Textile industry is one of the oldest industries of the Indian subcontinent, which was at its zenith during the pre-colonial period and later for many decades until Manchester emerged as the textile capital of the world. In spite of rigorous colonial exploitation of the country in general and the textile industry in particular, it re-emerged after independence in much more diversified forms because of our ability to withstand any tide of devastation. There are various reasons behind this, in which entrepreneurship of our forefathers and the zeal of nationhood were important factors. Huge resource base and large unskilled and skilled manpower played a pivotal role in the growth of this industry in India.

Post "Multi Fiber Agreement" (from 1st Jan 2005) saw a sea change in the development of the textile sector in developing countries like India. In fact, the textile industry has played a very prominent role in the Industrial revolution and continued as a key employment-generating sector even at the advanced stage of industrial growth in almost all countries of the world. The Multi Fiber Agreement in the 60s is one of the best examples, which remained a great barrier in the area of open competition across the world for almost four decades, enforced unilaterally by the developed world and finally replaced by the "Agreement on Textile and Clothing" under WTO after a continuous struggle of the developing world since 1st Jan 2005. A better growth rate has been achieved by the country after the abolition of the quota system under MFA, though there are many factors that need our attention in order to utilize our workforce properly on one hand and improve profitability on the other.

In order to understand various issues, we can divide the textile and clothing industry into three interrelated segments: organizational set up, technological advancement, and market mechanism. A close observation of these components in the industry shows structural-functional anomalies in organizational set up. It needs comprehensive solutions in order to improve the capacity building of our workforce vis-�-vis on the part of management. Management techniques and flexibility of organization are as important as technological advancement in the industry. Even though India secures the 2nd largest position in textile exports in the world and lags behind only to its neighbor, small and medium-scale industries are unable to use human capital intensively in design and marketing, which is one of the most important drawbacks of our capacity building in this sector.

Recently, Mr. Shakthivel, president of the Federation of Indian Export Organization, in an interview with the Frontline, accepts that we are changing our work environment imitatively under the force of different western buyers, not due to our own initiatives. While it has proved that better work environment and work culture improve productivity and quality of the product in the early 40s. In fact, market approach in employee-employer relation has a solution to many problems but reduces the trust which is a drawback of our organizational endeavor. It is absent in the Japanese organizational model in which organizations are considered as extended families, that is the reason they innovate in-house technological feasts due to what we know as Z-theory. Absence of managerial motivating factors and a sense of insecurity cause a kind of despair among skilled and semi-skilled workforce leading to dangerous decisions sometimes even suicide. It is considered one of the important reasons for a higher number of suicides in Tirupur, an Important center of textile and clothing in south India.

The textile and clothing industry has high-value added segments where design, research and development (R&D) are important competitive factors along with routine work of production line. The high end of the fashion industry uses human capital intensively in design and marketing. The same applies to market segments such as sportswear where both design and material technology are important. Finally, R&D is important in industrial textiles where, again, material technology is an important competitive factor. Indian textile industry pay least attention over these issues that is the reason we have no international recognized brands in spite of very high production capacity. Not even four percent of textile units have any investment policy on these issues that is why industrial production subordinates to international brands and major part of profitability belongs to these brands.


Importance of textile sector in the total economy can be understood from the fact that it is the largest employment generating sector, an estimated strength of direct employment in this sector is 35 million and it is the largest provider of employment after agriculture. The Indian textile industry contributes about 14 per cent to industrial production, 4 per cent to the country's gross domestic product (GDP) and 17 per cent to the country's export earnings. It shows our poor profit margin from this sector in the national earning. Many of the small and medium scale industries are still managed under the traditional system of management which is not conducive for better investment pattern, innovative design and also for marketing. This style of management largely believes in the autocratic system where decisions are mainly taken by top management without even consultation of other stakeholders. Owners and top management of these industries are always conservative for any share in their profit even if it is on account of the high growth of industry. Many modern financial managerial and innovative planning techniques are impractical under this system of management. In many cases, smaller companies do not have the fiscal resources to enhance technology or invest in the high-end engineering processes because of very poor investment policy.


