italy" 7ussia" Canada" >angladeshand ecause of low labor rates the

manufacturing cost in textile automatically comes down to very reasonablerates. The installed capacity of spindles in India contributes for 2&' share of the


18/66

world" and it is one of the biggest exporters of yarns in the global mar$et.

?aving modern functions and favourable fiscal policies" it accounts about 2!'

of the world trade in cotton yarn.

22. The apparel industry is largest foreign exchange earning sector" contributing%2' of the countrys total exports. The garment industry is very diverse in si=e"

manufacturing facility" type of apparel produced" quantity and quality of output"

cost" requirement for fabric etc. It comprises suppliers of ready-made garments

for both" domestic or export mar$ets.5ea$ness8assive 9ragmentationJA maFor

loop-hole in Indian textile industry is its huge fragmentation in industry

structure"which is led by small scale companies. )espite the government

policies" which made thisdeformation" have been gradually removed now" but

their impact will be seen for some timemore. 0ince most of the companies aresmall in si=e" the examples of industry leadership arevery few" which can be

inspirational model for the rest of the industry.The industry veterans portrays

the present productivity of factories at half to as low as one-third of levels"

which might be attained. In many cases" smaller companies do not have

thefiscal resources to enhance technology or invest in the high-end engineering

of processes.The s$illed labor is cheap in absolute termsG however" most of this

benefit is lost by smallcompanies.The uneven supply base also leads barriers in

attaining integration between the lin$s insupply chain. This issue createsuncontrollable" unreliable and inconsistent performance.*olitical and

(overnment )iversityJThe reservation of production for very small companies

that was imposed with an intention tohelp out small scale companies across the

country" led substantial fragmentation that distortedthe competitiveness of

industry. ?owever" most of the sectors now have been de-reserved"and maFor

entrepreneurs and corporate are putting-in huge amount of money in

establishingbig facilities or in expansion of their existing plants.0econdly" the

foreign investment was $ept out of textile and apparel production. 4ow"the(overnment has gradually eliminated these restrictions" by bringing down

import duties oncapital equipment" offering foreign investors to set up

manufacturing facilities in India. Inrecent years" India has provided a global

manufacturing platform to other multi-national

2. companies that manufactures other than textile productsG it can certainly

provide a base fortextiles and apparel companies.)espite some motivating step

ta$en by the government" other problems still sustains li$evarious taxes and

excise imbalances due to diversification into ! states and /nionTerritories.


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?owever" an outline of LAT is being implemented in place of all other

taxdiversifications" which will clear these imbalances once it is imposed

fully.abour awsJIn India" labour laws are still found to be relatively

unfavorable to the trades" with companieshaving not more than ideal model to

follow a hire and fire policy. ven the companies haveoften bro$en their

business down into small units to avoid any trouble created by

labourunioni=ation.In past few years" there has been movement gradually

towards reforming labour laws" and itis anticipated that this movement will

uphold the environment more favourable.)istant (eographic ocationJThere

are some high-level disadvantages for India due to its geographic location. 9or

theforeign companies" it has a global logistics disadvantage due the shipping

cost is higher andalso ta$es much more time comparing to some other

manufacturing countries li$e 8exico"Tur$ey" China etc. The inbound freight

traffic has been also low" which affects cost ofshipping - though" movement of

containers are not at reasonable costs.ac$ of trade membershipsJIndia is

serious lac$ing in trade pact memberships" which leads to restricted access to

theother maFor mar$ets. This issue made others to impose quota and duty" which

put scissors onthe sourcing quantities from India.OpportunitiesIt is anticipated

that Indias textile industry is li$ely to do much better. 0ince the consumptionof

domestic fibre is low" the growth in domestic consumption in tandem is

anticipated with()* of to , ' and this would support the growth of the local

textile mar$et at about to D' a year.

2&. India can also grab opportunities in the export mar$et. The industry has the

potential ofattaining 1&bn export earnings by the year 23%3. The regulatory

polices is helping out toenhance infrastructures of apparel par$s" 0peciali=ed

textile par$s" *Ks and O/s.The (overnment support has ensured fast

consumption of clothing as well as of fibre. Asingle rate will now be prevalent

throughout the country.The Indian manufacturers and suppliers are improvingdesign s$ills" which include differentfabrics according to different mar$ets.

Indian fashion industry and fashion designers aremar$ing their name at

international platform. Indian sil$ industry that is $nown for its fineand

exclusive brocades" is also adding massive strength to the textile industry.The

industry is being moderni=ed via an exclusive scheme" which has set aside 1!bn

forinvestment in improvisation of machinery. International brands" such as

evis" 5al-8art"


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1bn in the coming year. The clothing giant from urope"(A* is also sourcing

from India.AnticipationAs a result of various initiatives ta$en by the

government" there has been new investment of7s.!3"333 crore in the textile

industry in the last five years. 4ine textile maFors invested7s.2"33 crore and

plan to invest another 7s."&33 crore. 9urther" Indias cotton

productionincreased by !D' over the last five yearsG and million additional

spindles and 3"333shuttle-less looms were installed.9orecast till 23%3 for

textiles by the government along with the industry and xport*romotion

Councils is to attain double the ()*" and the export is li$ely attain 1,!bn.

