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8/4/2019 Future of Indian Textile Industry (2)
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Indian Textile Industry
The textile industry is the largest industry of modern
India. It accounts for over 20 percent of industrial
production and is closely linked with the agricultural and rural economy. It is the single largest employer in
the industrial sector employing about38 millionpeople. If employment in allied sectors like ginning, agriculture, pressing, cotton trade, jute, etc. are added
then the total employment is estimated at 93 million. The net foreign exchange earnings in this sector are
one of the highest and, together with carpet and handicrafts, account for over 37 percent of total export earnings at over US $ 10 billion. Textiles,1 alone, account for about 25 percent of India‟s total forex
earnings.
India‟s textile industry since its beginning continues to
be predominantly cotton based with about 65 percent of fabric consumption in the country being accounted
for by cotton. The industry is highly localised in
Ahmedabad and Bombay in the western part of the
country though other centres exist including Kanpur, Calcutta, Indore, Coimbatore, and Sholapur.
The structure of the textile industry is extremely
complex with the modern, sophisticated and highly mechanised mill sector on the one hand and the
handspinning and handweaving (handloom) sector on
the other. Between the two falls the small-scale
1 Yarn, cloth, fabrics, and other products not made
into garments.
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powerloom sector. The latter two are together known
as the decentralised sector. Over the years, the
government has granted a whole range of
concessions to the non-mill sector as a result of which the share of the decentralised sector has increased
considerably in the total production. Of the two sub- sectors of the decentralised sector, the powerloom
sector has shown the faster rate of growth. In the
production of fabrics the decentralised sector accounts for roughly 94 percent while the mill sector has a share of only 6 percent.
Being an agro-based industry the production of raw material varies from year to year depending
on weather and rainfall conditions. Accordingly
the price fluctuates too.India's trade in textiles and its share in world trade can be
categorized as follows:
India‟s Trade in Textiles
(1998)
Type India's Share inWorld Trade
Yarn 22%Fabrics 3.2%
Apparel 2%
Made-ups 9%
Over-all 2.8%
Global Scenario
Compound Annual Growth Rate
(CAGR) of different segments
Type CAGR (1993-98)
Yarn 31.79%Fabric 9.04%Made-ups 15.18%
Garment 6.795%
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The textile and clothing trade is governed by the
Multi-Fibre Agreement (MFA) which came into force
on January 1, 1974 replacing short-term and long-
term arrangements of the 1960‟s which protected US textile producers from booming Japanese textiles
exports. Later, it was extended to other developing
countries like India, Korea, Hong Kong, etc. which
had acquired a comparative advantage in textiles. Currently, India has bilateral arrangements under MFA with USA, Canada, Australia, countries of the
European Commission, etc. Under MFA, foreign
trade is subject to relatively high tariffs and export quotas restricting India‟s penetration into these
markets. India was interested in the early phasing
out of these quotas in the Uruguay Round of Negotiations but this did not happen due to the
reluctance of the developed countries like the US and
EC to open up their textile markets to Third World
imports because of high labour costs. With the removal of quotas, exports of textiles have now to
cope with new challenges in the form of growing non-tariff / non-trade barriers such as growingregionalisation of trade between blocks of nations, child labour, anti-dumping duties, etc.
Nevertheless, it must be realised that the picture is
not all rosy. It is now being admitted universally and
even officially that the year2005 AD is likely topresent more of a challenge than opportunity. If the
industry does not pay attention to the very vital needs
of modernisation, quality control, technology
upgradation, etc. it is likely to be left behind. Already,
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its comparative advantage of cheap labour is being
nullified by the use of outmoded machinery.
With the dismantling of the MFA, it becomes imperative for the textile industry to take on
competitors like China, Pakistan, etc., which enjoy
lower labour costs. In fact the seriousness of the
situation becomes even more apparent when it is
realised that the non-quota exports have not really
risen dramatically over the past few years. The
continued dominance of yarn in exports of cotton,
synthetics, and blends, is another cause for worry
while exports of fabrics is not growing. The lack of value added products in textile exports do not augur well for India in a non-MFA world.
Textile exports alone earn almost 25 percent offoreign exchange for India yet its share in global trade
is dismal, having declined from 10.9 percent in 1955 to 3.23 percent in 1996. More significantly, the share
of China in world trade in textiles, in 1994, was 13.24
percent, up from 4.36 percent in 1980. Hong Kong, too, improved its share from 7.06 percent to 12.65
percent over the same period. Growth rate, in US$
terms, of exports of textiles, including apparel, was
over 17 percent between 1993-94 to 1995-96. It declined to 10.5 percent in 1996-97 and to 5 percent in1997-98. Another disconcerting aspect that reflects the declining international competitiveness of Indian textile industry is the surge in imports in the
last two years. Imports grew by 12 percent in dollar terms in 1997-98, against an average of 5.8 percent
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for all imports into India. Imports from China went up
by 50 percent while those from Hong Kong jumped by23 percent.
