Textile industry in Indian scenario

Abstract

The textile industry occupies a unique place in our country.One of the earliest to come into existence in India, it accounts for 14% of thetotal Industrial production, contributes to nearly 30% of the total exports andis the second largest employment generator after agriculture. Textile Industryis providing one of the most basic needs of people and the holds importance;maintaining sustained growth for improving quality of life. It has a uniqueposition as a self-reliant industry, from the production of raw materials tothe delivery of finished products, with substantial value-addition at eachstage of processing; it is a major contribution to the country's economy. Itsvast potential for creation of employment opportunities in the agricultural,industrial, organized and decentralized sectors & rural and urban areas,particularly for women and the disadvantaged is noteworthy. Although thedevelopment of textile sector was earlier taking place in terms of generalpolicies, in recognition of the importance of this sector.

Introduction

The textile industry is undergoing a major reorientationtowards non-clothing applications of textiles, known as technical textiles,which are growing roughly at twice rate of textiles for clothing applicationsand now account for more than half of total textile production. The processes involved in producing technical textiles require expensive equipments and skilledworkers and are, for the moment, concentrated in developed countries. Technicaltextiles have many applications including bed sheets; filtration and abrasivematerials; furniture and healthcare upholstery; thermal protection andblood-absorbing materials; seatbelts; adhesive tape, and multiple otherspecialized products and applications. The Indian Textile industry has beenundergoing a rapid transformation and is in the process of integrating with theworld textile trade and industry. This change is being driven by the progressive dismantling of the MFA and the imperative of the recently signed General AgreementTrade & Tariff. In this bold, new scenario, India has to move beyond itsrole of being a mere quota satisfying country.

History of Textile

The history of textile is almost as old as that of humancivilization and as time moves on the history of textile has further enricheditself. In the 6th and 7th century BC, the oldest recorded indication of usingfiber comes with the invention of flax and wool fabric at the excavation ofSwiss lake inhabitants. In India the culture of silk was introduced in 400AD,while spinning of cotton traces back to 3000BC. In China, the discovery andconsequent development of sericulture and spin silk methods got initiated at2640 BC while in Egypt the art of spinning linen and weaving developed in 3400BC. The discovery of machines and theirwidespread application in processing natural fibers was a direct outcome of theindustrial revolution of the 18th and 19th centuries. The discoveries of varioussynthetic fibers like nylon created a wider market for textile products and gradually led to the invention of new and improved sources of natural fiber. Thedevelopment of transportation and communication facilities facilitated the pathof transaction of localized skills and textile art amongvarious countries.

Textile History in India

Indian textile enjoysa rich heritage and the origin of textiles in India traces back to the Indus valley Civilization where people used homespun cotton for weaving their clothes.Rigveda, the earliest of the Veda contains the literary information abouttextiles and it refers to weaving. Ramayana and Mahabharata, the eminent Indianepics depict the existence of wide variety of fabrics in ancient India. These epics refer both to rich and stylized garment worn by the aristocrats andordinary simple clothes worn by the common people. The contemporary Indiantextile not only reflects the splendid past but also cater to the requirementsof the modern times.

Influences of changes shaping the industry

We will touch upon some of the more significant changes thathave and are shaping the Indian textile industry.

Changes in Emphasis

There hasbeen a distinct and positive shift from quality to quality. Earlier Indiantextiles were considered cheap and of low quality. The industry was at thattime driven by large volumes, which were of paramount importance. The bestquality was produced in Europe and Japan. Since then, India has come a long way, emerging as a manufacturer of high quality yarns and fabrics.The leading mills such as Raymonds, Read & Taylor, Aravind mills etc. Improved their quality standards prevailing into the world.

Implementation of New Equipment

The textile industry has also become a high technology. The textile industry has also become a high technology industry. No body earlier could have concerned that the industry would require top of the line technical skills. Present day textile machinery is fully computerized and needs totally new skills to effectively manage it.

New Marketing Trend

On the marketing side, there has been a total change , with almost all players in the industry extending their reach to international markets. The impact of these trends on the textile industry is profound. Increasingly any company cannot sustain itself only on local market demand or only the exports. One has to look at the global markets in totality.

Competition

This compulsion to access and compete in international markets has been perhaps one of the saving grace for the industry. Clearly the ability and necessity of meeting global competition head on, has forced the industry to upgrade its technology, product quality, cost structure and marketing skills. Truly, we have learnt more from the competitions than from ourselves.

Decentralized sectors

Another visible change relates to the scale of operations. Earlier textile mills were generally reasonably large size becomes a non-constraining factor with the advent of power loom sector, which enabled small weavers to make and market their own fabrics in direct competition with large mills.

Technocrats

Another shift in the industry is regarding entrepreneurship. Technocrats have been able to become possible to have small size spinning, weaving and processing mills. All this was earlier the domain, solely of large businesses.