Theindustry is anticipated to generate %2mn new Fobs in various sectors.7ecent

TrendsThe mood in the Indian textile industry given the phase-out of the quota

regime of the 8ulti-9ibre Arrangement :89A; is upbeat with new investment

flowing in and increased orders forthe industry as a result of which capacities

are fully boo$ed up to April 233!. As a result ofvarious initiatives ta$en by the

government" there has been new investment of 7s.!33 billionin the textile

industry in the last five years. 4ine textile maFors invested 7s.2 billion and

2!. plan to invest another 7s.& billion. 9urther" Indias cotton production

increased by !D' overthe last five yearsG and million additional spindles and

3"333 shuttles-less looms wereinstalled.The industry expects investment of

7s.%"&33 billion in this sector in the post-89A phase. ALision 23%2 for textilesformulated by the government after intensive interaction with theindustry and

xport *romotion Councils to capitalise on the upbeat mood aims to

increaseIndias share in worlds textile trade from the current &' to ,' by 23%2

and to achieve exportvalue of /0 1 !3 billion by 23%2 Lision 23%2 for textiles

envisages growth in Indian textileeconomy from the current /0 1 D billion to 1

,! billion by 23%2G creation of %2 million newFobs in the textile sectorG and

modernisation and consolidation for creating a globallycompetitive textile

industry. The textile industry is undergoing a maFor reorientation towardsnon-clothing applications of textiles" $nown as technical textiles" which are growing

roughlyat twice rate of textiles for clothing applications and now account for

more than half of totaltextile production. The processes involved in producing

technical textiles require expensiveequipments and s$illed wor$ers and are" for

the moment" concentrated in developedcountries. Technical textiles have many

applications including bed sheetsG filtration andabrasive materialsG furniture and

healthcare upholsteryG thermal protection and blood-absorbing materialsG

seatbeltsG adhesive tape" and multiple other speciali=ed productsandapplications.


21/66

To enable 0mallTo equip the textile industry to withstand the pressures of

import penetration" and maintain dominance of the growing domestic mar$et.

To secure a D percent share in global textile trade by the end of the leventh

9ive @ear *lan.

To ensure the growth of the Indian textile industry at %percent per annum in value terms" to /01 %%! billion" by the end of the

leventh 9ive @ear *lan. To build world class" state-of-the-art"

manufacturing capacities and achieve a predominant global standing in

manufacture and export of textiles and clothing. 2. Lision 0tatement for

textile industry:233D-23%2; # 8edium nterprises :08s; to achieve

competitiveness to face the global scenario with confidence.

To provide a conducive policy environment which will encourage innovation"

augment 72D. # To establish the Indian textiles industry as a producer of

internationally competitive value added products.) efforts" and enhance

productivity through the upgradation of technology" manufacturing processes

and the development of human resources.

2,. 9uture of Textile Industry in IndiaThe textile industry in India is one of the

flourishing sectors of Indian economy. It contributesmore than %' to industrial

output" %.' to export revenues and &' to the nations ()*.In the year

23%3" the industry is estimated to produce %2 million Fobs with an investment

of/01 billion in the fields of textiles equipments and structure" and garment

manufacturingby the end of 23%!./nion 8inistry of Textiles certified Apparel

xport *romotion Council :A*C; has ta$en theresponsibility to motivate the

foreign investors to invest in Indian Textile industry byexhibiting it massive

unexplored domestic mar$et. It has also formulated and endorsed themotto of

Ncome" invest" produce and sell in India . /nder this the ministry has decided

tosend it representatives to (ermany" 0wit=erland" 9rance" Italy and /0. The

obFective is totrigger the foreign investment towards instituting textile units in

India by offering numerousallowances to global investor li$e low-priced

wor$force and intellectual right fortification.The government of India has also

ta$en few initiatives to promote the textile industry bypermitting %33' 9oreign

)irect Investment in the mar$et. Owing to the upright and straightincorporated

textiles price chain" the Indian textile industry symboli=es a strong existence

inthe complete value chain from raw commodities to finished products. The

0ynthetic and7ayon Textile xport *romotion Council :07T*C; has ta$en all

the required steps to meetthe target of doubling the synthetic textile exports in


22/66

India to /01 .2 billion by sei=ing &'of mar$et share by 9@ 23%%-%2.(lobal

Textile 8ar$et OverviewThe global textile mar$et value is estimated to be /01

&.!3 trillion during the year 233,. It isobserved that clothing accounted for

about 3' of the mar$et" while textile accounted for thebalance &3'. The

global textile industry grew at an estimated average annual rate of about2.!'

during 2333-233,. The global slowdown has also affected Textile industry

adversely.The global fibre demand has decreased by one percent in 233,. It is

also observed that theglobal textile and clothing industry can be broadly divided

into 4atural 9ibre and 8anmade9ibre industry. The 4atural 9ibre industry

includes Cotton" 5ool" 0il$ and


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grow S 23' p.a. as *olyester offers high tenacity an strength which is most

suitable for such applications. ower per capita consumptionJ The average per

capita consumption :*CC; of fabric in India is much lower than in its

neighbouring countries. India has a huge potential mar$et" given that its *CC is

as low as %.& $g as compared China :! $gs;" *a$istan :

3. $gs; and Indonesia :! $gs;. India has the advantage of a large an growing

domestic mar$et" and a good ()* growth. 7apid urbani=ationJ higher spend on

clothingJ In India" out of the total population" about D3' is rural. >ehaviour

patterns suggest that most of the fabric demand in this segment is need-based.

