India Textile Industry is one of the leading textile industries in the world.

Though was predominantly unorganized industry even a few years back, but
the scenario started changing after the economic liberalization of Indian
economy in 1991. The opening up of economy gave the much-needed thrust
to the Indian textile industry, which has now successfully become one of the
largest in the world.

The textile industry occupies a vital place in the Indian economy and
contributes substantially to its exports earnings. Textile exports represents
nearly 30 percent of the country‘s total exports. It has a high weight age of
over 20 percent in the national production. India is the world’s second
largest producer of textiles after China. It is the world’s third largest
producer of cotton – after China and the USA – and the second largest
cotton consumer after china. The textile industry in India is one of the oldest
manufacturing sectors in the country and is currently it’s largest.

The textile industry occupies a unique place in our country. One of the
earliest to come into existence in India , it accounts for 14 percent of the
total industrial production, contributes to nearly 30 percent to the total
export and is the second largest employment generator after agriculture. The
Indian textile industry is one of the largest in the world with a massive raw
material and textile – manufacturing base. Indian economy is largely
dependent on the textile manufacturing and trade in addition to other major
industries about 27 percent of the exchange earning are on account of
export of textile and clothing alone. The textiles and clothing sector
contributes about 14 percent to the industrial production and 3 percent to
the gross domestic product of the country. Around eight percent of the total
excise revenue collection is contributed by the textile industry. So much so,
the textile industry accounts for as large as 21 percent total employment
generated in the economy. Around 35 million people are directly employed in
the textile manufacturing activities.

India textile industry largely depends upon the textile manufacturing and
export. It also plays a major role in the economy of the country. India earns
about 27% of its total foreign exchange through textile exports. Further, 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. India textile industry is also the largest in the country in terms of
employment generation. It not only generates jobs in its own industry, but
also opens up scopes for the other ancillary sectors. India textile industry
currently generates employment to more than 35 million people. It is also
estimated that, the industry will generate 12 million new jobs by the year
2010.
Various Categories

Indian textile industry can be divided into several segments, some of which
can be listed as below:

 Cotton Textiles
 Silk Textiles
 Woolen Textiles
 Readymade Garments
 Hand-crafted Textiles
 Jute and Coir

The Industry

India textile industry is one of the leading in the world. Currently it is

estimated to be around US$ 52 billion and is also projected to be around
US$ 115 billion by the year 2012. The current domestic market of textile in
India is expected to be increased to US$ 60 billion by 2012 from the current
US$ 34.6 billion. The textile export of the country was around US$ 19.14
billion in 2006-07, which saw a stiff rise to reach US$ 22.13 in 2007-08.
The share of exports is also expected to increase from 4% to 7% within
2012. Following are area, production and productivity of cotton in India
during the last six decades:

Though during the year 2008-09, the industry had to face adverse agro-
climatic conditions, it succeeded in producing 290 lakh bales of cotton
comparing to 315 lakh bales last year, yet managed to retain its position as
world's second highest cotton producer.

Strengths


Vast textile production capacity
 Large pool of skilled and cheap work force
 Entrepreneurial skills
 Efficient multi-fiber raw material manufacturing capacity
 Large domestic market
 Enormous export potential
 Very low import content
  Flexible textile manufacturing systems

Weaknesses

 Increased global competition in the post 2005 trade regime under

WTO
 Imports of cheap textiles from other Asian neighbors
 Use of outdated manufacturing technology
 Poor supply chain management
 Huge unorganized and decentralized sector
 High production cost with respect to other Asian competitors

Current Facts on India Textile Industry

 India retained its position as world’s second highest cotton producer.

 Acreage under cotton reduced about 1% during 2008-09.
 The productivity of cotton which was growing up over the years has
decreased in 2008-09.
 Substantial increase of Minimum Support Prices (MSPs).
 Cotton exports couldn't pick up owing to disparity in domestic and
international cotton prices.
 Imports of cotton were limited to shortage in supply of Extra Long
staple cottons.
 SWOT Analysis
Strengths:
1. Indian Textile Industry is an Independent & Self-Reliant
industry.
2. Abundant Raw Material availability that helps industry to
control costs and reduces the lead-time across the operation.
3. Availability of Low Cost and Skilled Manpower provides
competitive advantage to industry.
4. Availability of large varieties of cotton fiber and has a fast
growing synthetic fiber industry.
5. India has great advantage in Spinning Sector and has a
presence in all process of operation and value chain.
6. India is one of the largest exporters of Yarn in international
market and contributes around 25% share of the global trade in
Cotton Yarn.
7. The Apparel Industry is one of largest foreign revenue
contributor and holds 12% of the country’s total export.
8. Industry has large and diversified segments that provide wide
variety of products.
9. Growing Economy and Potential Domestic and International
Market.
10. Industry has Manufacturing Flexibility that helps to increase
the productivity.

Weaknesses:
1. Indian Textile Industry is highly Fragmented Industry.
2. Industry is highly dependent on Cotton.
3. Lower Productivity in various segments.
4. There is Declining in Mill Segment.
5. Lack of Technological Development that affect the productivity
and other activities in whole value chain.
6. Infrastructural Bottlenecks and Efficiency such as,
Transaction Time at Ports and transportation Time.
7. Unfavorable labor Laws.
8. Lack of Trade Membership, which restrict to tap other
potential market.
9. Lacking to generate Economies of Scale.
10. Higher Indirect Taxes, Power and Interest Rates.

