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Export Competitiveness of Indian textile industry

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  2. 2. Introduction It contributes 14% to the industrial production  4% to the country's gross domestic product (GDP)  17% to the country‟s export earnings.  Long tradition of excellence in textile  It provides direct employment to over 35 million people  It is the second largest provider of employment after agriculture. India earns about 27% of its total foreign exchange through textile exports.
  3. 3. Scope & Objectives of the study The objective of this study is to assess the competitiveness of Indian textile industry. India‟s textile industry is one of the economy‟s largest. India possesses many strengths and opportunities in textile sector. The industry is inherent with lot of experience, availability of cheap labour, abundant raw material and supporting government initiatives. Find out the competitor of India in world Export.
  4. 4. Industry Profile  India is the largest producer of jute  The top exporter of cotton yarn with share of 25% in the world trade  It is the second largest producer of cotton yarn and silk  It has the second largest spindalge in the world  The largest producer of cotton  It is the fifth largest of synthetic fiber/yarn
  5. 5. Major Players  Vardhman Textiles: Biggest world class textile group manufacturing varied range of goods for the global textile market.  Welspun India: Ties with 12 major retailers for its products.  Century mills- Asia‟s largest composite 100 per cent cotton textile mill.  Bombay Dyeing: one of the largest producers of textiles. It produces various products.
  6. 6.  Aditya Birla Group: Most diversified conglomerate Its key business segments include viscose filament yarn (VFY), carbon black, branded garments, textiles and insulators with its manufacturing units.  Raymond Ltd: US$ 300 million plus conglomerate more than 60% of market share in India, Raymond Ltd. is today the largest integrated producer of fabric in the world.  Alok Industries: Manufacturer of best apparel fabrics.
  7. 7. Major Production Center's  Amritsar  Phagwara  Ludhiana  Bhiwani  Delhi  Faridabad  Modinagar  Kanpur  Kolkata  Ahmadabad  Surat  Mumbai  Bengaluru  Chennai  Coimbatore  Madurai  Raurkela  Tirrupur
  8. 8. Research Methodology  REVEALED COMPARATIVE ADVANTAGE (RCA) is used by BALASSA in 1965.  It is commonly used measure of export competiveness.  RCA is calculated as the ratio of a country„s export share in world trade for a specific commodity or a group of commodities.  RCA for country “I” and commodity “j” (vis-à-vis the world) is given as: RCAij = (Xij/Xwj)/(Xi/Xw)
  9. 9. Where,  Xij = ith country„s export of commodity „j‟  Xwj= world export of commodity „j‟  Xi = total exports of country „I‟  Xw = total world export  Revealed Comparative Advantage:  India to World / World to World (TEXTILE) India to World / World to World (All Products)
  10. 10.  TEXTILE include 11 sub items in the category which can be seen in the below table. HS CODE 59 category group named Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use.
  11. 11.  India Export:  The above figure represents the year exports of TEXTILE of India, also the total of exports from 2004-12. The figures are taken from INTRACEN.ORG, the figure here represents the total of TEXTILE exports from India to rest of the world. This figure includes the total 11 sub items of TEXTILE sector
  12. 12.  World Export:  The above figure shows the year on year exports of TEXTILE over the world, with the total of exports from 2004-12. The figure represents the total of exports around the world, a total of all countries and also the sum of exports from year 2004- 12. It includes 11 sub items of TEXTILE sector.
  13. 13.  The RCA has been calculated on each items of HS code 59 which can be seen in the above table.  From the above table, values which are = / > then 1, has the RCA
  14. 14. Export Growth 0 0.5 1 1.5 2 2.5 Exported RATIO in 2004 Exported RATIO in 2005 Exported RATIO in 2006 Exported RATIO in 2007 Exported RATIO in 2008 Exported RATIO in 2009 Exported RATIO in 2010 Exported RATIO in 2011  The growth ratio of TEXTILE exports of India year on year is shown in the above graph, keeping the base year 2004. The graph explains that the trend of growth of exports of TEXTILE is moving upwards but with a slow pace yet it is increasing.
  15. 15. Findings &Analysis  China is the biggest threat for India.  Infrastructure: China is much ahead of India. The Chinese Government has been investing a lot as compared to India for the development  Labour reforms: The labour reforms in India are extremely stringent which hampers the growth of textile manufacturers to a great extent.
  16. 16.  International trade trends: China has much more better FORIGN TRADE POLICY then India that gives them an edge in export market.  Taiwan, Mexico, Bangladesh, South Korea, Indonesia and Pakistan are also emerging rivals.
  17. 17. SWOT ANALYSIS  STRENGTH  Low cost labour force.  Rich resources of Raw material.  Growing domestic and international market.  WEAKNESS  Fragmented Industry  Unskilled labour force.  Technological Obsolescence
  18. 18.  Opportunity  Indian companies need to focus on Product Development.  The organized retailing in India will further fuel demand of apparel in the country.  Large, potential domestic and international market.  Threat  High competition mostly from China.  Non-availability of technical resources.
  19. 19. Recommendations  Setting up Textile Industries oriented SEZs  Starting up new courses like Textile Manufacturing and Textile Technology at ITIs and Engineering Institutes  Liberalized labour laws, tax and other benefits of a Special Economic Zone need to be implemented  Access to high quality and cost-effective manpower  Excellent connectivity by road, rail air and ports  Single-window clearance
  20. 20. Conclusion  Indian textile industry, which is one of the oldest sectors and hold great significance for its economy.  Indian textile industry its major marketplaces are Europe and US.  India to be the market leader needs to surpass China, which is its biggest competitor.  High investment in R&D to launch new products
  21. 21.  For higher productivity it is imperative that the workforce should be skilled and educated.  The Indian textile industry is presently worth $ 47 billion and its continual expansion has led the government to lengthen the Technology Up gradation Fund Scheme.  The future prospects of the Indian domestic market are also very promising, with strong increase in GDP.  Above mentioned all the factors will help the country to become a highly competitive player in global textile market.
  22. 22. THANK YOU