The Indian textile industry is one of the largest industries in India, contributing 14% to industrial production and employing over 35 million people. It has strong historical trade relations with the European Union (EU), which is now India's largest export market for textiles. However, the industry also faces challenges like outdated technology and competition. The government has introduced initiatives like the Technology Upgradation Fund Scheme to support the industry. While trade with the EU has grown significantly in recent decades, the economic crisis since 2008 has led to a decline in production and exports for both India and the EU. The industry is focusing on moving to higher value products and the EU remains an important future export market.

1. THE INDIAN TEXTILE INDUSTRY and ITS RELATIONS WITH European UnionPresented by:-Pallavi Gupta 500901036 ShrayJali 500901062 Sumit Sharma 500901063

2. Roadmap of the PresentationWhy did we choose the Indian textile industry?SWOT Analysis of Indian Textile IndustryAgreements related to textilesGovernment initiativesEuropean UnionIndia- EU trade relationsConclusion

3. Why Indian Textile Industry?Sunrise SectorThe textile industry is the one of the largest industries of modern India as it contributes about 14 % to industrial production, 4 % to the country's GDP 17 %to the country’s export earnings 12% share of the country's total exports basket [Source: Annual Report 2009-10 of the Ministry of Textiles]Single largest employer in the industrial sector employing over 35 million people

4. Indian Textile Industry

6. VisionTo ensure the growth of the Indian textile industry at 16 percent per annum in value terms, to US$ 115 billion, by the end of the Eleventh Five Year Plan (2007-2012)To secure a 7 percent share in global textile trade by the end of the Eleventh Five Year Plan.Source: planningcommission.nic

7. Catalysts for exponential growthBuoyant Domestic economySubstantial increase in cotton productionGovernment PoliciesTUFSQuotasExpiration of MFA on 31st Dec’ 2004

8. Problems and ChallengesSicknessObsolete TechnologyCotton grown per hectare of land is very lowCompetition from man-made fibers

9. FDI in TextilesFDI in Textiles[Source: cci.in]

10. Export Promotion CouncilsApparel Export Promotion Council (AEPC)Sponsored by Ministry of TextileMonitors Quotas and conducts trade fairsCotton Textile Export Promotion CouncilAutonomous, non-profit export promotion councilInternational face of Indian textileHandloom Export Promotion CouncilStatutory bodyIndian Silk Export Promotion Council

11. SWOT ANALYSIS

12. Strengths Independent and self-reliantVertical and horizontal integrated textile value chainGlobally competitive spinning industryLow wagesUnique strength in traditional handlooms and handicrafts

13. WeaknessesHighly fragmented and technology backward textile processing sectorExcept spinning, all other segments are predominantly in decentralized sectorRigid labour lawsInfrastructural bottlenecks in terms of power, utility, road transport, port handling capacities etc.Higher taxes and interest rates

14. OpportunitiesLarge potential domestic and international marketRevolution in organized retailingIncreased disposable incomeAvailability of cheap financeEmerging retail stores and malls

15. Global recession triggered by a weakening dollarHigher competition from China, Pakistan, BangladeshNon-availability of indigenous textile machinery.Lack of domestic capital

16. Porter Diamond Model

17. Abundant availability of raw material

18. Low cost

19. Flexibility

20. Skilled labour

21. Ability to produce customized apparels

22. Dominated by unorganized sector

23. Highly competitive and fragmented

24. Entry of foreign players

25. Large domestic potential

26. Favourable demographics

27. Growing income and purchasing power

28. Growth of organized retail malls

29. Product development /design

30. Cheap and abundant raw material

31. Well developed IT capabilities

32. Developed textile machinery industryAgreements related to textiles

33. Multi fiber agreement (MFA)On January 1st 1974, the Arrangement Regarding the International Trade in Textiles known as the MFA came into force.

34. Non-Tariff Barriers

35. Short –term agreement

36. Agreement on Textiles and Clothing (ATC)Post MFA/ ATC ScenarioIn 1993, a study found that the price of cotton yarn per kilo was cheapest in India at US$ 2.79

37. In US textile and apparel imports, China and Hong Kong had higher market shares than India.

38. The effect of trade liberalization on India :

39. increased output

40. employment

41. increased profitsGovernment Initiatives

42. TUFS Introduced on 1999

43. To overcome technological obsolescence and create economies of scale

44. Transition from quantitatively restricted textiles trade to market-driven global merchandise

45. Crucial for all the inter-connecting sectors such as spinning, weaving, knitting, processing and garmentingMoney Sanctioned under TUFS

46. Launched to create new textile parks of international standards.Merging of APE & TCIDSObjective:to provide the industry with world-class infrastructure . SITP

47. EUROPEAN UNION

48. Birth of European UnionAfter the second world war, Politicians in several countries of Europe were convinced that the only way prevent another war in Europe is to unite the countries economically and politically