The urban demand" on the other hand" is also driven by fashion trends and

favours more sophisticated textiles" and variety in designs and colours. The

average urban spend on apparel is higher than rural spend. ?owever" over theyears" the clothing pattern in India has shifted. 8ens clothing consumption has

moved from the traditional cotton based wear to synthetic fabrics. Cotton dhotis

are giving way to trousers :mostly made of polyester or polyester blends;.

i$ewise" women are moving from cotton saris to synthetic sarisdresses. evy

of Anti-dumping duty on import of *O@ to lower threats of import leading to

availability of better contribution to domestic manufacturers. 7apid additions in

downstream processing facilities leading to incremental demand. 8anufacturing

of manmade fibres globally is getting shifted mainly to China and India. AsChinas domestic consumption almost matches its production" India will be able

to increase its presence in the International mar$et.Heeping in view the strong

fundamentals mentioned above" C7I0I49AC has proFected the*O@ industry

grew at a healthy D.,' Compounded Annual (rowth 7ate :CA(7;.7aising

concern over Indias share in the /0 imports of technical textiles and non-

wovenfabric which is way behind China" industry body 9icci today said

domestic industry needsresearch and development :7#); support.Indias share

in the /0 imports of special purpose fabric :technical textiles; and non-wovenfabrics was merely 2. per cent and %.2 per cent" respectively in 233+

compared to Chinasshare of %! per cent and %2 per cent" a 9icci study

said.India needs to strengthen its capabilities to tap this growing mar$et as

technology-intensiveproducts are the future" it said.The study said there is a

need to formulate a comprehensive research and development:7#); policy for

the Indian textile industry. The chamber has submitted itsrecommendations to

the 8inistry of Textiles in this regard. The study pointed out that only a


24/66

%. small portion of revenue of the Indian textile industry is derived by

innovative or technologyintensive products. The policy should aim at

increasing the countrys share of advancetechnology-based products and high

value-added items in global mar$et to seven per cent innext five years from less

than two percent currently.The chamber has also recommended setting-up of a

4ational Textiles 7esearch Council withseed money of 7s 3 crore and an

annual grant of 7s %3 crore. The council could be the apexbody for underta$ing

and providing direction to research in textiles in the country" the studysaid.9icci

said that the policy should provide a special focus on eco-friendly textiles that

wouldhelp in reducing carbon footprint. )evelopment of eco-friendly and

sustainable lin$ages is$ey to competitiveness. Also" the competitive edge for

Indian textile industry will come fromadoption of new and advance materials

with functional properties :li$e anti-microbial fabricsfor patients dress; in the

textiles sector" it said.(overnment Initiative for Textile IndustryJAccording to

the 8inistry of Textiles" investment under the Technology /pgradation

9und0chemes :T/90; has been increasing steadily. )uring the year 233+-%3"

%,+ applicationshave been sanctioned at a proFect cost of /01 !.2 billion. The

cumulative progress as on)ecember %" 233+" includes 2D"&DD applications

sanctioned" which has triggered investmentof /01 &!.! billion and amount

sanctioned under T/90 is /01 %,.+ billion of which /01%.& billion has been

disbursed so far till the end of April" 23%3.8oreover" in 8ay 23%3" the 8inistry

of Textiles informed a parliamentary panel that itproposes to allocate /01 D,!.2

million for the moderni=ation of the textile industry.The 0cheme for Integrated

Textile *ar$ :0IT*; was approved in


25/66

been provided for development of mega clusters in handlooms" handicrafts and

powerloom sectors. Customs duty at & per cent for import of readymade

garments for retail sales has been withdrawn. The micro small medium

enterprises in textiles sector have been given full C4LAT credit on capital

goods in one installment in the year of receipt of such goods and the facility of

payment of excise duty in quarterly basis.InvestmentsAccording to the 8inister

for Textiles" 8r )ayanidhi 8aran" around /01 !.! billion offoreign

investment is expected to be made in India in the textile sector over the next

fiveyears.The textiles industry has attracted foreign direct investment :9)I;

worth /01 ,%D.2 millionbetween April 2333 and 8arch 23%3" according to

data released by the )epartment ofIndustrial *olicy and *romotion. 0 Humars

4ationwide has formed a Foint venture :


26/66

leading position in the domestic mar$et by doing away with import penetration.