Modern technological advancement in almost all the departments has changed the very nature and productivity of textile and clothing industry. Of course it reduces employment opportunities in general and in fact a death blow on unskilled opportunities. Other major benefits of these developments are accuracy, better working conditions, and reduction of human error. Modern continuous range of dyeing requires only 2-3 operators from dyeing to finishing. This was almost impossible even to imagine 2-3 decade earlier. But this technological advancement also reached India in patches and mostly found in few large and composite units. Many large units have highly automatic manufacturing line along with highly skilled man power on one hand while there are many small scale units having almost no automation and negligible skilled manpower in modern sense. It can be understood from the fact that India equipped with 1.80 million shuttle looms (45% of world), 0.02 million shuttle less looms (3% of world) while 3.90 million handlooms (85% of world) are still functioning. In many medium and small scale industry there is amalgamation of few modern machines with a large number of manual machines. Big groups relies more on the technology than the existing set up and almost all investors pay least attention on the existing manpower and its welfare in comparison to the imitative technology and its relation to the work force. Almost all automatic machinery imported not only to improve production capacity but also to attract foreign buyers. This later approach of our manufacturers kill the desire of innovative and use of Intellectual Property Rights of industrial and consumer products. In fact automation is a better sign of our industry but automation in least required areas put a question mark on the corporate social responsibility also.

Marketing is the most important part of any industrial production. This is the weakest link of Indian textile manufacturing. Brand creation is both art and science in the market mechanism. It depends on many pillars in which important are psychological studies of consumers, reliability of product (quality), presentation (advertising and packing), and services after sale. But there are few other important factors are extra added properties in textile products and styles with models. Use of psychological, social and cultural themes in designing and style are important for designer's of this field, in order to improve the value addition in final products of clothing industry. Brand culture has been adopted in recent years only after entry of various multinational brands in the country. Even though there are many global brands in the market, there is still some space for new brands. Creation of brand in the market does not only requires investment but also capacity of innovative approach in almost all departments viz. sales, marketing, production, product design, management, and understanding of international laws and treaties (particularly in export). Indian fashion designer's have good recognition across the world but there are very few efforts have been taken in order to take benefits from international market by apparel industry trough reconciliation of designer's efforts in the apparel industry in order to improve brand recognition thus for better profit ratio. A micro analysis of market shows that different consumer products which have been launched in the market by some Yoga Gurus have greater recognition i.e. we can learn how to create a brand in the market from these branded Guru's.


Other environmental factors such as international treaties (on trade and commerce, intellectual property rights, ban on health hazardous agents, regional trade zones, national policies and ecological issues require continuous efforts in the industrial development. These issues require coordinative approach from all stakeholders both public and private. Any trust deficit between government and business and among different businesses erodes the real capacity of competition. Though India is one of the major producers of cotton yarn and fabric, the productivity of cotton as measured by yield has been found to be lower than many countries. The level of productivity in China, Turkey and Brazil is over 1 tonne / ha., while in India it is only about 0.3 tonne / ha. In the manmade fiber sector, India is ranked at fifth position in terms of capacity. However, the capacity and technology infusion in this sector need to be further enhanced in view of the changing fiber consumption in the world. In fact direct intervention of corporate houses required research & development in order to improve productivity and quality of cotton, which might directly benefit the overall productivity of Indian textile and clothing sector. Our economic policy against large industries, very poor policy implementation for small & medium scale industries and red-tapism in bureaucratic machinery leads to a very suspicious environment after independence has lead to an environment, which is not much conducive for business and entrepreneurship. In fact many reform measures which have been taken after new economic policy-1991 are very late reform measure from the perspective of textile industry for example- Technology Up gradation Fund Scheme (1999), Integrated textile parks scheme, Fiscal rationalization scheme on manmade fiber (2006), Technology Mission on Cotton (2000). That is why India received very little Foreign Direct Investment (FDI) in last decade, during 2008 it was recorded at ` 8.696 billion while in 2009 it was ` 9.687 billion. This 2009 figure of FDI can be represented as 11% hike in FDI in compared to last year but it would only be a kind of self-appraisal.


The author is the Associate member of Institution of Engineers


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