|Dr. M. Dhanabakyam|
Lecturer in Commerce
Department of Commerce
Coimbatore – 46
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Ph. No: 09345163052
Department of Commerce
Coimbatore – 46
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Ph. No: 099994500266
The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country. Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 17 percent to the country’s export earnings. It provides direct employment to about 35 million people, which includes a substantial number of SC/ST, and women. The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this sector has a direct bearing on the improvement of the economy of the country.
ORGANISED COTTON/ MAN-MADE FIBRE TEXTILE INDUSTRY
The Cotton/ Man-made fibre textiles industry is the largest organized industry in the country in terms of employment (nearly 1 million workers) and number of units. Besides, there are a large number of subsidiary industries dependent on this sector, such as those manufacturing machinery, accessories, stores, ancillaries, dyes & chemicals. As on 31.10.2006, there were 1818 cotton/man-made fibre textile mills (non-SSI) in the country.
Over the years, production of cloth in the organized mill sector has been stagnating. It has declined from 1714 mn. sq. mtrs. in 1999-2000 to about 1434 mn. sq. mtrs. in 2003-04. However, since then, it is showing a constant increasing trend; 1526 mn. sq. mtrs. in 2004-05, 1656 mn. sq. mtrs. in 2005-06. In 2006-07, it is anticipated at 1900 mn. sq. mtrs. The total production of cloth by all sectors i.e. mill, powerlooms, handlooms, hosiery and khadi, wool and silk, has shown an up-ward trend in recent years. During 2006-07, the total production of cloth is anticipated to touch 49, 542 mn. sq. mtrs., compared to 52,000 mn. sq. mtrs. in 2005-06. The satisfactory performance of cloth production has resulted in favorable per capita domestic availability of cloth in the country. During 2004-05, the per capita availability of cloth was 32.63 sq. mtrs., and it is expected to increase to 43.33 Sq. mtrs. during 2006-07.
The Indian Textiles Industry has suffered from severe technology obsolescence and lack of economies of scale, which, in turn, had diluted its productivity, quality and cost effectiveness, despite distinctive advantages in raw material, knowledge base and skilled human resources. While the relatively high cost of state-of-the-art technology and structural anomalies in the industry have been major contributory factors, perhaps the single most important factor inhibiting technology up gradation has been the high cost of capital, especially for an industry that is squeezed for margins. Given the significance of this industry to the overall health of the Indian economy, its employment potential and the huge backlog of technology up gradation, it has been felt that in order to sustain and improve its competitiveness and overall long term viability, it is essential that the textiles industry has access to timely and adequate capital, at internationally comparable rates of interest in order to upgrade the level of its technology.
The Technology Up gradation Fund Scheme (TUFS), the flagship scheme of Ministry of Textiles was launched on 01.04.1999. Initially proposed for a period of five years, the scheme has now been extended till 31.03.2007, and is designed to ensure the availability of bank finance at rates comparable to global rates. Under this, the Government reimburses 5% of the interest charged by Banks and Financial Institutions, thereby ensuring credit availability for the up gradation of technology to industry at global rates.
The Government has strengthened and augmented the Technology Up gradation Fund Scheme (TUFS). The allocation for the subsidy component of TUFS was enhanced from Rs.249.00 crores in 2004-05 to Rs. 485.00 crores in 2005-06, registering an increase of 95%. This has been further increased to Rs.835 crores in 2006-07, an increase of 91% over 2005-06. Till 31.10.2006, the Scheme has attracted 6142 applications, involving an investment of Rs 53,003.00 crores. Out of this 5882 applications with a project cost of Rs. 47,580 crore have been sanctioned. As such, this Scheme has created such a great momentum that has resulted into an investment of around Rs. 50,000 crore from the textile industry only under this Scheme. Owing to TUFS only the textile sector is still in an upbeat mood to modernize itself so that it may take on the global competition with confidence.
Textiles exports form 17% of the country’s total export earnings and India’s share in the global textile market and apparel market is 4% and 2.8%, respectively. The Textiles exports basket consists of Ready-made garments, Cotton textiles, Textiles made from man-made fibre, Wool and Woolen goods, Silk, Handicrafts, Coir, and Jute.
