Textile business in India

Current Status

The textile industry holds valuable status in the India. Textile industry provides one of the most underlying necessities of the people. It is an independent industry, from the basic requirement of raw materials to the final products, with huge value-addition at every stage of processing.

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Today textile sector accounts for nearly 14% of the total commercial output. Indian fabric is in demand with its ethnic, earthly colored and many textures. The textile sector accounts about 30% in the total export. This conveys that it holds possible if one is ready to innovate.

The textile industry is the largest industry in terms of employment economy, predicted to originate 12 million new jobs by 2010. It generates gigantic possible for employment in the sectors from agricultural to industrial. Employment opportunities are created when cotton is cultivated. It does not need any exclusive Government sustain even at present to go further. Only thing needed is to give some directions to make population to get adequate share of the profit to spearhead development.

Segments

Textile industry is constituted of the following segments

o Readymade Garments

o Cotton Textiles along with Handlooms (Millmade / Powerloom/ Handloom)

o man-made Textiles

o Silk Textiles

o Woollen Textiles

o Handicrafts along with Carpets

o Coir

o Jute

The cottage industry with handlooms, with the cheapest of threads, produces median dress material, which costs only about 200 Inr featuring fine floral and other patterns. It is not valuable to add any make to it. The women of the house spin the thread, and weave a piece in about a week.

It is an established fact that small and irregular apparel yield can be profitable by providing affordable casual wear and leisure garments varieties.

Now, one may ask, where from the cheaper and the large profit comes in if the lowest end of the chain does not get paid with minimum per day labour charge. It is an irony of course. What population at the upper stratum of the chain do is, to apply this fabric into a make with some imagination and earn in millions. The right 6 yards straightforward saree, drape in with a blouse with embroideries and bead work, then it becomes a designer¡¦s ensemble. For an median person, it can be a slant cut while giving it a shape, which can double the profit. Maybe, the 30 % prestige that the industry is taking for its gift to Indian cheaper as good as 60 % this way. Though it is an industry, it has to innovate to prosper. It has all the ingredients to go ahead.

Current Scenario

Textile exports are targeted to reach billion by 2010, billion of which will go to the Us. Other markets contain Uae, Uk, Germany, France, Italy, Russia, Canada, Bangladesh and Japan. The name of these countries with their background can give thousands of insights to a mental mind. The slant cut that will be producing a readymade garment will sell at a price of 600 Indian rupees, production the value increasing to be profitable by 300 %.

Currently, because of the lifting up of the import restrictions of the multi-fibre arrangement (Mfa) since 1st January, 2005 under the World Trade organization (Wto) business transaction on Textiles and Clothing, the market has come to be competitive; on closer look however, it sounds an opening because best material will be possible with the customary inputs so far ready with the Indian market.

At present, the textile industry is undergoing a sizable re-orientation towards other then clothing segments of textile sector, which is ordinarily called as technical textiles. It is lively vertically with an median growing rate of nearly two times of textiles for clothing applications and now inventory for more than half of the total textile output. The processes in production technical textiles need high-priced machinery and skilled workers.

The application that comes under technical textiles are filtration, bed sheets and polisher materials, healthcare upholstery and furniture, blood-absorbing materials and thermal protection, adhesive tape, seatbelts, and other specialized application and products.

Strengths

. India enjoys benefit of having plentiful resources of raw materials. It is one of the largest producers of cotton yarn colse to the globe, and also there are good resources of fibres like polyester, silk, viscose etc...

. There is wide range of cotton fibre available, and has a rapidly developing artificial fibre industry.

. India has great competitiveness in spinning sector and has presence in approximately all processes of the value chain.

. Availability of very trained manpower in both, administration and technical. The country has a huge benefit due to lower wage rates. Because of low labor rates the manufacturing cost in textile automatically comes down to very inexpensive rates.

. The installed capacity of spindles in India contributes for 24% share of the world, and it is one of the biggest exporters of yarns in the global market. Having modern functions and suitable fiscal policies, it accounts about 25% of the world trade in cotton yarn.

. The apparel industry is largest foreign replacement earning sector, contributing 12% of the country's total exports.

. The garment industry is very diverse in size, manufacturing facility, type of apparel produced, quantity and capability of output, cost, requirement for fabric etc. It comprises suppliers of ready-made garments for both, domestic or export markets.

Weakness

Massive Fragmentation:

A major loop-hole in Indian textile industry is its huge fragmentation in industry structure, which is led by small scale companies. Despite the government policies, which made this deformation, have been slowly removed now, but their impact will be seen for some time more. Since most of the clubs are small in size, the examples of industry leadership are very few, which can be inspirational model for the rest of the industry.

The industry veterans portrays the present productivity of factories at half to as low as one-third of levels, which might be attained. In many cases, smaller clubs do not have the fiscal resources to enhance technology or spend in the high-end engineering of processes. The skilled labor is cheap in absolute terms; however, most of this benefit is lost by small companies.

The uneven provide base also leads barriers in attaining integration between the links in provide chain. This issue creates uncontrollable, unreliable and inconsistent performance.

Political and Government Diversity:
The reservation of yield for very small clubs that was imposed with an intention to help out small scale clubs over the country, led sizable fragmentation that distorted the competitiveness of industry. However, most of the sectors now have been de-reserved, and major entrepreneurs and corporate are putting-in huge number of money in establishing big facilities or in expansion of their existing plants.