Opportunities:
1. Growth rate of Domestic Textile Industry is 6-8% per annum.
2. Large, Potential Domestic and International Market.
3. Product development and Diversification to cater global needs.
4. Elimination of Quota Restriction leads to greater Market
Development.
5. Market is gradually shifting towards Branded Readymade
Garment.
6. Increased Disposable Income and Purchasing Power of Indian
Customer opens New Market Development.
7. Emerging Retail Industry and Malls provide huge opportunities
for the Apparel, Handicraft and other segments of the industry.
8. Greater Investment and FDI opportunities are available.

Threats:
1. Competition from other developing countries, especially China.

2. Continuous Quality Improvement is need of the hour as there

are different demand patterns all over the world.
3. Elimination of Quota system will lead to fluctuations in Export
Demand.
4. Threat for Traditional Market for Powerloom and Handloom
Products and forcing them for product diversification.
5. Geographical Disadvantages.
6. International labor and Environmental Laws.
7. To balance the demand and supply.
8. To make balance between price and quality.
No.2

Strengths of the Indian Textile Industry

India's biggest strength lies in its big pool of cheap and talented workforce.
However, apart from it there are few other important factors which
contributes to its strength like

 Huge Domestic Market consumption (due to its own population).

 Tremendous Export Potential (Indian products are in great demand
among the western importers)
 The new age creative and risk taking entrepreneurs.
 Use of latest technology which produces high quality multi-fiber raw
material.
 Supportive government policies.

The Indian Textile Industry has its fair share of weakness like:

 The increased global competition due to WTO policies.

 Use of outdated manufacturing technology from the low end suppliers.
 Inefficient supply chain management.
 Additionally, this sector is still unorganized at many levels and needs
a lot of government reforms for further improvisation.

Opportunities

The western countries are now setting up their manufacturing units in India
which single handedly opens up a wide array of possibilities for all the
stakeholders within the textile industry.

Experts believe that the golden era of Chinese textile and apparel exports is
over and the production base of global textiles is gradually shifting from
China to India, Pakistan and other low cost destinations.

Threats:

Even though experts claim that China is past its glorious days, still one
cannot afford to take china lightly and has to keep in mind the capability of
Chinese exporters to supply quality products at cheap prices. Indian textile
exporters cannot afford complacency and need to be on their toes for any
changes within the international trade community.

Final Thought:
Global textile production has witnessed the growth of an astounding 25
percent (including the Textile Accessories ) in the last decade. Asian markets
will continue to spearhead the growth of the textile industry in the years to
come and the textile industry could go beyond the current $500 billion mark
any time soon.

SWOT analysis of Indian Apparel & Textile Industry

The Indian Textile industry adds 14% to the industrial production and 8% to the GDP of
India. It provides employment to 38 million people and thus, is the second largest
employment provider after agriculture. The Indian Apparel & Textile Industry is one of the
largest sources of foreign exchange flow into the country with the apparel exports
accounting for almost 21% of the total exports of the country. A systematic SWOT analysis
of the textile and apparel industry indicates the following:-

1. STRENGTH

. Raw material base

India has high self sufficiency for raw material particularly natural fibres. India’s cotton crop
is the third largest in the world. Indian textile Industry produces and handles all types of
fibres.

II. Labour

Cheap labour and strong entrepreneurial skills have always been the backbone of the Indian
Apparel and textile Industry.

III. Flexibility

The small size of manufacturing which is predominant in the apparel industry allows for
greater flexibility to service smaller and specialized orders.

IV. Rich Heritage

The cultural diversity and rich heritage of the country offers good inspiration base for
designers.

V. Domestic market

Natural demand drivers including rising income levels, increasing urbanisation and growth
of the purchasing population drive domestic demand.

2. WEAKNESS
I. More dependence on cotton

Due to over specialization in cotton, the bulk of the international market is missed out,
synthetic products in India are expensive and fabric required for items like swimsuit, sky-
wear and industrial apparel is relatively unavailable.

II. Spinning Sector

Spinning sector lacks modernization and there is a need of introducing new technology.

III. Weaving Sector

India has relatively less number of shuttle-less loom.

IV. Fabric Processing

Processing is the weakest link in the Indian textile value chain, adversely affecting its ability
to compete in exports.

V. Poor Infrastructure

High power costs and long export lead times are eroding India’s export competitiveness
across the textile chain.

VI. Low Labour Productivity

Productivity levels for manufacturing various apparel items are far lower in India in
comparison with its competitors.

OTHER WEAKNESSSES

VII. Less attention on man power training

VIII. Poor quality standards

IX. Distance of the potential market

X. Lower average consumption in domestic market

XI. Lack of professionalism and integration of supply chain

XII. Dependence on quota system

XIII. Very low investment on R&D

XIV. Limited exploitation of economies of scale

3. OPPORTUNITIES

I. Growing Industry

World textile trade would continue to grow at a rate of 3-4% to reach $200-210 billon by
2010.

II. Market access through bilateral negotiation

The trade is growing between regional trade blocs due to bilateral agreements between
participating countries.

III. Integration of Information technology

‘Supply Chain Management’ and ‘Information Technology’ has a crucial role in apparel
manufacturing. Availability of EDI (Electronic Data Interchange), makes communication fast,
easy, transparent and reduces duplication.

IV. Opportunity in High Value Items

India has the opportunity to increase its UVR’s (Unit Value Realization) through moving up
the value chain by producing value added products and by producing more and more
technologically superior products.

4. THREATS

I. Decreasing Fashion Cycle

There has been an increase in seasons per year which has resulted in shortening of the
fashion cycle.

II. Formation of Trading Blocks

Formation of trading blocks like NAFTA, SAPTA, etc; has resulted in a change in the world
trade scenario. Existence of bilateral agreements would result in significant disadvantage for
Indian exports.

III. Phasing out of Quotas

India will have to open its protected domestic market for foreign players thus domestic

market will suffer.