InFecting competitive spirit by the liberalisation of stringent controls.

ncouraging 9oreign )irect Investment as well as research and development in

this sector. 0tressing on the diversification of production and its /pgradation

ta$ing into consideration the environmental concerns. )evelopment of a firm

multi-fibre base along with the s$ill of the weavers and the craftsmen.0uch

goals are set to meet the following targetsJ The si=e of textile and apparel

exports must reach a level of /0 1!3 billion by the year 23%3. The Technology

/pgradation 9und 0cheme should be implemented in a strict manner.

&. The garments industry should be removed from the list of the small scale

industry sector. The handloom industry should be boosted and encouraged to

enter into foreign ventures so as to compete globally. The 4ational Textile*olicy has also formulated rules pertaining to certain specific sectors. 0ome of

the most important items in the agenda happen to be the availability and

productivity along with the quality of the raw materials. 0pecial care is also

ta$en to curb the fluctuating price of raw materials. 0teps have also been ta$en

to raise sil$ to the international standard.*reamble To comprehend the purpose

of textile industry that is to provide one the most basic needs of the people and

promote its sustained growth to improve the quality of life. To ac$nowledge

textile industry as a self-reliant industry" from producing raw materials todelivery of finished productsG and its maFor contribution to the economy of the

country. To understand its immense potentiality for creating employment

opportunities in significant sectors li$e agriculture" industry" organi=ed sector"

decentrali=ed sector" urban areas and rural areas" specifically for women and

deprived. To recogni=e the Textile *olicy of %+,!" this boosted the annual

growth rate of cloth production by D.%'" export of textile by %.2' and per

capita availability of fabrics by .'. To analy=e the issues and problems of

textile industry and the guidelines provided by the expert committee set up forthis specific purpose. To give a different specification to the obFectives and

thrust areas of textile industry. To produce good quality cloth for fulfilling the

demands of the people with reasonable prices. To maintain a competitive global

mar$etThrust areas(overnment of India is trying to promote textile industry by

giving emphasis on several areasof textile" which are as belowJ Innovative

mar$eting strategies

!. )iversification of product nhancement of textile oriented technology

6uality awareness Intensifying raw materials (rowth of productivity Increase


27/66

in exports 9inancing arrangements Creating employment opportunities ?uman

7esource )evelopmentfforts(overnment of India has set some targets to

intensify and promote textile industry. Tomateriali=e these targets" efforts are

being made" which are as followsJ Textile and apparel exports will reach the /0

1 D3 billion mar$ by 23%! All manufacturing segments of textile industry will

come under T/90 : Technology /pgradation 9und 0cheme; Increase the

quality and productivity of cotton. The target is to increase !3' productivity

and maintain the quality to international standards stablish the Technology

8ission on Fute with an obFective to increase cotton productivity of the country

ncourage private organi=ation to provide financial support for the textile

industry *romote private sectors for establishing a world class textile industry

ncourage handloom industry for producing value added items ncourage

private sectors to set up a world class textile industry comprising various textile

processing units in different parts of India 7egenerate functions of the T7A

:Textile 7esearch Associations; to stress on research wor$s.(overnment policy

on cotton and man-made fiber

. One of the principal targets of the government policy is to enhance the

quality and productionof cotton and man-made fiber. 8inistry of Agriculture"

8inistry of Textiles" cotton growingstates are primarily responsible for

implementing this target.Other thrust areas %. Information TechnologyJInformation technology plays a significant role behind the development of

textile industry in India. IT :Information Technology; can promote to establish a

sound commercial networ$ for the textile industry to prosper. 2. ?uman

7esource )evelopmentJ ffective utili=ation of human resource can strengthen

this textile industry to a large extent. (overnment of India has adopted some

effective policies to properly utili=e the manpower of the country in favour of

the textile industry. . 9inancing arrangementJ (overnment of India is also

trying to encourage talented Indian designers and technologists to wor$ forIndian textile industry and accordingly government is setting up venture capital

fund in collaboration with financial establishments.Acts0ome of the maFor acts

relating to textile industry include Central 0il$ >oard Act" %+&, The Textiles

Committee Act" %+ The ?andlooms Act" %+,! Cotton Control Order" %+,

The Textile /nderta$ings Act" %++!(overnment of India is earnestly trying to

provide all the relevant facilities for the textileindustry to utili=e its full potential

and achieve the target. The textile industry is presentlyexperiencing an average

annual growth rate of +-%3' and is expected to grow at a rate of%' in value"


28/66

which will eventually reach the target of /0 1 %%! billion by 23%2. Theclothing

and apparel sector are expected to grow at a rate of 2% 't in value terms.

