Indian Textile Industry

By, Virji Uplana(94)Mukesh Chaudhary(46)

Vardhy Tandel(89)Vijay MakvanaApurv katariya(57)

Introduction

industry is worth over US$ 4395 billion . Global trade in this industry is now at US$ 350

billion. Among the countries, Japan, Australia and New

Zealand are the significant consumers of Indian textiles.

India ranks second with 8 percent of the total.

High production of wool, cotton and silk over the world has boosted the industry in recent years.

History The term 'Textile' is a Latin word originating from the

word 'texere' which means 'to weave'

The history of textile is almost as old as that of human civilization.

In India the culture of silk was introduced in 400AD . modern textile industry took birth in India in the early

nineteenth century The first cotton textile mill of Bombay was established

in 1854 during the year 1900 the cotton textile industry was in

bad state After independence, the cotton textile industry made

rapid strides under the Plans

Five years outlook

222.0 304.2

7.8

24.3

3.5

8.0

100.0

200.0

300.0

400.0

2005 P 2010 P

US

D B

illi

on

1.5

2.5

3.5

4.5

5.5

6.5

7.5

8.5

Per

cen

t

Total retail industtry Organised Penetration

SWOT Analysis Strengths: Indian Textile Industry is an Independent & Self-

Reliant industry. Abundant Raw Material availability that helps industry to

control costs and reduces the lead-time across the operation.

Availability of Low Cost and Skilled Manpower provides competitive advantage to industry.

Availability of large varieties of cotton fiber and has a fast growing synthetic fiber industry.

India has great advantage in Spinning Sector and has a presence in all process of operation and value chain.

SWOT Analysis Weaknesses: Indian Textile Industry is highly Fragmented Industry. Industry is highly dependent on Cotton. Lower Productivity in various segments. There is Declining in Mill Segment. Lack of Technological Development that affect the productivity

and other activities in whole value chain. Infrastructural Bottlenecks and Efficiency such as, Transaction

Time at Ports and transportation Time. Unfavorable labor Laws. Lack of Trade Membership, which restrict to tap other

potential market. Lacking to generate Economies of Scale. Higher Indirect Taxes, Power and Interest Rates.

SWOT Analysis Opportunities: Growth rate of Domestic Textile Industry is 6-8% per

annum. Large, Potential Domestic and International Market. Product development and Diversification to cater global

needs. Elimination of Quota Restriction leads to greater Market

Development. Market is gradually shifting towards Branded Readymade

Garment. Increased Disposable Income and Purchasing Power of

Indian Customer opens New Market Development. Emerging Retail Industry and Malls provide huge

opportunities for the Apparel, Handicraft and other segments of the industry.

Greater Investment and FDI opportunities are available.

SWOT Analysis Threats: Competition from other developing countries, especially

China. Continuous Quality Improvement is need of the hour as

there are different demand patterns all over the world. Elimination of Quota system will lead to fluctuations in

Export Demand. Threat for Traditional Market for Powerloom and

Handloom Products and forcing them for product diversification.

Geographical Disadvantages. International labor and Environmental Laws. To balance the demand and supply. To make balance between price and quality.

The shape of the textile industry in India

Large Industry – 3% of GDP, 27% of Forex earnings, 21% of total employment

Very large unorganised sector – about 76% of total fabrics production

Market is very diverse, does not lend itself to comparative studies in terms of market share etc.

The global scenario

The end of the MFA arrangement Competitiveness of Indian industry

• Low level of modernization• Fragmented nature – low capacities• Infrastructure, Labour laws

Exports have risen by 10% but at the same time China’s exports have risen by more than 20%, even countries like Pakistan and Bangladesh have done better

Cont…

The light at the end of the tunnel

China muzzled Viable option for those looking to

spread out risk Indian govt waking up Domestic market projected to grow

as well

Major players

Arvind Mills Arvind Mills is one of the fully vertically

integrated players in India. It has large capacities in denim, shirting

and knitted garments. Adding value by manufacturing denim

apparel. Its sales are around US$ 300 millions with

little less than 9% profitability

Raymonds

Raymonds has the large integrated business model, across the value chain from yarn to retail.

It already supplies to some US retailers. it second largest denim player in India. Its annual sales are around US$ 300

millions with little less than 7 % profitability.

Vardhaman Spinning

Vardhman has capacities in spinning, weaving and processing.

It is planning to double its fabric processing capacity to 50 million meters.

It is an approved supplier to global retailers like GaP, Target and Tommy

Hilfiger. Its sales are little over US$ 120 millions

with 6.5% profitability.

Welspun India

Welspun is among the top five manufacturers of terry towels in the world

It sells its products in 24 countries It is supplier to retailers such as Wal-Mart, J C

Penny, and Shopko. Its revenues are little over US$ 100 millions

with little less than 8%profitability.

Conclusion A huge window of opportunity has opened up for the

Indian textile industry . Various players need to get act together.

Government is playing the role of facilitator by taking

various majors. It’s now for players to make investments in building the capacities and making them integrated

manufacturers. The industry enjoys significant strength and

advantages, such as availability of raw materials, labour, domestic market and supportive government policies.

Thank you