POST-MULTI FIBRE ARRANGEMENT SCENARIO
In the post-Multi Fibre Arrangement (MFA) era w.e.f. January 1, 2005, the textiles exports are up by 25% in 2005-06 over 2004-05 The share of textiles exports in USA imports have increase from 4% to 5% in calendar year 2005 as compared to that achieved in calendar year 2004.The share of textiles exports in extra- EU imports increased from 6% to 7% in calendar year 2005, growing at 18% year-on-year basis as compared to 5.6% growth in extra-EU imports. The country in calendar year 2005 was the third largest supplier of textiles to USA and EU. During 2005-06, India’s total apparels exports were US$ 8.63 billions, registering a year-on-year increase of 31%. The country enjoys a higher realization in US markets for apparels of US$ 3.9/ sq. mtrs. as compared to US$ 2.8/sq. Mtrs. for China. The realization has increased in the past two years compare to decline for China.
As per Industry estimates, the investment has picked up in the past two years increasing from Rs. 7349.00 crores in 2004-05 to Rs. 15,032.00 crores in 2005-06. It is estimated that the total investment in the textiles and clothing industry between financial years 2003-06 was around Rs. 42,978.00 crores. To sustain the above growth, the industry would need an investment of Rs. 1,94,000.00 crores (US$ 43 billion) between the financial years 2007-2012, and the industry will potentially generate additional employment for 14 million people, of which 4.4 million would be in apparel sector.
The Government has launched the Scheme for Integrated Textiles Parks (SITP) in August 2005, to strengthen infrastructural facilities in potential growth areas by merging the existing two schemes viz. “Apparel Parks for Exports Scheme (APES)” and “Textile Centres Infrastructure Development Scheme (TCIDS)”. Under the scheme, twenty-six Integrated Textile Parks/projects have been approved with an estimated project cost of Rs. 2411.20 crore, of which Government of India assistance under the scheme would be Rs. 862.55 crore. The estimated investment in these parks would be Rs. 13,445 crore and estimated annual production would be Rs. 19,200 crore. Estimated employment generation would be more than 5 lakh. The projects are expected to be completed by March 2008. Twenty six parks have been sanctioned at Gujarat (6 Nos.), Andhra Pradesh (4 Nos.), Maharashtra (6 Nos.), Tamil Nadu (5 Nos.), Rajasthan (2 Nos.) and one each in Karnataka, Uttar Pradesh, and West Bengal.
JUTE & JUTE TEXTILES INDUSTRY
The Jute industry occupies an important place in the national economy. It is one of the major industries in the eastern region, particularly in West Bengal. Jute, the golden fibre, meets all the standards for ‘safe’ packaging in view of its inherent advantages of being a natural, renewable, biodegradable and eco-friendly product.
Globally, India is the largest producer and second largest exporter of jute goods and this sector support livelihood of about 40 lakh farm families, and provides direct and indirect employment to 4 lakh workers. There are 78 Jute mills in the country, of these 61 are in West Bengal, 3 each in Bihar and Uttar Pradesh, 7 in Andhra Pradesh and one each in Assam, Orissa, Tripura and Madhya Pradesh. Annually, the export of Jute Products amounts to Rs. 1000.00 crores. The production of raw jute varies between 90-100 lakh bales (180 kg.each), and the domestic consumption of jute goods is in the range of 13.5- 14.5 lakh MT. The ratio of domestic consumption to exports is 80:20. The production of jute is concentrated in 36 districts of West Bengal, Orissa, Bihar, Assam, Meghalaya, Tripura and Andhra Pradesh. In 2005-06 jute season (July-June), the production of raw jute was 85 lakh bales and in 2006-07 jute season, it is estimated at 105 lakh bales.
The UPA Government announced the first ever National Jute Policy on April 15, 2005, with the objective of achieving a Compounded Annual Growth Rate (CAGR) of 15% per annum; improving the quality of jute fibre; ensuring value addition through diversified jute products; ensuring remunerative prices to jute farmers and enhancing the yield per hectare.
As envisaged in the National Jute Policy 2005, CCEA has approved in its meeting on 2.6.2006 the Jute Technology Mission to be implemented during 2006-07 to 2010-11 at an estimated cost of Rs. 355.55 crores, and establish a National Jute Board at Kolkata by merging the Jute Manufactures Development Council (JMDC) and the National Centre for Jute Diversification (NCJD). Steps have also been initiated to set up a National Institute of Natural Fibres and a National Jute and Jute Geo- Textiles Museum. The Minimum Support Price (MSP) for raw jute has been increased to Rs. 1000.00 per quintal in 2006-07, up from Rs. 910.00 per quintal in 2005-06, with a view to protects the jute farmers from seasonal uncertainties, and helps to prevent distress sales by farmers.