D. Tariff policyIndia # /0 have reached on an Agreement for reciprocal

mar$et access commitments forTextiles and Apparel with the negotiation of the5TO Agreement on Textile # Clothing. Itprovides elimination of 6uota

system of Textiles # Apparel from %st


29/66

and apparel. India removed restrictions on D%! tariff items as of %st

April2333.Custom *roceduresJ8ar$ing" abelling" and *ac$aging

7equirementsJ 8ar$ing" abelling" and *ac$aging7equirements for Textile

products are technically complex and difficult to implement.According to textile

regulation passed on 22nd an$ of India

provides Indian xporters *re-0hipment 9inancing through commercial ban$s

for purchasing raw materials and pac$agingmaterials by presenting etter of

Credit. 7>I also provides *ost-0hipment 9inancing throughcommercial ban$s

at preferential rates by presenting export documents.xport and 0pecialconomic KonesJ (ovt. of India has established xport *rocessing

Kones:*Ks; and 0pecial conomic Kones :0Ks;. In *Ks units can import

goods free of customduty. There is !-year tax holiday to any industrial unit in

*Ks. (ovt. has allowed %33'9oreign ownership of units under *Ks and

0Ks. The (ovt. considers 0Ks as foreignterritory for trade and tariff purpose.

/nits under 0Ks may engage in 8anufacturing"Trading and 0ervices. /nits

are exempt from routine chec$ing of exports by customs" andthey can sell in the

domestic mar$et on payment of duty as applicable to imported goods.)uty)rawbac$ 0chemeJ The basic obFective of this scheme is to reduce the indirect


30/66

taxes onexports. xporters can get refund of the excise and import duty.

Through this scheme theycan be more competitive and have more potential

mar$et.7eform measures and *olicy initiativesJThe Textile Industry came out of

6uota 7egime of Import 7estrictions under the 8ulti 9ibreArrangement

:89A;. This development came on %st


31/66

&%. The 8ulti-9ibre Agreement :89A;" that had governed the extent of textile

trade betweennations since %+2" expired on %


32/66


33/66

*rivate *artnership :***;and envisages engaging of a professional agency for

proFect execution. The 8inistry ofTextiles :8OT; would implement the

0cheme through 0pecial *urpose Lehicles :0*Ls;.4ational Textile Corporation

td. :4TC;4ational Textile Corporation td. :4TC; is the single largest Textile

Central *ublic 0ectornterprise under 8inistry of Textiles managing !2 Textile

8ills through its + 0ubsidiaryCompanies spread all over India. The

headquarters of the ?olding Company is at 4ew )elhi.The strength of the

group is around 22333 employees. The annual turnover of the Companyin the

year 233&-3! was approximately 7s., crores having capacity of %% la$hs

0pindles"%!33 ooms producing &!3 la$h Hgs of @arn and %,! la$h 8trs of

cloth annually.Cotton Corporation of India td. :CCI;The Cotton Corporation

of India td :CCI;" 8umbai" is a profit-ma$ing *ublic 0ector/nderta$ing under

the 8inistry of Textiles engaged in commercial trading of cotton. The

&&. CCI also underta$es 8inimum 0upport *rice Operation :80*; on behalf of

the (overnmentof India.(OL7484T 7(/ATIO40 A4)

0/**O7T(overnment InitiativesThe textile industry" being one of the most

significant sectors in the Indian economy" hasbeen a $ey focus area for the

(overnment of India. A number of policies have been put inplace to ma$e the

industry more competitive. The Technology /pgradation 9und 0cheme

:T/90;J 7ecognising that technology is the $ey to being competitive in theglobal mar$et" the (overnment of India established the Technology

/pgradation 9und 0cheme :T/90; to enable firms to access low-interest loans

for technology upgradation. /nder this scheme" the (overnment reimburses !

per cent of the interest rates charged by the ban$s and financial institutions"

thereby ensuring credit availability for upgradation of the technology at global

rates. /nder the T/9 0cheme" launched on April %" %+++" loans amounting to

7s. %&+ billion have been disbursed to "D+ applicants. In consonance with the

industry" the T/9 0cheme has been continued during the leventh *lan :233D-23%2;. Allocation for T/9 has been raised from 7s.!.! billion in 233-3D" to

7s.+.%% billion in 233D-3,. ?andlooms will now be covered under the T/9

scheme. Integrated Textile *ar$s 0chemeJ 8anufacturing is a thrust area for the

government" as Indian industry and the government see foreign companies more

as partners in building domestic manufacturing capabilities rather than a threat

to Indian businesses. 9ollowing this through" the Central (overnment as well as

various 0tates has executed 0chemes such as" 0chemes for Integrated Textile

and Apparel *ar$s. /nder the 0cheme for Integrated Textiles *ar$s :0IT*;" 2par$s have been approved so far out of 3 sanctioned. The >udget provision for


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these par$s has been increased from 7s.%.,+ billion in 233-3D to 7s.&.2!

billion in 233D-3,. 0cheme for ?andloomsJ 9or ?andlooms a cluster approach

for the development of the handloom sector was introduced in 233!-3 and %23

clusters were selected. 2D new yarn depots are opened up till now and the

?andloom 8ar$ was launched. The (overnment proposes to ta$e up additional

%33-%!3 clusters in 233D-3,.