Global factors influencing textile industry
The history of the textile and clothing industry has
been replete with the use of various bilateral quotas, protectionist policies, discriminatory tariffs, etc. by the
developed world against the developing countries. The result was a highly distorted structure, which
imposed hidden costs on the export sectors of the Third World. Despite the fact that GATT was
established way back in 1947, the textile industry, till 1994, remained largely out of its liberalisation
agreements. In fact, trade in this sector, until the
Uruguay Round, evolved in the opposite direction. Consequently, since 1974 global trade in the textiles
and clothing sector had been governed by the Multi- fibre agreement, which was the sequel to an
increasingly pervasive quota regime that began with
the Short-term arrangement on cotton products in
1962 and followed by the Long-Term arrangement. After the successful conclusion of the Uruguay Round
in 1994, the MFA was replaced by the Agreement on
Textiles and Clothing(ATC), which had the sameMFA framework in the context of an agreed, ten year phasing out of all quotas by the year 2005. The
section that follows takes a brief look at the history of these protectionist regimes as also a more detailed
look at the MFA and the ATC.Multi-FibreAgreement (MFA)On January 1st, 1974, the
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Arrangement Regarding the International Trade in
Textiles, otherwise known as the MFA came into
force. It superseded all existing arrangements that
had been governing trade in cotton textiles since 1961. The MFA sought to achieve the expansion of trade, the reduction of barriers to trade and the
progressive liberalisation of world trade in textile
products, while at the same time ensuring the orderly
and equitable development of this trade and
avoidance of disruptive effects in individual markets
and on individual lines of production in both importing
and exporting countries. Though it was supposed to
be a short-term arrangement to enable the adjustment of the industry to a free trade regime, the MFA wasextended in 1974, 1982, 1986, 1991, and 1992.Because of the quotas allotted, the MFA resulted in a
regular shift of production from quota restricted
countries to less restricted ones as soon as the
quotas began to cause problems for the traders in importing countries. The first three extensions of the
MFA, instead of liberalising the trade in textiles and
clothing, further intensified restrictions on imports, specifically affecting the developing country exporters
of the textile and clothing products. Increased usage
of several MFA measures tended to further erode the
trust which developing countries had originally placed in the MFA.
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The MFA set the terms and conditions for governing
quantitative restrictions on textile and clothing
exports of developing countries either through
negotiations or bilateral agreements or on a unilateral basis.The bilateral agreementsnegotiated between importing and exporting
country‟s contained provisions relating to the
products traded but they differed in the details. The restraints under the MFA were often
negotiated, or unilaterally imposed at relatively
short intervals, practically annually. The quotas
could be either by function or fibre
Under the MFA, product coverage was extended to
include textiles and clothing made of wool and
man-made fibres (MMF), as well as cotton and
blends thereof. With regard to applications of safeguard measures, import restrictions could be
imposed unilaterally in a situation of actual market disruption in the absence of a mutually
agreed situation. However, in situations involving
a real risk of market disruption only bilateral restraint agreements were possible. The Textile
Surveillance Body (TSB) was set up to monitor disputes regarding actions taken in response to
market disruptions.
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The MFA permitted certain flexibility in quota
restrictions for the exporters so that they could
adjust to changing market conditions, export
demands and their own capabilities. The MFA also provided for higher quotas and liberal growth
for developing countries whose exports were
already restrained. The MFA asked the
participants to refrain from restraining the trade of small suppliers under normal circumstances. In
general, developed countries, under MFA, chose
not to impose restrictions on imports from other developed countries
The TSB ensured compliance by all parties to the
obligations of bilateral agreements or unilateral agreements. It called for notification of all restrictive measures. A Textiles Committee-established as a management body consisting of
all member countries - was the final arbiter under the MFA and worked as a court of appeal for
disputes that could not be resolved under TSB.
Unsatisfactory experience with several extension
protocols of the MFA, retention clauses, such as
“good will”, “exceptional cases”, and “anti-surge” and
other trade related factors led the developing
countries to press for the inclusion of the textile issue
in the agenda of the GATT Ministerial meeting.
