PRESENTATION ON

“A STUDY OF EXPORT COMPETITIVENESS ON INDIAN TEXTILE INDUSTRY”

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF

MASTER IN BUSINESS ADMINISTRATION

SUBMITED BY

ASHISH SAXENA

(MBA-IV)

UNDER THE GUIDANCE OFDr. SHIKHA SHARMA

(Professor ABS)AMITY UNIVERSITY RAJASTHAN

Introduction

It contributes 14% to the industrial production

4% to the country's gross domestic product (GDP)

17% to the country’s export earnings.

Long tradition of excellence in textile

It provides direct employment to over 35 million people

It is the second largest provider of employment after agriculture.

India earns about 27% of its total foreign exchange through textile

exports.

Scope & Objectives of the study

The objective of this study is to assess the competitiveness of Indian

textile industry.

India’s textile industry is one of the economy’s largest.

India possesses many strengths and opportunities in textile sector.

The industry is inherent with lot of experience, availability of cheap

labour, abundant raw material and supporting government

initiatives.

Find out the competitor of India in world Export.

Industry Profile

India is the largest producer of jute

The top exporter of cotton yarn with share of 25% in the world

trade

It is the second largest producer of cotton yarn and silk

It has the second largest spindalge in the world

The largest producer of cotton

It is the fifth largest of synthetic fiber/yarn

Major Players

Vardhman Textiles: Biggest world class textile group

manufacturing varied range of goods for the global textile

market.

Welspun India: Ties with 12 major retailers for its products.

Century mills- Asia’s largest composite 100 per cent cotton

textile mill.

Bombay Dyeing: one of the largest producers of textiles. It

produces various products.

Aditya Birla Group: Most diversified conglomerate Its key

business segments include viscose filament yarn (VFY),

carbon black, branded garments, textiles and insulators with its

manufacturing units.

Raymond Ltd: US$ 300 million plus conglomerate more than

60% of market share in India, Raymond Ltd. is today the

largest integrated producer of fabric in the world.

Alok Industries: Manufacturer of best apparel fabrics.

Major Production Center's

Amritsar

Phagwara

Ludhiana

Bhiwani

Delhi

Faridabad

Modinagar

Kanpur

Kolkata

Ahmadabad Surat Mumbai Bengaluru Chennai Coimbatore Madurai Raurkela Tirrupur

Research Methodology

REVEALED COMPARATIVE ADVANTAGE (RCA) is used

by BALASSA in 1965.

It is commonly used measure of export competiveness.

RCA is calculated as the ratio of a country‘s export share in

world trade for a specific commodity or a group of

commodities.

RCA for country “I” and commodity “j” (vis-à-vis the world)

is given as: RCAij = (Xij/Xwj)/(Xi/Xw)

Where,

Xij = ith country‘s export of commodity ‘j’

Xwj= world export of commodity ‘j’

Xi = total exports of country ‘I’

Xw = total world export

Revealed Comparative Advantage:

India to World / World to World (TEXTILE)

India to World / World to World (All Products)

TEXTILE include 11 sub items in the category which can be seen in the below table. HS CODE 59 category group named Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use.

India Export:

The above figure represents the year exports of TEXTILE of

India, also the total of exports from 2004-12. The figures are

taken from INTRACEN.ORG, the figure here represents the

total of TEXTILE exports from India to rest of the world.

This figure includes the total 11 sub items of TEXTILE sector

World Export:

The above figure shows the year on year exports of TEXTILE

over the world, with the total of exports from 2004-12. The

figure represents the total of exports around the world, a total

of all countries and also the sum of exports from year 2004-

12. It includes 11 sub items of TEXTILE sector.

The RCA has been calculated on each items of HS code 59 which can be seen in the above table.

From the above table, values which are = / > then 1, has the RCA

Export Growth

Exported RATIO in 2004

Exported RATIO in 2005

Exported RATIO in 2006

Exported RATIO in 2007

Exported RATIO in 2008

Exported RATIO in 2009

Exported RATIO in 2010

Exported RATIO in 2011

0

0.5

1

1.5

2

2.5

The growth ratio of TEXTILE exports of India year on year is shown in

the above graph, keeping the base year 2004. The graph explains that the trend of growth of exports of TEXTILE is moving upwards but with a slow pace yet it is increasing.

Findings &Analysis

China is the biggest threat for India.

Infrastructure: China is much ahead of India. The Chinese

Government has been investing a lot as compared to India for

the development

Labour reforms: The labour reforms in India are extremely

stringent which hampers the growth of textile manufacturers to

a great extent.

International trade trends: China has much more better

FORIGN TRADE POLICY then India that gives them an edge

in export market.

Taiwan, Mexico, Bangladesh, South Korea, Indonesia and

Pakistan are also emerging rivals.

SWOT ANALYSIS

STRENGTH

Low cost labour force.

Rich resources of Raw material.

Growing domestic and international market.

WEAKNESS

Fragmented Industry

Unskilled labour force.

Technological Obsolescence

Opportunity

Indian companies need to focus on Product Development.

The organized retailing in India will further fuel demand of

apparel in the country.

Large, potential domestic and international market.

Threat

High competition mostly from China.

Non-availability of technical resources.

Recommendations

Setting up Textile Industries oriented SEZs

Starting up new courses like Textile Manufacturing and Textile Technology at ITIs and Engineering Institutes

Liberalized labour laws, tax and other benefits of a Special Economic Zone need to be implemented

Access to high quality and cost-effective manpower

Excellent connectivity by road, rail air and ports

Single-window clearance

Conclusion

Indian textile industry, which is one of the oldest sectors and

hold great significance for its economy.

Indian textile industry its major marketplaces are Europe and

US.

India to be the market leader needs to surpass China, which is

its biggest competitor.

High investment in R&D to launch new products

For higher productivity it is imperative that the workforce

should be skilled and educated.

The Indian textile industry is presently worth $ 47 billion and

its continual expansion has led the government to lengthen the

Technology Up gradation Fund Scheme.

The future prospects of the Indian domestic market are also

very promising, with strong increase in GDP.

Above mentioned all the factors will help the country to

become a highly competitive player in global textile market.

THANK YOU