&!. ?ealth Insurance 0chemeJ The ?ealth Insurance 0cheme has so far covered

"33"333 weavers and will be extended to more weavers. The scheme will also

be enlarged to include ancillary wor$ers. The Corporate Catalyst India A report

on Indian Textiles Industry (overnment proposed to enhance the allocation for

the sector from 7s.2.&% billion in 233-3D to 7s..2% billion next year.6uality

ImprovementThe Textile Commission" under the 8inistry of Textiles" facilitatesfirms in the industry toimprove their quality levels and also get recognised

quality certifications. Out of 2!3 textilecompanies that have been ta$en up by

the Commission" % are certified I0O +33%. The othertwo certifications that

have been targeted by the Textile Commission are I0O %&333nvironmental

8anagement 0tandards and 0A ,333 Code of Conduct

8anagement0tandards.9oreign )irect Investment :9)I; *olicy%33' 9)I is

allowed in the textile sector under the automatic route. 9)I in sectors to

theextent permitted under automatic route does not require any prior approvaleither by the(overnment of India or 7eserve >an$ of India :7>I;. The investors

are only required tonotify the 7egional Office concerned of 7>I within 3 days

of receipt of in word remittance.8inistry of Textiles has set up 9)I Cell to

attract 9)I in the textile sector in the country. The9)I cell will operate with the

following obFectivesJ o To provide assistance and advisory support :including

liaison with other organisations and 0tate (overnments;. o Assist foreign

companies in finding out Foint venture partners. o To sort out operational

problems. o 8aintenance and monitoring of data pertaining to domestic textileproduction and foreign investment.9oreign Investment 0cenarioA new trend in

recent years has been the arrival in India of expatriate and western

designers:from 9rance" Italy" /H; who are beginning to form Foint ventures

with Indian designers tocater to the domestic and export mar$ets. Italian

companies are investing in capacityexpansion and stri$ing manufacturing"

distribution and franchising deals with India Inc.

&. Carrera is to invest /01 2!2.D million in textile proFects in India. Although

direct investmentin retail remains closed to 9)I as of now" companies have


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found alternative structuresthrough which they can approach Indian consumers

:examples include evi 0trauss" 8ar$s #0pencer" 7oyal 0porting ?ouse"

Adidas" 4i$e and 7eebo$ in fashion products;. There iscertainly a broader

opportunity to Ngrow the mar$et from inside as companies can freely setup

fully-owned sourcing :liaison; offices" as well as mar$eting operations. The

number of9)I approved between %++% and 233& was &% which amount to over

/01 %.32 billion.Other legislations regarding the Textile sector8inistry of

finance has added %! new textile products under duty drawbac$ schedule.

Thenew products included wool tops" cotton yarn" acrylic yarn" viscose yarn"

various blendedyarnfabrics" fishing nets etc. 9urther" the existing entries in the

drawbac$ schedule relating togarments have been expanded to create separate

entries of garments made up of:%; Cotton:2; 8an-made fibre blend and:;

8890eparate rates have been prescribed for these categories of garments on

the basis ofcomposition of textiles. After the phasing out of quota regime under

the 89A" India canenvisage its textile sector becoming 1%33 billion industry by

23%3. This will include exportsof 1!3 billion. The proposed targets would be

achieved provided reforms are initiated intextile sector and local manufacturers

adopt measures to improve their competitiveness. A !-pronged strategy aiming

to attract 9)I by ma$ing reforms in local mar$et" replacement ofexisting

indirect taxes with a single nationwide LAT" liberali=ation of contract norms

fortextile and garments units" elimination of restrictions that cause poor

operational andorgani=ational performance of manufacturers" was

suggested.The /nion 8inister said that the >oard for Industrial and 9inancial

7econstruction :>I97;had approved rehabilitation schemes for sic$ 4TC mills

at a cost of 7s + billion. Of the mills" ! unviable mills have been closed

after implementing Loluntary 7etirement 0cheme:L70; to all employees.

According to him" the government has already constituted assets salecommittees

comprising representatives of Central and state governments" operative

agency">I97" 4TC and the concerned 4TC subsidiary to effect sale of assets

through open tender

&D. system. *roposals for moderni=ation of 4TC mills have been made to the

consultativecommittee members" including formation of a committee of experts

to improve managementof these mills. ven the present status of Fute industry

was under the scanner of theconsultative committee.The (overnment had

announced change from the value-based drawbac$ rate hithertofollowed to a

weight-based structure for textile exports that will discourage rawmaterialexports and also curtail the scope for misusing the drawbac$ claims by


