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INDUSTRY ANALYSIS- Textile Industry

C hapter Six. INDUSTRY ANALYSIS- Textile Industry. Industry Structure. Textile Industry. Power-Loom Hand-Loom Mill. Spinning Weaving & Knitting Fabric Processing Garment Manufacturing. Fragmented Large number of intermediaries.

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INDUSTRY ANALYSIS- Textile Industry

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  1. Chapter Six INDUSTRY ANALYSIS- Textile Industry

  2. Industry Structure Textile Industry Power-Loom Hand-Loom Mill Spinning Weaving & Knitting Fabric Processing Garment Manufacturing • Fragmented • Large number of intermediaries

  3. Importance Of Textiles In Economy • Employs 3.5 crore people and is the second highest employer • Contributes 1/5th to the total export earnings 4% to the GDP • One-fifth of the total industrial production • Fortunes of one out of every 6 households • High capital employment ratio has immense potential to promote employment • Pervasive across the length and breadth of this country

  4. Major Players And Performance Source: Balance-sheet of the companies

  5. Major Players And Performance Source: Textile Times

  6. Government Initiatives • Ministry of Textiles • FDI is freely allowed in the sector • Provided an additional allocation of Rs. 1000 crore in the 10th Plan period • National Textile Policy (2000) • Apparel Parks for Export Scheme (APE) • Textile Centre Infrastructure Development Scheme (TCIDS) • Provide 10% Capital subsidy for processing under TUFS

  7. Government Initiatives • Duty structure reforms • Formulated Hi-tech Weaving Park Scheme • Group Insurance Scheme • The government is also actively promoting the “Made in India” brand around the world. • De-reserved knitting sector from the ambit of Small Scale Industries (SSI) • Accelerating Labor & Power reforms to enhance the competitiveness of the Indian textiles

  8. Growth and Opportunities • Strong domestic demand • Growth rate of 18.2% in 2004-05 as compared to a negative growth of 3.2% in 2003-04 • Possible to achieve a growth of the textile economy from the current $ 37 billion to $ 85 billion by 2010 • Creation of additional 12 million jobs in Textile Sector • Share in world textile trade would most likely rise from the current 4% to 8% by 2010

  9. Growth and Opportunities • Achieving export value of $ 50 billion by 2010 • The country could nearly quadruple its share of the US market to 15 per cent from 4 per cent in 2002 –WTO • The Indian textile industry has seen an investment of about Rs 50,000 crore in the last five years • Foreign labels like Walmart, Levis, Gap, JC Penny, Marks & Spencer

  10. Growth and Opportunities Sources: Ministry of Textiles and Various Export Councils

  11. India As A Sourcing Hub Sources: Ministry of Textiles and Various Export Councils

  12. India As A Sourcing Hub Source- Foreign Trade Statistics of India (Principal Commodities & Countries) DGCIS

  13. Problems and Threats • Obsolete technology • Unwillingness of the banking sector to finance the • modernization • Restrictive labor regulations • Infrastructural constraints/bottlenecks • Small scale also brings with it the problem of productivity • Global logistics disadvantage • Competition from China • Lack of Investment

  14. Strengths • Indian industry is amongst the very few in the world that is truly vertically integrated • Indian industry has over the years steadily diversified its raw material base • In addition to this, Indian industry has consistently remained flexible in terms of production quantity and lead time. • During recent years there has been qualitative improvement in management assets as well

  15. Strengths Source of Export/Import data from DGCI&S, Kolkata

  16. Strengths • India has the second largest spinning capacities in the world. • Among the abundant workforce, the fabric or garment-making skill is very high • India's cost advantage

  17. Recent Developments • The Quota Free World • Standardization • Right to Information Act

  18. Concluding Remarks • Gandhiji always said, “The swaraj of my dream is the poor man’s swaraj. The spinning wheel and the spinning wheel alone will solve, if anything will solve, the problem of the deepening poverty in India.” The textile sector is indeed poised to play a huge role in alleviating the economic problems of millions.

  19. TEXTILES SECTOR CITI for Competitiveness The projections of CITI – Indian textile industry would be worth US$ 85 billion by 2010 from the present level of US$ 36 billion. Other targets – textile exports of US$ 40 billion and 12 million additional jobs in textile industry – achieve India’s share of 8% in the world textile markets.

  20. INDUSTRIAL PRODUCTION – GROWTH RATES IN TEXTILES (% change)

  21. MARKET WATCH CITI Index covering 30 textile scripts from different textile segments, i.e., spinning and weaving units, garmenting and textile machinery companies, with January 2002 as base period. Index is based on full market capitalisation.

  22. CITI STOCK INDEX AND BSE SENSEX COMPARISON

  23. MARKET WATCH contd. CITI Index moved up much faster compared to BSE SENSEX, indicating that textile is a sunrise sector. Price of scripts of JK Synthetics, Racron Fibres, Century Tex, Bombay Dyeing, Dawn Mills, Malwa etc., increased at rapid rate.

  24. CONCLUSION • India’s increased openness has been an important factor in explaining healthy industrial growth in the mid 1990s. • Indians do not purchase domestically produced goods. Therefore, no demand for items made in India. The market in India has become destination of many exporters from foreign countries and the Indians have entered into a stage where consumer’s sovereignty rule in its real sense. Free Trade force domestic companies to compete with MNCs. • Opportunities at the top of the pyramid.

  25. Bibliography • Textile Times by CITI India • Foreign Trade Review by IIFT • http://texmin.nic.in/ • http://www.ciionline.org • http://www.ibef.org/industry/textiles.aspx • http://www.taindia.com/index.htm • http://www.textileintelligence.com/ • http://www.citiindia.com/

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