Structure of Indian Textile Industry in New World Order

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1 Structure of Indian Textile Industry in New World Order Asst. Prof. Samadhan K. Khamkar, Department of Marketing, Navinchandra Mehta Institute of Technology & Development, Dadar, Mumbai, India Abstract: Indian textile enjoys a rich heritage, the origin of textiles in India traces back to the Indus valley civilization, where people used homespun cotton for weaving their clothes. If we talk about the Indian textile industry and its structure in the present era, it is one of the leading industries in the world. Even the structure and the welfare schemes floated by the Indian government are much comprehensive. Due to which India projected a high production of textile. There has been increase in India s share of global textile trading to seven points in five years. Keywords: Textiles, Production, Structure, Scheme, Incentives, Introduction The significance of the textile industry is due to its contribution in the industrial production, employment, and also earns foreign exchange by way of exports. Though, India is recognized for textile goods from ancient times, but the modern industry emerged in India in the early nineteenth century when the first textile mill was established at fort Gloster near Calcutta in The textile sector in India is one of the largest in the world. The Indian textile industry can be divided into three segments: 1) Cotton Textiles 2) Synthetic Textiles 3) Other like Wool, Jute, Silk, etc. 167

2 Textile is the first manufacturing industry that every country could venture to enter, as various kinds of raw material are used and some of the materials are always available in different countries be it cotton, wool, silk or man-made fiber. Therefore every country hesitates to open the door for imports of textiles in unrestricted manner, because it can hurt with respect to employment, BOP, about 14% in total industry output. The organized textile sector gives employment to 35 million people, whereas 93 million people are directly or indirectly employed in this sector (GoI, ). India is the second largest producer of fiber in the world and the major fiber produced is cotton. Other fibers produced in India include silk, jute, wool and man-made fibers, 60% of the Indian textile industry is cotton based. The strong domestic demand and the revival of the economic markets have led to huge growth of the Indian textile. India projected a high production of textile (325 lakh bales for ). There has been increase in India s share of global textile trading to seven points in five years. The rising prices are the major concern of the domestic producers of the country. Literature review The Indian textile industry has a significant presence in the economy as well as in the international textile economy. Its contribution to the Indian economy is manifested in terms of its contribution to the industrial production, employment generation and foreign exchange earnings. It contributes 20 percent of industrial production, 9 percent of excise collections, 18 percent of employment in the industrial sector, nearly 20 percent to the country total export earning and 4 percent to the Gross Domestic Product (Dr. P. Chellasamy). 168

3 India s textile industry is one of the economy s largest. In 2000/01, the textile and garment industries accounted for about 4 percent of GDP, 14 percent of industrial output, 18 percent of industrial employment, and 27 percent of export earnings (Hashim). India s textile industry is also significant in a global context, ranking second to China in the production of both cotton yarn and fabric and fifth in the production of synthetic fibers and yarns (Dr.M.Dhanabhakyam). There is a large scope of improvement in the textile industry of India as there is a huge increase in personal disposable income among the Indians after the 1991 liberalization. There is also a large growth of the organized sector in the Indian textile industries. The foreign brands along with the collaboration of the Indian companies established business in India. Some of these are Puma, Armani, Benetton, Esprit, Levi Strauss, Hugo Boss, Liz Claiborne, Crocs etc. The major Indian industries include Bombay Dyeing, FabIndia, Grasim industries, JCT Limited, Laksmi mills and Mysore silk factory. Objectives of the study To understand the prospects of Indian textile industry To view the current structure of textile industry in India To know the various schemes for the Indian textile industry Structure of India s Textile Industry Unlike other major textile-producing countries, India s textile industry is comprised mostly of small-scale, nonintegrated spinning, weaving, finishing, and apparel-making enterprises. This unique industry structure is primarily a legacy of government policies that have promoted labor intensive, small-scale 169

4 operations and discriminated against larger scale firms. technology outdated, relative to other major producers. Composite Mills: Relatively large-scale mills that integrate spinning, weaving and, sometimes, fabric finishing are common in other major textile-producing countries. In India, however, these types of mills now account for about only 3 percent of output in the textile sector. About 276 composite mills are now operating in India, most owned by the public sector and many deemed financially sick. Spinning: Spinning is the process of converting cotton or manmade fiber into yarn to be used for weaving and knitting. Largely due to deregulation beginning in the mid-1980s, spinning is the most consolidated and technically efficient sector in India s textile industry. Average plant size remains small, however, and Weaving and Knitting: Weaving and knitting converts cotton, manmade, or blended yarns into woven or knitted fabrics. India s weaving and knitting sector remains highly fragmented, smallscale, and labor-intensive. This sector consists of about 3.9 million handlooms, 380,000 powerloom enterprises that operate about 1.7 million looms, and just 137,000 looms in the various composite mills. Powerlooms are small firms, with an average loom capacity of four to five owned by independent entrepreneurs or weavers. Modern shuttleless looms account for less than 1 percent of loom capacity. Fabric Finishing: Fabric finishing (also referred to as processing), which includes dyeing, printing, and other cloth preparation prior to the manufacture of 170

