The Indian textile industry is one of the
largest in the world with a massive raw material and textiles manufacturing
base. Our economy is largely dependent on the textile manufacturing and trade
in addition to other major industries. About 27% of the foreign exchange
earnings are on account of export of textiles and clothing alone. The textiles
and clothing sector contributes about 14% to the industrial production and 3%
to the gross domestic product of the country. Around 8% of the total excise
revenue collection is contributed by the textile industry. So much so, the
textile industry accounts for as large as 21% of the total employment generated
in the economy. Around 35 million people are directly employed in the textile
manufacturing activities. Indirect employment including the manpower engaged in
agricultural based raw-material production like cotton and related trade and
handling could be stated to be around another 60 million.
Organization of the textile industry:
Unlike other major textile-producing countries, Indias textile industry is comprised mostly of small-scale, nonintegrated spinning,
weaving, finishing, and apparel-making enterprises.
This unique industry structure is primarily a
legacy of government policies that have promoted labor-intensive, small-scale
operations and discriminated against larger scale firms.
Overview of the structure of Indian textile
- Composite Mills: Relatively large-scale mills
that integrate spinning, weaving and, sometimes, fabric finishing are
common in other major textile-producing countries. In India, however, these types of mills now account for about only 3 percent of output in the
textile sector. About 276 composite mills are now operating in India, most owned by the public sector and many deemed financially sick.
- Spinning: Spinning is the process of
converting cotton or manmade fiber into yarn to be used for weaving and
knitting. Largely due to deregulation beginning in the mid-1980s, spinning
is the most consolidated and technically efficient sector in Indias textile industry. Average plant size remains small, however, and technology
outdated, relative to other major producers.
- Weaving and Knitting: Weaving and knitting converts
cotton, manmade, or blended yarns into woven or knitted fabrics. Indias weaving and knitting sector remains highly fragmented, small-scale, and labor
This sector consists of
about 3.9 million handlooms, 380,000 power loom enterprises that operate
about 1.7 million looms, and just 137,000 looms in the various composite mills.
Power looms are small firms, with an average loom capacity of four to five
owned by independent entrepreneurs or weavers. Modern shuttle less looms
account for less than 1 percent of loom capacity.
- Fabric Finishing: Fabric finishing (also
referred to as processing), which includes dyeing, printing, and other
cloth preparation prior to the manufacture of clothing, is also dominated
by a large number of independent, small scale enterprises. Overall, about
2,300 processors are operating in India, including about 2,100 independent
units and 200 units that are integrated with spinning, weaving, or
- Clothing: Apparel is produced by about
77,000 small-scale units classified as domestic manufacturers,
manufacturer exporters, and fabricators (subcontractors).
Public and Private sectors
Public Sector is an area where enterprises/
organization, investment and management of it are controlled entirely by
Government. Majority of Board of Directors are Govt. Nominees/officials. Where
as in private sector Manufacturing units or establishment has control entirely
by private individuals. Their boards of directors do not include any govt
officials, except one or two members from lending financial institutions.
Major Public and Private Sectors of textile
Cotton marketing (seed cotton and cotton lint)
in India is predominantly handled by the private sector (traders and
cooperatives). Although cotton trade is largely private, it is mostly regulated
by the GOI and State governments. There are three groups in the marketing of
cotton: private traders, state level cooperatives, and the Cotton Corporation
of India (CCI).The spinning sector is comprised of composite mills and
independent mills. In 1994-95, production capacity in the spinning industry
reached 30 million spindles, 70% of which was in the private sector.