Secondly, the foreign investment was kept out of textile and apparel production. Now, the Government has slowly eliminated these restrictions, by bringing down import duties on capital equipment, gift foreign investors to set up manufacturing facilities in India. In up-to-date years, India has provided a global manufacturing platform to other multi-national clubs that industry other than textile products; it can indeed provide a base for textiles and apparel companies.

Despite some motivating step taken by the government, other problems still sustains like assorted taxes and excise imbalances due to diversification into 35 states and Union Territories. However, an outline of Vat is being implemented in place of all other tax diversifications, which will clear these imbalances once it is imposed fully.

Labour Laws:
In India, labour laws are still found to be relatively unfavorable to the trades, with clubs having not more than ideal model to ensue a 'hire and fire' policy. Even the clubs have often broken their enterprise down into small units to avoid any issue created by labour unionization.

In past few years, there has been movement slowly towards reforming labour laws, and it is predicted that this movement will uphold the environment more favorable.
Distant Geographic Location:
There are some high-level disadvantages for India due to its geographic location. For the foreign companies, it has a global logistics disadvantage due the shipping cost is higher and also takes much more time comparing to some other manufacturing countries like Mexico, Turkey, China etc. The inbound freight traffic has been also low, which affects cost of shipping - though, movement of packaging are not at inexpensive costs.

Lack of trade memberships:
India is serious lacking in trade pact memberships, which leads to restricted entrance to the other major markets. This issue made others to inflict quota and duty, which put scissors on the sourcing quantities from India.

Opportunities

It is predicted that India's textile industry is likely to do much better. Since the consumption of domestic fibre is low, the increase in domestic consumption in tandem is predicted with Gdp of 6 to 8 % and this would sustain the increase of the local textile market at about 6 to 7 % a year.

India can also grab opportunities in the export market. The industry has the possible of attaining bn export income by the year 2010. The regulatory polices is helping out to enhance infrastructures of apparel parks, Specialized textile parks, Epzs and Eous.

The Government sustain has ensured fast consumption of clothing as well as of fibre. A particular rate will now be prevalent throughout the country.

The Indian manufacturers and suppliers are improving make skills, which contain different fabrics agreeing to different markets. Indian fashion industry and fashion designers are marking their name at international platform. Indian silk industry that is known for its fine and exclusive brocades, is also adding gigantic compel to the textile industry.

The industry is being modernized via an exclusive scheme, which has set aside bn for investment in improvisation of machinery. International brands, such as Levis, Wal-Mart, Jc Penny, Gap, Marks & Spencer and other industry giants are sourcing more and more fabrics and garments from India. Alone Wal-Mart had purchased products worth 0mn last year and plans to increase buying up to bn in the coming year. The clothing giant from Europe, Gap is also sourcing from India.

Anticipation
As a ensue of assorted initiatives taken by the government, there has been new investment of Rs.50,000 crore in the textile industry in the last five years. Nine textile majors invested Rs.2,600 crore and plan to spend other Rs.6,400 crore. Further, India's cotton yield increased by 57% over the last five years; and 3 million additional spindles and 30,000 shuttle-less looms were installed.

Forecast till 2010 for textiles by the government along with the industry and Export Promotion Councils is to attain double the Gdp, and the export is likely attain bn. The industry is predicted to originate 12mn new jobs in assorted sectors.

How to uphold textile Industry

Weak infrastructure may be a hindrance which can be overcome with best network and with the willingness to share profit by loyalty lowest up and patronization from above downwards.

. By putting more retail outlets,

. With best value added products,

. By taking the lowest end of the chain into reliance and building their capability to innovate more and more.

. By upholding the market knowledge at every level that happens at higher-end that lifts the chain.

. By building on the expertise for technical textiles that contain bed sheets; filtration and polisher materials; furniture and healthcare upholstery; thermal safety and blood-absorbing materials; seatbelts; adhesive tape, etc which need skilled workers who are not easy to find in an Indian market.

. By holding a regular research and amelioration group with regards to the industry

. By building up the peripheral market with regular modernize of new accessories.

. By integrating the disorganized sectors into one segment that is functionally independent of each other's unwanted stranglehold

. By putting affiliated efforts into the sector

. By creating a state owned cargo-shipping mechanism : with rationalizing fiscal duties; upgrading technology straight through the Technology Up-gradation Fund task (Tufs);

. By setting up of Apparel Parks

. By clearing off bottlenecks in the form of regulatory practices

. By replacing the indirect taxes with a particular nationwide Vat

. With liberalization of contract norms for textile and garments units

. By controlling export of raw materials

. By curtailing the drawback claims falsely boosted invoice value of exports

. By effectively installing a price discovery mechanism to track market trend to take sufficient measures before hand a slump

How to promote textile exports

For promotion of exports the measures which should be taken up are

. Up gradation of textiles sector

. Course level decision to accomplish export target

. Woven segment of readymade garment sector and knitwear have been de-reserved

. Technology Up-gradation Fund task to be pursued till next five years

. Liberalization of Fdi Course with up to 100 per cent foreign equity participation

. Import of capital goods at 5% concession rate of duty with thorough export obligation under

Export Promotion Capital Goods (Epcg) task and clearly laid out Exim policy

. Progress Licensing task with thorough input-output norms

. Prescribed Duty Exemption Pass Book (Depb) task prestige rates

. Duty Drawback task wherein the exporters are allowed reimbursement of the excise and import duty loss on raw materials

. building of Apparel International Mart by Apparel Export Promotion Council to provide a world class factory to the apparel exporters to exhibit products and built international reputation

. Setting up of capability checking laboratories

. Apparel Park for Exports task to invite international yield units along with in-house yield floors.

Textile business in India