COTTON & COTTON TEXTILES INDUSTRY
Cotton is one of the principal crops of the country and is the major raw material for the domestic textile industry. It provides sustenance to millions of farmers and contributes significantly to the country’s export earnings. The country has the distinction of growing all the four cultivated species of cotton viz. Gossypium arboretum, G. herbaceum (called Desi/ Asian cotton), G. hirsutum (American upland types), and G. barbadense (Egyptian type), as also hybrid cottons.
The ratio of the use of Cotton to Man-made fibres and filament yarns by the domestic textiles industry is 56:44. India is the third largest producer of cotton (4.13 mn. metric tonnes), accounting for 16 % of global production, and the cultivated area in the country is the largest in the world (between 88-90 lakhs hectares). The states of Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka and Tamil Nadu accounts for 99% of cotton cultivation in the country. Due to focused support to Cotton growers by the Government, cotton production reached a record high of 243 lakh bales (170 kg. each) in the 2004-05 cotton season (October-September), and is expected to remain the same during 2005-06, despite a reduction in the area under cultivation. The productivity has increased from 399 Kg./hectare in (2003-04) to 463 kg./hectare (in 2004-05), and it is expected to reach 468 kg./ hectare in 2005-06.
Seeing the importance of cotton in the textiles economy, the Technology Mission on Cotton (TMC) was launched on 21.02.2000, to raise productivity, improve the quality, and reducing the cost of production of cotton. The mission will continue till 31.03.2007. The Mission consists of four Mini Missions, of which, the Ministry of Textiles is implementing Mini-Missions III & IV, which involve the development of marketing infrastructure, and the modernization / up gradation of ginning and pressing factories. Under Mini Mission III, there it is proposed to develop 250 market yards. Against this, upto 31.10.2006, 219 market yards have been sanctioned and 106 have been completed. Similarly, under Mini Mission IV, against a target of modernization of 1000 ginning & pressing factories, 821 have been sanctioned, and 493 have been completed.
Handlooms represent the rich and diverse cultural heritage of the country. Their cultural importance pertains to ensuring the preservation of heritage, traditional skills and talent. Their economic importance lies in their high employment potential, low capital investment, high value addition, and potential for export/ foreign exchange earnings. The handlooms provide employment to more than 6.5 million persons, second largest after the agriculture.The production of cloth by the handloom sector during 2004-05 was 5722 mn. Sq. mtrs. and, in 2005-06, it is estimated at 6188 mn. Sq. mtrs. The Government launched “Handloom Mark” on June 28, 2006, for the brand promotion of handloom products. Some of the important schemes being implemented in the sector are: (i) Deen Dayal Hathkargha Protsahan Yojana (DDHY) (ii) Marketing Promotion, (iii) Handloom Export Scheme (iv) Workshed-cum-Housing Scheme, and (v) Weavers Welfare Scheme.
During the tenure of UPA Government, besides the ongoing Schemes, several initiatives have been taken in the handlooms sector which includes launching of (i) Integrated Handloom Cluster Development Schemes (ii) Health Insurance Scheme (iii) Mahatma Gandhi Bunkar Bima Yojana (iv) Handloom Mark Scheme (v) Technology Up gradation Funds Schemes for Handloom Sector and (vi) 10% Rebate Scheme on sale of handloom fabrics. Besides, 273 New Yarn Depots, covering approximately all handloom clusters, have been set up. The platforms in the form of exhibitions/marketing events, wherein weavers can showcase their products for public have been doubled and to improve the credit worthiness of weavers, the Ministry of Textiles have taken up the matter with the Ministry of Finance to provide credit at lowers rate as well as writing off the old debts of the weavers.
Under the Integrated Handloom Cluster Development Scheme, in the first phase, 20 handloom clusters have been set up at an estimated cost of Rs. 40.00 crores at Chirala and Madhavaram (Andhra Pradesh), Bijoinagar (Assam), Bhagalpur (Bihar), Kullu (Himachal Pradesh), Gadag (Karnataka), Thiruvananthapuram (Kerala), Gwalior/Chanderi (Madhya Pradesh), Imphal (Manipur), Bargarh and Sonepur (Orissa), Kurinjipadi, Trichy and Tiruvannamalai (Tamilnadu), Mubarakpur, Varanasi and Barabanki (Uttar Pradesh), Burdwan and Nadia (West Bengal). In 2006-07, 100 additional clusters have been taken up for development.