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boosting invoice valueof exports. 4C)B has launched its sil$ contract :raw

sil$ and cocoon;. 5ith this launch" thetotal number of products offered by

4C)B goes up to 2D. The launch of the sil$ contractwill offer the entire suite

of fibres to the entire value chain ranging from farmers to textilemills. 5ith the

obFective of protecting the interests of those affected by the 5TO

agreementsand globalisation process" (overnment of India Fointly with 4C)B

has adopted a policy ofencouraging future contracts of sil$. The (overnment

will run during the leventh *lanperiod a 0cheme for the )evelopment and

(rowth of Technical Textiles :0)(T; at an outlayof 7s +3 million to promote

indigenous manufacture of technical textiles. The schemewould also provide

infrastructure support by setting up centres of excellence for manufactureof

technical textiles.?ighlights of the 9oreign Trade *olicyThe ?onble /nion

8inister of Commerce # Industry" (overnment of India" had announcedthe

9oreign Trade *olicy on ,th April3!. 0ome of the 0alient 9eatures ?ighlights

of theproposals pertaining to Textile Industry in general and ?andlooms in

particular are. %. 9ormulation of Inter-0tate trade Council to engage 0tate

(overnments in providing an enabling environment for promotion of

international trade. 2. *roposed removal of export cess on export of all

agricultural and plantation commodities levied under various Commodity >oard

Acts. . 7eali=ing that great potential and opportunities exist in the

manufacturing sector" Annual supplement introduces a number of measures to

enhance the competitiveness of manufacturing sector. 4o safeguard and

antidumping duty to be levied on inputs under advance licence for deemed

export supplies made to IC> :International Competitive >idding; proFects.

&,. To promote accelerated export performance" balance export obligation will

be waived for the exporters completing D!' of their export obligation in half

the prescribed export obligation period. 7educed export obligation and

enhanced time available for exports under the *C( 0cheme for the importsmade by the agriculture sector. 7educed obligation at six times the duty saved

amount as against the normal eight times for imports made by the 00I sectors

under the *C( 0cheme. *C( 0cheme will facilitate the moderni=ation of

retail sector by allowing concessional duty imports. 9or this the retailer should

have a minimum covered shopping area of %333 square meters.&. xport of

poultry and dairy products and their value added products facilitated by granting

them duty credit S !' of the 9O> value of the exports under the Lishesh

Hrishi /paF @oFna.!. *ac$age has been developed for moderni=ing the marinesector *ac$age allows duty free import of inputs based on the past export


37/66

performance" import of mono filament long line system for tuna fishing at

concessional duty and establishes a self removal for clearance of waste of

perishable commodities.. (ems #


38/66

competitiveness are both policyand politics in the international trade and

commerce. 9urther" the industry performance isinfluenced by domestic

institutional" policy" infrastructure and managerial dynamics.In textile industry"

voluntary initiatives such as 5orldwide 7esponsible Apparel

*roduction:57A*; and Apparel Industry Initiative :AI*; are attempting to

instill social and

!3. environmental standards in textile and clothing sectors. It is in this Ebuyer-

driven globalcommodity chain that India has to position itself.>ased on our

experience of wor$ing with the textile industry" this article is an attempt

tobriefly outline the environmental concerns and identify ways to enhance

internal and externalcompetitiveness of textile sector.i$e every product"

clothes and other textiles products affect the environment to varyingdegreesthroughout their life cycles" through use of chemicals" solvents and huge

quantities ofwater. This apart" use of energy" solid waste and effluent discharge"

emit dust" fumes" etc. tothe atmosphere are maFor environmental concerns of

textile industry.>efore textiles reach the consumer" they go through many

different physical and chemicalprocesses. 9or example they may be treated with

chemicals to dye" ma$e them more hard-wearing or wrin$le-resistant" or less

flammable.0tudies have shown that some of the chemicals used in textile

industry are carcinogenic andothers may trigger allergic reactions. 0ome flameretardants that are used in certain textilescontain organic bromine compounds

that are persistent :brea$ down very slowly in theenvironment;. Textile industry

is $nown to use restricted chemicals such as a=o dyes

andformaldehyde.8anufacturing of all variants of textiles have an impact on the

environment. /sage of rawmaterial and other natural resource inputs such as

water etc have not only resource depletingimpacts but release of effluents or

emissions have natural resource degrading impacts. Theindustry is $nown to use

large quantities of water during its processing.9or example" to grow the fiber forone cotton diaper requires %3!. gallons of water" one T-shirt needs 2!.

gallons of water" one bath towel needs &3%.& gallons of water" a mans

dressshirt requires &%&.! gallons of water" and +,D gallons of water are required

for one pair ofFeans.An average integrated textile mill produces %! tons of

finished cloth per day. It uses a total ofapproximately ",&3 cubic meters of

water per day" including %",3 cubic meters forfinishing and processing"

another +3 cubic meters for steam generation" and an equivalentvolume for

serving the wor$ers colony and other domestic uses of water. The water usedfor


39/66

!%. finishing and processing results in contaminated liquid effluent of

approximately %"!33 cubicmeters per day.In Tirupur of Tamilnadu" India"

annually the textile industries alone utili=e around 2,.,billion liters of ground

water.9urther" usage of synthetic dyes puts environmental limitation because

production of thesedyes requires strong acids" al$alis" solvents" high

temperatures" and heavy metal catalysts.0ince production of these dyes need

very toxic and ha=ardous chemicals.nvironmental issues can no longer be

ignored by the textiles industry and the (overnment.Indian textile industry

needs to reali=e that to remain competitive" operating costs have to bereduced

and environmental compliance has to be enhanced. (overnment should not

onlystrive to integrate environmental goals into the national textile policy but

also in the plans andprogrammes. Textile sector cannot have independent

growth strategies that are bereft ofenvironmental concerns arising at various

points of value chain because environmental costsare proving to be a drag on its

own long term growth and development.To drive home the criticality of

integrating environmental concerns Tirupur industrial clusterin Tamilnadu"

