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Textile Industry Analysis


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Textile Industry Analysis in INDIA

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Textile Industry Analysis

  1. 1. TEXTILE INDUSTRY Presented By Group 1
  2. 2.  India’s textile industry is one of the economy’s largest.  The industry scenario started changing after the economic liberalization of Indian economy in 1991.  It has now become the largest industries in the world.  Indian textile industry contributes about 14 % to industrial production.  4% to country’s gross domestic product. 17% to country’s export earnings  Provides direct employment to over 35 million people  The textile industry of India also contributes nearly 14% of the total industrial production of the country.  It also contributes around 3% to the GDP of the country  It is the largest provider of employment after agriculture. Facts of Indian Textile Industry
  3. 3. HISTORY  English inventors in the 18th century began to automate textile cottage industry processes including carding, spinning and weaving.  James Hargreaves developed the Spinning Jenny, a device which replaced eight hand spinners in one operation. Richard Arkwright assembled these processes and started the first factory on the Derwent River in Cromford, England in 1771.  In the early 1800s, cotton was raised in the southern United States and exported to mills in England and the north. .  In 1814, James Cabot Lowell of Boston built a factory in Waltham, up the Charles River from Boston.  Later, the Boston Associates built an entire mill town on the Merrimack River, and later named it "Lowell" in memory of James Cabot Lowell.  In the 1990s, a new world order began to replace. Buying from the lowest cost producer drove many textile manufacturers out of the production side and into imports.
  5. 5.  Indian textile industry can be divided into several segments, some of which can be listed as below:  Cotton Textiles  Silk Textiles  Woollen Textiles  Readymade Garments  Hand-crafted Textiles  Jute and Coir
  6. 6. SWOT ANALYSIS STRENGTH  India has rich resources of raw materials of textile industry. It is one of the largest producers of cotton in the world and is also rich in resources of fibres like polyester, silk, viscose etc.  India is rich in highly trained manpower. The country has a huge advantage due to lower wage rates. Because of low labour rates the manufacturing cost in textile automatically comes down to very reasonable rates.  India is highly competitive in spinning sector and has presence in almost all processes of the value chain.
  7. 7. WEAKNESS  Knitted garments manufacturing has remained as an extremely fragmented industry. Global players would prefer to source their entire requirement from two or three vendors and the Indian garment units find it difficult to meet the capacity requirements.  Industry still plagued with some historical regulations such as knitted garments still remaining as a SSI domain.  Labour force giving low productivity as compared to other competing countries.  Low bargaining power in a customer-ruled market.
  8. 8. OPPORTUNITY  Low per-capita domestic consumption of textile indicating significant potential growth.  Domestic market extremely sensitive to fashion fads and this has resulted in the development of a responsive garment industry.  India's global share is just 3% while China controls about 15%. In post-2005, China is expected to capture 43% of global textile trade.  Companies need to concentrate on new product developments..
  9. 9. THREATS  Competition in post-2005 is not just in exports, but is also likely within the country due to cheaper imports of goods of higher quality at lower costs.  Standards such as SA-8000 or WARP have resulted in increased pressure on companies for improvement of their working practices.  Alternative competitive advantages would continue to be a barrier
  10. 10. FACTORS AFFECTING TEXTILE INDUSTRY Textile Industry Rivalry Demand Conditions Cost & Location Government Regulation Policy
  11. 11. India’s Position in World Textile Economy
  12. 12. Recent Developments  Bangladesh is planning to set up two special economic zones (SEZ) for attracting Indian companies in view of the duty free trade between the two countries.  Italian luxury major Canali has entered into a 51:49 joint venture with genesis luxury fashion, which currently has distribution rights of Canali branded products in India . The company will now sell Canali branded products in India exclusively
  13. 13. Performance of the Textile Industry  The industry which was growing at 3-4 percent during the last six decades has now accelerated to the annual growth rate of 9-10 percent but various factors have effecting annual growth rate of textile Industry, Global recession is one of them.  The impact of the global and domestic economic slow down directly affect the performance of the industry.  Index of industrial production (IIP) data has been released by the central statistical organization (CSO) shows a dismal picture of textile production.
  15. 15. Export scenario  Developed countries' exports declined from 52.2% share in 1990 to 37.8 % in 2002. And that of developing countries increased from 47.8% to 62.2 % in the same period.  In 2003 the exports figures in percentage of the world trade in Textiles Group (for select countries) were:
  16. 16. INDIAN TEXTILE EXPORTS 2014 45% 25% 18% 4% 18% 2% 2% ready garment cotton textile Man-made textiles handi crafts silk & handloom Wool & Woolen textiles others
  17. 17. India’s Textile Exports (in US$ billion) 17.6 19.1 22.1 21.2 22.4 26.8 0 5 10 15 20 25 30 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
  18. 18. Textile Export Statistics Financial year Textile exports US$ Millions Total exports US$ Millions Percentage of textile exports 2004-2005 14026.72 83538.95 16.79% 2005-2006 17520.07 103090.53 16.99% 2006-2007 19146.04 126262.68 15.16% 2007-2008 19558.53 143567.86 13.62% 2008-2009 18519.96 153018.22 12.10% 2009-2010 22418.00 178751.43 12.54%
  19. 19. MAJOR PLAYERS IN TEXTILE INDUSTRY Company Business area Welspun India LTD Home textile,bathrobes, terry towels Vardhman group Yarn, fabric, sewing threads, acrylic fiber Raymond Ltd. Tailored clothing,denim,shirting, woolen outerwear Bombay dyeing & manufacturing ltd.compqny Bed linen, towels, shirts, dresses, and saris in cotton and polyster blend ITC lifestyle Lifestyle market Reliance industries Ltd. Fabric, formal men's wear
  20. 20. Problems Of Textile Industry in India  The plant and machinery and technology by a number of units are absolute.  Government regulations like the obligation to produce controlled cloth are against the interest of the industry.  The cotton yield per hectare of land is very low in India.  Competition from the man made fabrics and synthetics.  India has been facing severe competition from other countries like Taiwan, South Korea, China and Japan.  The industry faces number of other problems like power cuts, infrastructural problems, lack of finance, exorbitant rise in raw material prices and production.
  21. 21. Government Initiates and Regulatory Framework  The government has offered health insurance coverage to 161.10 million weavers and ancillary workers under handloom weavers comprehensive scheme.  As per the 12th year five year plan, the integrated skill development scheme aims to train over 2675,000 people within next 5 years.  As per the credit guarantee program, over 25000 artisans credit cards have been supplied to artisans and 16.50 million additional applications for issuing credit cards have been forwarded to banks .  The Indian government has given approval to 40 new textiles parks to be set up and this would be executed over a period of 36 months.  The new textiles park would leverage employment to 400,000 textile workers
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