DECENTRALISED POWERLOOMS SECTOR
The decentralized power looms sector plays a pivotal role in meeting the clothing needs of the country. The power looms industry produces a wide variety of cloth, both greys as well as processed. The production of cloth and the generation of employment have been rapidly increasing in the power looms sector. In 2005-06, it contributed 62% of the total cloth produced in the country (30,254 mn. Sq. mtrs.), and provided employment to about 4.86 million persons, which is approximately 60% of total employment in textiles sector. There are 19.23 lakh Power looms in the country, distributed over approximately 4.30 lakh units. The major powerloom clusters are at Erode, Salem, Madurai, Ichalkarnji, Solapur, Bhiwandi, Malegaon, Burhanpur, Bhilwara, Kishangarh, Ludhiana and Amritsar.
WOOL & WOOLEN TEXTILES INDUSTRY
The woollen textiles industry is a rural based and export oriented industry in which the organized sector, the decentralized sector, and the rural sector complement each other. This industry is employment oriented, providing employment to 27 lakh workers in a wide spectrum of activities. The country is the 7th largest producer of wool, contributing 1.8% to total world production. The anticipated production of indigenous raw wool is estimated at 55.10 mn.kg. (2004-05). Out of the total production of raw wool, only 5% is of apparel grade and 85% is carpet grade and 10% is coarse grade. Since our domestic produce is not adequate, the industry is dependent on imported raw material. Wool is the only natural fibre in which the country is deficient.
A small quantity of specialty fibre is obtained from pashmina goats and angora rabbits. There are about 718 woollen units in the country, the majority of which are in the small scale sector. The Government is implementing the Integrated Wool Improvement Programme (IWIP) for the growth and development of the wool and woolen industry in the country. There are two components in the programme, viz., (i), improvement in wool fibre and (ii), quality processing of wool. The programme is being administered by the Central Wool Development Board (CWDB), Jodhpur, through State Governments organization/ NGOs, and will continue till 31.03.2007.
The Sector provides employment to an estimated 63.81 lakhs artisans, of which 47.42% are female; 24.73% belong to Scheduled Castes, and 12.38% to Scheduled Tribes.
The Working Group on Textiles and Jute for the 10th Plan had projected a growth of employment in the Handicrafts sector @ 3 per cent annually during 10th Five Year Plan period. Thus, it is presumed that 9.29 lakhs more artisans will be employed during the period and by the end of Tenth Plan, total employment provided by the handicrafts sector would be 67.70 lakhs. The production during Tenth Plan increased from Rs. 19,564.52 crores in the year 2002-03 to Rs. 32,108.10 crores in the year 2005-06. Exports, which stood at Rs. 10,933.67 crores in the year 2002-03, increased to Rs.17,276. 71 Crores in the year 2005-06, thus showing a growth of 58.02 per cent during the period registering an annual average growth rate of around 19 per cent. The employment increased from 60.16 lakhs in 2002-03 to 65.72 lakhs in 2005-06 at an estimated annual growth rate of about 3 per cent. The plan expenditure during the period also witnessed a steady growth as is indicated from an expenditure of Rs. 71.65 crores in 2002-03 to Rs. 97.24 crores in 2005-06, with the budget outlay for the year 2006-07 fixed at Rs. 110.00 crores including North-Eastern Region, out of which, upto 1st December2006, Rs. 40.14 crores have been sanctioned.
During 2005-06, the export of handicrafts including Hand Knotted carpets were s. 17,276.71 crore (3006.90 US $ Million) registering an increase of 10.63% in rupee terms and 19.28 percent in dollar terms compared to the corresponding period of 2004-05. The main items, which exhibited increased in exports during 2005-06 areZari and Zari Goods (37.57%), art metalware (8.86%), wood wares (18.29 %) and embroidered and crocheted goods (12.18 %). The export target for 2006-07 has been fixed at Rs. 19,500 crore. During 2006-07 (April – November, 2006), handicrafts exports including carpets, exhibited a growth of 16.70 % in rupee terms and 14.06 % in dollar terms as compared to the corresponding period of 2005-06. The export of handicrafts including carpet during 2006-07 (April – November, 2006), were Rs. 11,250.12 crore.Some of the important schemes implemented for the holistic growth of the handicrafts sector are :- (i) Baba Saheb Ambedkar Hastshilp Vikas Yojana (AHVY); (ii) Design & Technical Upgradation Scheme; (iii) Marketing & Support Services Scheme; (iv) Export Promotion Scheme; (v) Bima Yojana for Handicraft Artisans; (vi) Special Handicrafts Training Programme (SHTP).