Cost Consciousness

The greater competitive pressure have highlighted the need to control cost of every type of whether it be energy, water or labor all of which were earlier taken for granted now every mill is highly cost conscious and industrial engineers keep detailed trace of every cost parameter including energy consumption including energy consumption, waste control, machine efficiency and productivity. No doubt, this will have to be an ongoing exercise. Since cost have to be ruthlessly and persistently brought down.

Labor intensive industry

The textile industry being labor intensive, is slowly migrating from high cost countries, such as the United states, Europe, Japan, Australia, Taiwan and Korea. All these countries were at one time leading textile manufacturers. But with the high labor cost, capacities in these countries are being diverted elsewhere. This is happening even as the developed economies make large investments in better machinery and automatism.

Labor cost comparison (Europe & India)

Indian Textile Industry has some inherent strength

• Tradition in Textiles and long operating experience
• Large and growing domestic market
• Strong raw material base
• Production across entire textile value chain
• Stable, low-risk economy, safe for business growth
• Easy availability of abundant raw materials like cotton, wool, silk, jute
• Widely prevalent social customs
• Variety of distinct local culture
• Constructive geographic and climatic conditions

Table showing the Indias Competitiveness with Other Country

There is no denying India is competitive enough and will become even more competitive once its infrastructure issues are sorted out. China has probably already reached its peak and further improvements may not be as dramatic, henceforth

Source - Industry, I-SEC Research

Indias world market share in Textile Industry

The world market share

In spite of the Chinese dominance, India has a fair opportunity to grab a substantial stake in the projected garment market share. According to PHD Chamber of Commerce and Industry (PHDCCI), post-MFA, India's market share in the US is expected to go up to 15 per cent from the present 4 per cent. In the EU, the market share increase is expected to be 50 per cent from the current 6 per cent to 9 per cent.

The world population is increasing at the rate of 1.8% per annum between 1980 to 2000 while it was 1.4% between 1960 to 1980. Per capita fibres consumption showed an increase of 0.9% between 1980 to 2000 while it was 1.8% between 1960 to 1980. World fibre needs will increase by 2.4% till 2001. The figure for 1960 to 1980 was 3.6%.

The above figure an attempt is made to analyse the trends in the world fibre type usage between 1960 to 2000. Natural fibre usage has dropped from 77% in 1960 to 44% in 2000 (projected) while man made non cellulose fibres show an increase from 5% in 1960 to 47% in 2000 (projected). This is a phenomenal increase and is due to mainly advent of polyester its multiple uses and its popularity. As further analysis the man made fibre production shows that in the man made fibre are polyester has increased its share from 42% in 1986 to 55% in 2000 (projected). Nylon, Rayon and Acrylic show a decreasing trend in the percentage. But is absolute terms they registered an increase.

Indian Textiles targets to achieve by end of the 11^th Five year Plan (2007-2012)

• Market size of US$ 115 Billion
• Export target US$ 55 Billion
• Domestic market US$ 60 Billion
• Indias market share in world textiles trade to grow from 3% to 8 %
• 12 Million additional jobs
• Investment Rs.150,600 Crore

Textiles Export Target (In Billions)

Source: Textile India Progress

Textile scenario

Developing countries with both textile and clothing capacity may be able to prosper in the new competitive environment after the textile quota regime of quantitative import restrictions under the Multi-Fibre Arrangement (MFA) came to an end on 1st January, 2005 under the World Trade Organization (WTO) Agreement on Textiles and Clothing.

As a result, the textile industry in developed countries will face intensified competition in both their export and domestic markets. However, the migration of textile capacity will be influenced by objective competitive factors and will be hampered by the presence of distorting domestic measures and weak domestic infrastructure in several developing and least developed countries. India must take adequate measures for capturing its market by promote the development in this sector

Challenges in the Textile sector

Conclusion

"India is presently exporting six billion U.S. Dollars worth of garments, whereas with the WTO regime in place, we can increase the production and export of garments to 18 to 20 billion U.S. Dollars within the next five years. This will enable generation of employment in general and in rural areas in particular. By tripling the export of apparels, we can add more than 5 million direct jobs and 7 million indirect jobs in the allied sector, primarily in the cultivation of cotton. Concerted efforts are needed in cotton research, technology generation, transfer of technology, modernization and upgrading of ginning and pressing factories and an aggressive marketing strategy."

About the Author:

The author is the faculty in SSM College of Engineering, Tamil Nadu.

References:

1. The Textile Asian Journal

2. Textile Association Journal

3. Textile India Progress Journal

4. Textile Management

5. www.fibre2fashion.com

6. www.expresstextile.com

7. www.domain-b.com

8. www.iloveindia.com

9. www.economywatch.com

10. http://www.india-crafts.com/textile/india-textile.html

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