2. 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:-
3.
4. 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.
Labour
Cheap labour and strong entrepreneurial skills have always been the backbone of the
Indian Apparel and textile Industry.
Flexibility
The small size of manufacturing which is predominant in the apparel
industry allows for greater flexibility to service smaller and specialized
orders.
5. Rich Heritage
The cultural diversity and rich heritage of the country offers good inspiration
base for designers.
Domestic market
Natural demand drivers including rising income levels, increasing urbanisation
and growth of the purchasing population drive domestic demand.
6. WEAKNESS
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.
Spinning Sector
Spinning sector lacks modernization and there is a need of introducing new
technology.
Weaving Sector
India has relatively less number of shuttle-less loom.
7. Fabric Processing
Processing is the weakest link in the Indian textile value chain, adversely
affecting its ability to compete in exports.
Poor Infrastructure
High power costs and long export lead times are eroding India’s export
competitiveness across the textile chain.
Low Labour Productivity
Productivity levels for manufacturing various apparel items are far lower in
India in comparison with its competitors.
8. OTHER WEAKNESSSES:-
• Less attention on man power training
• Poor quality standards
• Distance of the potential market
• Lower average consumption in domestic market
• Lack of professionalism and integration of supply chain
• Dependence on quota system
• Very low investment on R&D
• Limited exploitation of economies of scale
9. OPPORTUNITIES
Growing Industry
World textile trade would continue to grow at a rate of 3-4% to reach $200-210
billon by 2010.
Market access through bilateral negotiation
The trade is growing between regional trade blocs due to bilateral agreements
between participating countries.
Integration of Information technology
‘Supply Chain Management’ and ‘Information Technology’ has a crucial role in
apparel manufacturing. Availability of EDI (Electronic Data Interchange),
makes communication fast, easy, transparent and reduces duplication.
10. Opportunity in High Value Items
India has the opportunity to increase its UVR’s (Unit Value Realization) through
moving up the value chain by producing value added products and by
producing more and more technologically superior products.
11. THREATS
Decreasing Fashion Cycle
There has been an increase in seasons per year which has resulted in
shortening of the fashion cycle.
Formation of Trading Blocks
Formation of trading blocks like NAFTA, SAPTA, etc; has resulted in a change in
the world trade scenario. Existence of bilateral agreements would result in
significant disadvantage for Indian exports.
Phasing out of Quotas
India will have to open its protected domestic market for foreign players thus
domestic market will suffer.
14. TEXTILE INDUSTRY KEY FACTS
• Indian Textile Industry is highly fragmented industry; at the same time it is an
independent and self-reliant industry that has shown sustainable growth over the
years.
• Indian textile Industry is valued at US$ 36 Billion with exports of US$ 17 Billion in
2005-2006.
• The Indian Textile Industry plays vital
role in economic development and
contributes 14% to industrial
production in the country.
15. • Indian Textile Industry is second largest industry in terms of providing vast
employment opportunities and employs around 35 million people in country after
agriculture sector.
16. • Textile Industry contributes around 4% of GDP, 9% of excise collections, 18% of
employment in industrial sector, and has 16 % share in country’s export.
• Industry contributes around 25% share in the world trade of cotton yarn. India is
evolved as a major contributor in world’s cotton sector. Indian is the world’s third-
largest producer of cotton and second-largest producer of cotton yarns and textiles.
• India is the largest exporter of yarn in the international market and has a share of 25%
in world cotton yarn export market.
• India contributes for 12% of the world’s production of textile fibers and yarn.
• Highly Fragmented, High dependence on cotton sector, Lower productivity,
Unfavourable Labor Laws are few drawbacks of the industry from which it has to
overcome.
17. • Indian textile industry is second largest after China, in terms of spindle age, and has
share of 23% of the world’s spindle capacity. India has around 6% of global rotor
capacity.
• The country has the highest loom capacity, including handlooms, and has share of
61% in world loom age. Including textiles and garments, 30% of India’s export comes
from this sector.
• Indian Textile Industry is one of the largest industry that provides high exports and
foreign revenue.
• Large and potential domestic & international market, large pool of skilled and cheap
labor, well-established industry, promising export potential etc. are few strengths of
Indian Textile Industry.