49. European Union Members

50. Characteristics of European UnionSingle currency managed by European Central Bank (12/27 members)Free movement of persons, goods, services and capitalCommon Agricultural, Trade, Fisheries, Foreign and Security Policy

51. India-EU Trade Relations

52. IntroductionRelations between ancient India, Greek, and Roman empires are 2000 years old.Relations between India and EU began in 1963 with EEC

53. EU AND INDIAThe year 2009 marked 46 years of formal relations between India and the EU.

54. India is one of the growing economies.

55. The EU is India’s first and largest partner.

56. India-EU Round Table is a significant steps towards greater mutual cooperation in all fields.EU-INDIA Merchandise Trade

57. Overall Cooperation Framework Between The EU And IndiaIn 2004 India became one of the few EU “strategic partners”.

58. In addition to multilateral and bilateral negotiations with India, the European Commission works on a day to day basis.

59. To assist India in continuing its efforts to better integrate into the world economy.The EU-India FTAIndia was an obvious partner for one of the new generation of EU FTAs launched as part of the Global Europe strategy in 2006.

60. Negotiations for such FTA were launched in June 2007 and, so far, nine negotiating rounds have been held.INDIA TRADE WITH EUEU-India trade has grown impressively over the years.

61. The EU accounts21% of India’s total exports16% of India’s total imports.India accounts for a more limited but rapidly growing share of EU trade: 2.4% of EU’s total exports 1.9 % of the EU’s total imports.India ranked 10th in the list of the EU’s main trading partners in 2008, up from 15th in 2002.EU-India trade:- €28.6billion in 2003 to over €55billion in 2007.EU investment to India:- €759million IN 2003 to €2.4billion in 2006.EU- India trade in commercial services:- €5.2billion in 2002 to €12.2billion in 2006Trade in goodsEU goods exports to India 2009: €27.5 billionEU goods imports from India 2009: €25.4 billionTrade in servicesEU services exports to India 2009: €8.6 billionEU services imports from India 2009: €7.4 billionForeign Direct InvestmentEU outward investment to India 2009: €3.2 billionIndian inward investment to EU 2009: €0.4 billionEU technical and financial trade assistance to India €13.4million

62. In 2003, the overall global trade in textiles and clothing amounted to US $ 385 billion, of which textiles alone contributed 43%.

63. Developed countries contribute about one third of the total global exports of textile and clothing.

64. List of products and services which are exported from India.

65. India’s export stats to the world.

66. India Export to EU.Global Trade in Textile and Clothing

67. Indian Export Of Textiles To EU EU overpowered USA as becoming the largest market for textiles and clothing.

68. Asia predominates the EU market in both clothing and textiles, with 30% and 17 % share.

69. India is one of the leading suppliers of textile products and ranked fourth with a market share of 5.2% (US $ 0.45bn).

70. Implications on Indian Exports.Effects Of The Economic Crisis Since 2008Production as well as consumption levels have experienced a sharp decrease from June 2008 to June 2009.

71. For the entire year 2009 a general decrease of 11% .

72. EU Textile and Clothing export figures, exports have decreased by 17% with a decline of textile exports by 18% and by 16% of clothing exports.

73. Since July 2009 a slow stabilization of these levels can be observed and since January 2010 a recovery is observed.According to FICCI, 71% of participating companies have said their organization perceives the EU as an important export market.

74. Present status of doing business with central and Eastern Europe, according to industry response:-

75. Plans for exporting the EU, Of the companies that are not presently exporting to the EU , 85% intent to export to this region in the near future. European Union-An important export destination

76. European Union-An important export destinationAccording to FICCI, 71% of participating companies have said their organization perceives the EU as an important export market.

77. Present status of doing business with central and Eastern Europe, according to industry response:-

78. Plans for exporting the EU, Of the companies that are not presently exporting to the EU , 85% intent to export to this region in the near future. Strategies to enter into EUThere are tremendous opportunities. As per FICCI India’s trade volume with each country can easily de doubled in less than three year.Uniform trade regulations.A uniform duty structure.Common technical specification.In those countries that have joined the EU there is a big possibility of entering into joint ventures as well as outsourcing services from these countries.

79. Good time to set up representative offices in these countries and undertake tailor-made marketing campaigns.conclusionInvest in research and development.

80. India needs to move from the lower-end markets.

81. The government also needs to make policy changes like dereserving the small-scale sector.

82. Handlooms by their very nature can adopt a strategy of “niche” marketing.

83. Need for a cradle-to-grave approach.

84. Efficiency and output of handloom and power loom sectors also needs to be increased.Referencescommerce.nic.inwto.orgplanningcommission.nictexmin.nic.inaepcindia.comworldtradelaw.netec.europa.eu