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Analysis of Indian Textile Industry
- 2. “The Answer to Every Question Lies Within Yourself” - Bhagavad Gita
- 4. INDUSTRY OVERVIEW • India’s Textile sector is the country’s oldest manufacturing industry. • Major cotton producing States are Gujarat, Maharashtra, and Andhra. • Industry is fragmented, with few large companies • But, predominant share in the hands of small, independent & unorganized players. • Investors - Setting up in SEZs, NIMZs, and SITPs at subsidized rates • Mill Fiber consumption - 60% Cotton, 40% Man-made fibers • Yarn & Fiber subsector - Dominated by cotton - 71.5% of Production.
- 5. ENTRY MODES Five methods of entry for international apparel retailers: • Licensing • Franchising • A wholly-owned subsidiary • JV • Limited Liability Partnership
- 6. KEY PLAYERS • Vardhman Textiles Ltd : INR 62.48bn • Welspun India Ltd: INR 50.51bn • Raymond Ltd: INR 59.06bn • Bombay Dyeing & Manufacturing Co Ltd: INR 26.93bn • Trident India Ltd: INR 3.42bn
- 10. Global Positioning - Cost Competition
- 14. Bargaining power of suppliers- LOW • India largest producer of cotton after U.S and China • Lower production cost • Low labor cost PORTERS FIVE FORCES
- 15. Bargaining power of Buyers- HIGH • A plethora of spinning Mills and fabric factories • High competition • Textile spread across organized and unorganized sector
- 16. Threat of New Entrants- HIGH • Difficult to create customer base • Existing competition • Investments
- 17. Rivalry - HIGH • Competition from numerous small firms. (Unorganized Sector)
- 18. Threat of substitute - LOW • What do you think would be the substitute for Textile?
- 19. PESTLE ANALYSIS • POLITICAL 100% FDI – 3.12b USD till 2019 30% Local sourcing norms Implementation of GST PPP model in textile industry Policy Support • MSP for cotton • Scheme for integrated textile park
- 20. PESTLE • ECONOMIC Projected to grow 8.7% - to reach 226b USD by 2023 Exchange rate Rising per-capita income • SOCIAL Social stratification Demographic elements
- 21. PESTLE • TECHNOLOGY Automated looms Semi automated looms Technology upgradation fund scheme
- 22. PESTLE • LEGAL Changes in labour laws Overtime per week raised from 4hrs to 8 hrs 125% of normal wages per hr for over time Maximum working hours of 56hrs per week Minimum wages ₹11,587 /month
- 23. PESTLE • ENVIRONMENT The environment (protection) Act, 1986 Pollution free technology Recycling of industrial wastes
- 24. THANK YOU!
Editor's Notes
- NIMZ were set up under the National Manufacturing Policy with the aim of increasing the share of manufacturing in the country’s GDP from 16% to 25% by 2022 and also to create 100 million additional jobs in the next decade. NIMZs have World-class infrastructure that would be autonomous and self-regulated, developed in partnership with the private sector. NIMZs would have around 5000 hectares. Land would be selected by State Govt, preferably uncultivable land. Has an easy exit policy and single window clearances. Flexible labor laws. Incentives for green manufacturing. (2011) SITPs were set up in 2005 to create. Private investments in the sector. 40 Parks have been approved of which 14 have been completed.
- Indian government allows 100% FDI in the country’s textile and apparel market
- Gugo boss, diesel started its ops in India. GST rates for garments and made up articles is 5% of sale value not exceeding Rs. 1000 per piece and 12% for articles of sale value exceeding Rs. 1000 per piece. The GST rates are lesser than the pre-GST incidence of taxes on these goods. To reduce the cost of garment industry, GST rate on manmade fiber yarns has been reduced from 18% to 12%. AFT –ppp, Creation of new service centers on Public Private Partnership (PPP) model- for knitting
- Rising middle class in India , Social stratification involves not just inequality but beliefs as well, 50% of population below 25
- 60-75 m people work in this industry
- polyvinyl chloride to size fabrics, chlorine bleach to lighten a fabric's color, benzidine and toluidine as dyeing agents and flame retardants, Cyclic Activated Sludge process