India is being used as illustration.The textile industry in Tirupur was expected

to achieve the targeted export of /01 !3 >illionby the year 23%3. >ut" such

growth is now greatly hampered due to immense environmentaldamage due to

the effluents released from the textile units to cause to the 4oyyal river"ground

water system and agricultural fields mainly due to the textile wet

processingindustries in Tirupur. Textile manufacturers use energy as a raw

material input to themanufacturing process or for some other purpose usually

referred to as non-fuel use.lectricity consumption is increasing in textile mills.

Textile manufacturers have to deal withrising energy and other supply costs. 9or

e.g. )ow Chemical Co. and )u*ont both raisedprices on nearly everything they

sell" from chemicals used in bathroom cleaners to free=erbags and $itchen

counter tops" because of high raw materials costs./nderstanding the value chain

of textile industry will enable identifying and addressing allsources of

environmental impacts in a life cycle process. 0uch an integrated approach has

notbeen underta$en in India on environmental impacts of textile manufacturing.

A

!2. comprehensive analysis of the environmental impact of textile

manufacturing activity is acritical need of the hour and it needs to be initiated at

the earliest" which includes an analysisof the degradation by air pollution" wind"

water and other agents.A complete survey of how developments in the textileindustry and consumers of its productshave affected the environment in the past


40/66

needs to be ta$en up. This should also cover themost recent solutions adopted

by the industry to alleviate the problems. This is importantgiven the high textile

production targets post 233!" and the ways in which the industry isresponding

to the environmental challenges.9ortunately" unli$e any other country in the

world" India has hand-loom sector" whereproduction is relatively

environmentally benign. Thus" for Indian textile sector" the maindrivers for

environmentally benign growth can beJ (rowth of hand-loom sector

Competition *ressure exerted down the supply chain by the consumer 7educing

production costs 8eeting current and anticipated legislative requirements

Concern for the global and local environment*rofessionals at (reen 0tratos are

currently part of several initiatives in the textile sector suchas promoting

organic cotton and creating mar$et lin$ages for handloom sector" use

ofenvironment friendly dies and promotion of energy efficiency in the textile

sector. (eneral nvironment Impacts of Textile Industries Textile processing

industry is characterised not only by the large volume of water required for

various unit operations but also by the variety of chemicals used for various

processes. There is a long sequence of wet processing stages requiring inputs of

water" chemical and energy and generating wastes at each stage. The other

feature of this industry" which is a bac$bone of fashion garment" is large

variation in demand of type" pattern and colour combination of fabric resulting

into significant fluctuation in waste generation volume and load. Textile

processing generates many waste streams" including liquid" gaseous and solid

wastes" some of which may be ha=ardous.

!. The nature of the waste generated depends on the type of textile facility" the

processes andtechnologies being operated" and the types of fibres and chemicals

used. The textileindustry is a significant contributor to many national

economies" encompassing both smalland large-scale operations worldwide. In

terms of its output or production and employment"the textile industry is one ofthe largest industries in the world. The textile manufacturingprocess is

characterised by the high consumption of resources li$e water" fuel and a

varietyof chemicals in a long process sequence that generates a significant

amount of waste. Thecommon practices of low process efficiency result in

substantial wastage of resources and asevere damage to the environment. The

main environmental problems associated withtextile industry are typically those

associated with water body pollution caused by thedischarge of untreated

effluents. Other environmental issues of equal importance are airemission"notably Lolatile Organic Compounds :LOC;s and excessive noise or odour


41/66

aswell as wor$space safety.Air pollutionJ8ost processes performed in textile

mills produce atmospheric emissions. (aseousemissions have been identified as

the second greatest pollution problem :after effluentquality; for the textile

industry. 0peculation concerning the amounts and types of airpollutants emitted

from textile operations has been widespread but" generally" air emissiondata for

textile manufacturing operations are not readily available. Air pollution is the

mostdifficult type of pollution to sample" test" and quantify in an audit.5ater

pollutionJThe textile industry uses high volumes of water throughout its

operations" from the washingof fibres to bleaching" dyeing and washing of

finished products. On average" approximately233 litres of water are required to

produce l $g of textiles. The large volumes of wastewatergenerated also contain

a wide variety of chemicals" used throughout processing. These cancause

damage if not properly treated before being discharged into the environment. Of

allthe steps involved in textiles processing" wet processing creates the highest

volume ofwastewater.The aquatic toxicity of textile industry wastewater varies

considerably among productionfacilities. The sources of aquatic toxicity can

include salt" surfactants" ionic metals and their

!&. metal complexes" toxic organic chemicals" biocides and toxic anions. 8ost

textile dyes have

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Textilr Industry Scenerio