5 clothing, is also dominated by a large number of independent, small scale enterprises. Overall, about 2,300 processors are operating in India, including about 2,100 independent units and 200 units that are integrated with spinning, weaving, or knitting units. Clothing Apparel is produced by about 77,000 small-scale units classified as domestic manufacturers, manufacturer storage facilities, technology upgradation in pre-loom/ on-loom/ postloom operations, weaving shed, skill upgradation, design inputs, health facilities etc. which would eventually be able to meet the discerning and changing market demands both at domestic and at the international level and raise living standards of the millions of weavers engaged in the handloom industry. exporters, and fabricators (subcontractors) Initiatives/Schemes by the government towards the textile industry a) Comprehensive handloom cluster development scheme: The objective is to develop mega handloom clusters that are located in clearly identifiable geographical locations that specialize in specific products, with close linkages and inter dependents amongst the key players in the cluster by improving the infrastructure facilities, with better b) Comprehensive handlooms development scheme and Yarn supply scheme: The main objective is to strengthen /consolidate existing handloom clusters for their sustainability. To focus on formation of handloom weaver s groups as a viable production group in a selected handloom clusters. To reduce drudgery of handloom weavers, improve productivity and quality of handloom products by providing technologically upgraded accessories. The objective of 171

6 the Yarn supply scheme is to make available all types of yarn at mill gate price to the eligible handloom weavers, so as to facilitate regular supply of basic raw materials to the handloom sector and help utilize the full employment potential of the sector. d) Babasaheb Ambedkar Hastshilp Vikas Yojana and Human Resource Development Scheme: Handicrafts constitute an important segment of decentralized / unorganized sector of our economy. The main aim is to transformed into a flourishing economic c) North Eastern Region textile promotion scheme and Handlooms Weavers Comprehensive welfare scheme (NERTPS): The objective of projects of market promotion of north eastern textiles and handloom products under NERTPS is to increase the handloom fabric production by way of establishing market linkages. The objective of the handlooms weavers comprehensive scheme is to provide enhanced insurance cover to the handloom weavers in the case of natural as well as accidental death and in cases of total or partial disability. activity and Human Resource Development Scheme has been formulated to provide qualified and trained workforce to the handicraft sector. Conclusion After going through a tough period of rise in input costs as well as interest cost, it is unlikely that the sector's outlook will turn positive until fundamental issues such as power shortage, lack of technology and capital investments are resolved. It earlier appeared that foreign direct investment (FDI) in retail is an 172

7 opportunity that would unleash demand in the long run and offset any slowdown in exports. However, the same now seems on the backburner. Although home textile companies have been aggressive on the capacity expansion front, realisations have remained stable. But as new capacities come on-stream and utilisation levels pick up, this is unlikely to continue. This is because although India continues to feature amongst the lowest cost producers for the US and EU markets, competitors like Pakistan and Turkey are cannibalising its market share. Moreover, with the 2) Ramaswamy K.V and Gereffi Gary (2000), India s Apparel Exports: The Challenges of Global Markets, Developing Economies. 3) 4) of textiles.gov.in 5) Satyaki Roy (2009) Garments Industry In India Lessons from Two Clusters, Institute for Studies in Industrial Development, New Delhi. 6) Swallow D.A (2008) Production and control in the Indian garment export industry,cambridge Press. possibility of slowdown in the western economies looming large, a slowdown in demand cannot be ruled out. References 1) Venkatesan R. and Kattti V. (1999), Indian Textile Policy for the 21 st Century. B.R.Publishing Corporation, New Delhi. Author s Profile Name: Prof. Samadhan K. Khamkar khamkar14@gmail.com Mob. No Office Address: Navinchandra Mehta Institute of Technology & Development, 173

8 Kirti College campus, Veer Savarkar Maharashtra, India, Marg, Dadar (W), Mumbai-28, 174