Textile Industry Analysis

TEXTILE INDUSTRY

Presented By

Group 1

India’s textile industry is one of the economy’s largest.

The industry scenario started changing after the economic

liberalization of Indian economy in 1991.

It has now become the largest industries in the world.

Indian textile industry contributes about 14 % to industrial

production.

4% to country’s gross domestic product. 17% to country’s export

earnings

Provides direct employment to over 35 million people

The textile industry of India also contributes nearly 14% of the

total industrial production of the country.

It also contributes around 3% to the GDP of the country

It is the largest provider of employment after agriculture.

Facts of Indian Textile Industry

HISTORY

English inventors in the 18th century began to automate textile cottage

industry processes including carding, spinning and weaving.

James Hargreaves developed the Spinning Jenny, a device which replaced

eight hand spinners in one operation. Richard Arkwright assembled these

processes and started the first factory on the Derwent River in Cromford,

England in 1771.

In the early 1800s, cotton was raised in the southern United States and

exported to mills in England and the north. .

In 1814, James Cabot Lowell of Boston built a factory in Waltham, up the

Charles River from Boston.

Later, the Boston Associates built an entire mill town on the Merrimack

River, and later named it "Lowell" in memory of James Cabot Lowell.

In the 1990s, a new world order began to replace. Buying from the lowest

cost producer drove many textile manufacturers out of the production side

and into imports.

STRUCTURE OF TEXTILE

INDUSTRY

Indian textile industry can be divided into several segments,

some of which can be listed as below:

Cotton Textiles

Silk Textiles

Woollen Textiles

Readymade Garments

Hand-crafted Textiles

Jute and Coir

SWOT ANALYSIS

STRENGTH

India has rich resources of raw materials of textile industry. It is

one of the largest producers of cotton in the world and is also rich

in resources of fibres like polyester, silk, viscose etc.

India is rich in highly trained manpower. The country has a huge

advantage due to lower wage rates. Because of low labour rates the

manufacturing cost in textile automatically comes down to very

reasonable rates.

India is highly competitive in spinning sector and has presence in

almost all processes of the value chain.

WEAKNESS

Knitted garments manufacturing has remained as an extremely

fragmented industry. Global players would prefer to source their

entire requirement from two or three vendors and the Indian garment

units find it difficult to meet the capacity requirements.

Industry still plagued with some historical regulations such as

knitted garments still remaining as a SSI domain.

Labour force giving low productivity as compared to other

competing countries.

Low bargaining power in a customer-ruled market.

OPPORTUNITY

Low per-capita domestic consumption of textile indicating

significant potential growth.

Domestic market extremely sensitive to fashion fads and this

has resulted in the development of a responsive garment

industry.

India's global share is just 3% while China controls about

15%. In post-2005, China is expected to capture 43% of global

textile trade.

Companies need to concentrate on new product

developments..

THREATS

Competition in post-2005 is not just in exports, but is also likely

within the country due to cheaper imports of goods of higher quality

at lower costs.

Standards such as SA-8000 or WARP have resulted in increased

pressure on companies for improvement of their working practices.

Alternative competitive advantages would continue to be a barrier

FACTORS AFFECTING TEXTILE

INDUSTRY

Textile Industry

Rivalry

Demand Conditions

Cost & Location

Government Regulation

Policy

India’s Position in World

Textile Economy

Recent Developments

Bangladesh is planning to set up two special economic zones

(SEZ) for attracting Indian companies in view of the duty free

trade between the two countries.

Italian luxury major Canali has entered into a 51:49 joint

venture with genesis luxury fashion, which currently has

distribution rights of Canali branded products in India . The

company will now sell Canali branded products in India

exclusively

Performance of the Textile Industry

The industry which was growing at 3-4 percent during the last six

decades has now accelerated to the annual growth rate of 9-10 percent

but various factors have effecting annual growth rate of textile Industry,

Global recession is one of them.

The impact of the global and domestic economic slow down directly

affect the performance of the industry.

Index of industrial production (IIP) data has been released by the

central statistical organization (CSO) shows a dismal picture of textile

production.

PERCENTAGE GROWTH

IN TEXTILES

Export scenario

Developed countries' exports declined from 52.2% share in 1990 to 37.8 %

in 2002. And that of developing countries increased from 47.8% to 62.2 %

in the same period.

In 2003 the exports figures in percentage of the world trade in Textiles

Group (for select countries) were:

INDIAN TEXTILE EXPORTS 2014

45%

25%

18%

4%

18%

2% 2%

ready garment

cotton textile

Man-made

textileshandi crafts

silk &

handloomWool &

Woolen textilesothers

India’s Textile Exports

(in US$ billion)

17.6 19.122.1 21.2 22.4

26.8

0

5

10

15

20

25

30

FY 06 FY 07 FY 08 FY 09 FY 10 FY 11

Textile Export Statistics

Financial year Textile exports

US$ Millions

Total exports US$

Millions

Percentage of

textile exports

2004-2005 14026.72 83538.95 16.79%

2005-2006 17520.07 103090.53 16.99%

2006-2007 19146.04 126262.68 15.16%

2007-2008 19558.53 143567.86 13.62%

2008-2009 18519.96 153018.22 12.10%

2009-2010 22418.00 178751.43 12.54%

MAJOR PLAYERS IN TEXTILE

INDUSTRYCompany Business area

Welspun India LTD Home textile,bathrobes, terry towels

Vardhman group Yarn, fabric, sewing threads, acrylic fiber

Raymond Ltd. Tailored clothing,denim,shirting, woolen outerwear

Bombay dyeing &

manufacturing

ltd.compqny

Bed linen, towels, shirts, dresses, and saris in cotton

and polyster blend

ITC lifestyle Lifestyle market

Reliance industries

Ltd.

Fabric, formal men's wear

Problems Of Textile Industry

in India

The plant and machinery and technology by a number of units are absolute.

Government regulations like the obligation to produce controlled cloth are

against the interest of the industry.

The cotton yield per hectare of land is very low in India.

Competition from the man made fabrics and synthetics.

India has been facing severe competition from other countries like Taiwan,

South Korea, China and Japan.

The industry faces number of other problems like power cuts,

infrastructural problems, lack of finance, exorbitant rise in raw material

prices and production.

Government Initiates and

Regulatory Framework The government has offered health insurance coverage to 161.10

million weavers and ancillary workers under handloom weavers

comprehensive scheme.

As per the 12th year five year plan, the integrated skill development

scheme aims to train over 2675,000 people within next 5 years.

As per the credit guarantee program, over 25000 artisans credit cards

have been supplied to artisans and 16.50 million additional

applications for issuing credit cards have been forwarded to banks .

The Indian government has given approval to 40 new textiles parks

to be set up and this would be executed over a period of 36 months.

The new textiles park would leverage employment to 400,000 textile

workers

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