Indian Textile Industry
By, Uplana(94) Mukesh Chaudhary(46) Vardhy Tandel(89) Vijay Makvana Apurv katariya(57)
Virji
Introduction
industry is worth over US$ 4395 billion . Global trade in this industry is now at US$ 350 billion. Among the countries, Japan, Australia and New Zealand are the significant consumers of Indian textiles. India ranks second with 8 percent of the total. High production of wool, cotton and silk over the world has boosted the industry in recent years.
History
The term 'Textile' is a Latin word originating from the word 'texere' which means 'to weave'
The history of textile is almost as old as that of human civilization. In India the culture of silk was introduced in 400AD . modern textile industry took birth in India in the early nineteenth century The first cotton textile mill of Bombay was established in 1854 during the year 1900 the cotton textile industry was in bad state After independence, the cotton textile industry made rapid strides under the Plans
Five years outlook 400.0
8.5 8.0 7.5
24.3
6.5
USD Billion
5.5
7.8
4.5
200.0 3.5
3.5
2.5
100.0
222.0
304.2
2005 P
2010 P
Total retail industtry
Organised
1.5
Penetration
Percent
300.0
SWOT Analysis
Strengths: Indian Textile Industry is an Independent & SelfReliant industry. Abundant Raw Material availability that helps industry to control costs and reduces the lead-time across the operation. Availability of Low Cost and Skilled Manpower provides competitive advantage to industry. Availability of large varieties of cotton fiber and has a fast growing synthetic fiber industry. India has great advantage in Spinning Sector and has a presence in all process of operation and value chain.
SWOT Analysis
Weaknesses: Indian Textile Industry is highly Fragmented Industry. Industry is highly dependent on Cotton. Lower Productivity in various segments. There is Declining in Mill Segment. Lack of Technological Development that affect the productivity and other activities in whole value chain. Infrastructural Bottlenecks and Efficiency such as, Transaction Time at Ports and transportation Time. Unfavorable labor Laws. Lack of Trade Membership, which restrict to tap other potential market. Lacking to generate Economies of Scale. Higher Indirect Taxes, Power and Interest Rates.
SWOT Analysis
Opportunities: Growth rate of Domestic Textile Industry is 6-8% per annum. Large, Potential Domestic and International Market. Product development and Diversification to cater global needs. Elimination of Quota Restriction leads to greater Market Development. Market is gradually shifting towards Branded Readymade Garment. Increased Disposable Income and Purchasing Power of Indian Customer opens New Market Development. Emerging Retail Industry and Malls provide huge opportunities for the Apparel, Handicraft and other segments of the industry. Greater Investment and FDI opportunities are available.
SWOT Analysis
Threats: Competition from other developing countries, especially China. Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world. Elimination of Quota system will lead to fluctuations in Export Demand. Threat for Traditional Market for Powerloom and Handloom Products and forcing them for product diversification. Geographical Disadvantages. International labor and Environmental Laws. To balance the demand and supply. To make balance between price and quality.
The shape of the textile industry in India
Large Industry – 3% of GDP, 27% of Forex earnings, 21% of total employment Very large unorganised sector – about 76% of total fabrics production Market is very diverse, does not lend itself to comparative studies in terms of market share etc.
The global scenario
The end of the MFA arrangement Competitiveness of Indian industry • • •
Low level of modernization Fragmented nature – low capacities Infrastructure, Labour laws
Exports have risen by 10% but at the same time China’s exports have risen by more than 20%, even countries like Pakistan and Bangladesh have done better
Cont…
The light at the end of the tunnel
China muzzled Viable option for those looking to spread out risk Indian govt waking up Domestic market projected to grow as well
Major players
Arvind Mills
Arvind Mills is one of the fully vertically integrated players in India. It has large capacities in denim, shirting and knitted garments. Adding value by manufacturing denim apparel.
Its sales are around US$ 300 millions with little less than 9% profitability
Raymonds
Raymonds has the large integrated business model, across the value chain from yarn to retail.
It already supplies to some US retailers. it second largest denim player in India. Its annual sales are around US$ 300 millions with little less than 7
Vardhaman Spinning
Vardhman has capacities in spinning, weaving and processing. It is planning to double its fabric processing capacity to 50 million meters. It is an approved supplier to global retailers like GaP, Target and Tommy Hilfiger. Its sales are little over US$ 120 millions with 6.5% profitability.
Welspun India
Welspun is among the top five manufacturers of terry towels in the world It sells its products in 24 countries
It is supplier to retailers such as WalMart, J C Penny, and Shopko.
Its revenues are little over US$ 100 millions with little less than
Conclusion
A huge window of opportunity has opened up for the Indian textile industry .
Various players need to get act together.
Government is playing the role of facilitator by taking various majors. It’s now for players to make investments in building the capacities and making them integrated manufacturers. The industry enjoys significant strength and advantages, such as availability of raw materials, labour, domestic market and supportive government policies.
Thank you