In addition to the ongoing schemes, during 2005-06, the Government launched the Credit Guarantee Scheme; the Scheme for setting up of Facility Centre and Electronic- Kiosks; and the Gandhi Shilp Haats Scheme, wherein everyday a marketing platform is provided to handicraft artisans in some part of the country. The Shilp Guru Award is given as a part of recognition to the living legends of creativity for their excellence and contribution. On 9th September, 2006, the Vice President, Shri Bhairov Singh Shekhawat gave away Awards to 29 Ship Gurus selected for the years 2003, 2004 and 2005. Besides, the Indian Exposition Mart, Greater Noida and the Rajiv Gandhi Handicrafts Bhawan, New Delhi, have been set up to, inter alia, provide marketing outlets to artisans as well as state agencies.
SERICULTURE & SILK TEXTILES INDUSTRY
Sericulture is an agro-based industry and is suitable for countries like India, which have a large agriculture base. Being a rural and labour intensive industry, it offers relatively high returns on modest investment. Sericulture activities are generally environment friendly.
India is endowed with all four varieties of silk: Mulberry, Eri, Tasar, and Muga. The silk sector is spread almost all over the country, including remote areas of the North East. Globally, India is the Second largest producer of Silk and contributes about 18% to the total raw silk production. During 2005-06, the production of raw silk was 17,305 mt. against a demand of around 26,000 mt. The sector employs about 6 million people, mainly in rural areas. This sector accounted for the export of Rs. 3158.16 crores in 2005-2006, and the export basket consists of Natural Silk Yarn, Fabrics, Made-ups, Readymade Garments, Silk Carpets, and Silk waste. The total silk production during 2004-05 was 16,500 mt. and exports were Rs. 2,879.56 crores. During 2006-07 (upto September 2006), Bivoltine Silk production reached 501 M.Ts, showing an increase of 35.8 % (369 M.Ts) compared to the production during the same period of the year 2005-06.
During the year 2006-07, up to September, the total Provisional production of all varieties of silk is 9768 M.Ts, showing an increase of 12.1 % as compared to the actual production during the same period of the year 2005-06, i.e., 8714 M.Ts. Provisional production of Mulberry Raw Silk is 8878 M.Ts. in 2006-07 upto Septmebr, showing an increase of about 12.1 % when compared to the same period of the previous year i.e. 7919 M.Ts.. The provisional Silk export earnings up to Agusut 2006is Rs. 1372.68 crores 299 .19 Mn. US $) indicating an increase of 10.2 % over the performance of the same period of the year 2005-06, which was Rs. 1245.96 crores (285.84 Mn. US $).- The Government has launched the Silk Mark Scheme for the brand promotion of Silk, and the Central Silk Board (Amendment) Act, 2006, for regulating the quality of Silk-worm seeds, came into force w.e.f. September 14, 2006.
CENTRAL COTAGE INDUSTRY CORPORATION OF INDIA LTD
The Central Cottage Industries Corporation of India Ltd. (CCIC) is mainly engaged in the marketing of quality handlooms and handicrafts, and develops their market in India and abroad. The Corporation operates through its five showrooms situated in Delhi, Kolkata, Mumbai, Bangalore, and Chennai and has franchisee outlets at Jaipur and Gurgaon. It is expected that CCIC will achieve a record turnover and profit of Rs. 110.00 crores and Rs. 10.25 crores, respectively, during 2006-07.
NATIONAL INSTITUTE OF FASHION TECHNOLOGY (NIFT)
The National Institute of Fashion Technology was set up in 1986 as an autonomous Society in collaboration with the Fashion Institute of Technology (FIT), to prepare and train professionals to meet the requirements of the textile industry. The Institute has pioneered the evolution of fashion business education across the country through its network of seven centres at New Delhi, Bangalore, Chennai, Gandhinagar, Hyderabad, Kolkata, and Mumbai. NIFT, besides conducting regular professional undergraduate and postgraduate programmes in Design, Management and Technology, also offers short duration part-time courses under its Continuing Education Programme.
The National Institute of Fashion Technology Act, 2006 came into force w.e.f. July 14, 2006. This Act provides statutory status to the Institute and formally recognizes its leadership in the fashion technology sector, and empowers NIFT to award degrees to its students. NIFT is the first institute in the world to award Degrees in fashion education.
Today, Indian industry is extremely fragmented. India will gain market shares in the European Union, the United States and Canada to a significant extent, but the expected surge in market share may be less than anticipated, as proximity to major markets assumes increasing economic significance and tariffs are increasingly restraining trade due to the fact that products cross borders several times. Furthermore, other developing countries are catching up with China in terms of unit labour costs in the textile and clothing sector and China has of yet not shown competitive strength in the design and fashion segments of the markets.
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