The eventual outcome of prolonged negotiations was
the Agreement on Textiles and Clothing.
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Agreement on Textiles and Clothing (ATC)
The ATC calls for a progressive phasing out of all the
MFA restrictions and other discriminatory measures in a period of 10 years. In contrast to
the MFA, the ATC is applicable to all members of the WTO.
Four Steps over 10 Year
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Steps Percentage of How fast remaining products to be quota should brought under open up, if GATT 1994 rate was(including 6%removal of quotas)
Step 1 16 percent (minimum 6.96 percent annuallytaking 1990
1st Jan 1995 - 31st Dec 1997 imports as base)
Step 2 17 percent 8.70 percent annually
1st Jan 1998 - 31st Dec 2002
Step 3 18 percent 11.05 percentannually
1st Jan 2002 - 31st Dec 2004
Step 4
1st Jan 2005
Full integration into GATT and final elimination of quotas, ATC terminates
49 percent (maximum) No quotas left
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Top 10 Exporters (Textile)
Country 1990 1997
Billion US$ % share Billion US$ % shareHong Kong 7.99 7.68 14.6 9.42
China 7.10 6.82 13.83 8.92
South Korea 6.04 5.81 13.35 8.61
Germany 14.00 13.46 13.05 8.42
Italy 9.80 9.43 12.9 8.32
Taiwan 6.13 5.90 12.73 8.21
USA 5.03 4.83 9.19 5.93
France 7.21 4.65 5.86 5.64
Belgium-
Luxembourg 6.54 6.29 7.01 4.52
Japan 5.88 5.65 6.75 4.35
Total (Top 10) 74.36 71.5 110.62 71.37
World 104.00 100.00 155.00 100.00
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Top 10 Exporters (Apparel)
Country 1990 1997
Billion US$ % share Billion US$ % shareChina 9.41 9.14 31.8 21.06
Hong Kong 15.37 14.92 23.11 15.30
Italy 12.07 11.72 14.85 9.83
USA 2.57 2.49 8.68 5.75
Germany 7.82 7.59 7.29 4.83
Turkey 3.44 3.34 6.7 4.44
France 4.65 4.51 5.34 3.54
UK 3.08 2.99 5.28 3.50
South Korea 8.11 7.87 4.19 2.77
Thailand 2.86 2.78 3.77 2.50
Total (top 10) 69.38 67.36 111.01 73.52
World 103.00 100.00 151.00 100.00
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EU Top Ten Suppliers of MFA Clothing: Rank Price (AGR 1994-96)
1995 1996 RankPrice
Ranks and Average Price Ranks and Average PriceCAGR
1994-96
Country Rank in Rank in Avg. Rank in Rank in Avg. Price,
Value Volume Price, Value Volume Ecu/KgEcu/Kg
China 2 1 9 1 1 8 3
Turkey 1 2 2 2 2 6 7
Hong Kong 3 3 6 3 3 5 9
Tunisia 4 7 3 4 6 3 4
Morocco 5 6 5 5 7 4 2
Poland 6 8 2 6 8 1 8
India 7 5 7 7 5 9 10
Bangladesh 8 4 10 8 4 10 5
Romania 9 10 4 9 10 2 1
Indonesia 10 9 8 10 9 7 6
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Post-MFA / ATC Scenario
It is generally believed that quota phase-out can only
be beneficial for the industry. In 1993, a study of seven countries found that the price of cotton yarn per kilo, was cheapest in India at US$ 2.79, compared to
US$ 3.30 in Brazil, US$ 4.19 in Japan, and US$ 3.10
in Thailand. This was because overall labour and raw
material costs are cheaper in India.
However, it should be realised that the opposite can also happen. Removal of quotas may open new
frontiers but will also close captive markets. The EU
and the US will no longer be restrained in buying as
much as they want from the cheapest possible
sources. Some argue that the ending of quotas will result in cut-throat competition between developing
countries. Coupled with this is erosion in the growth ofmarkets in industrial countries. Apparentconsumption of textile products, in real terms, remained stagnant during the decade1985-95.Purchases become discretionary and fashion-driven. As a result, fashion cycles got shorter and order- cycles compressed. Retailers order requirements on
short-order cycle term and demand rapid responses
to in-season ordering. Hence, they are compelled to secure their supplies of top-up orders from those in
close vicinity.
There is, therefore, a propensity towards sourcing from low-cost countries in the neighbourhood as
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also a growth of offshore processing by
manufacturers in developed countries. Regional integration reinforces this.
Further exporters in India fear that freer imports could
lead to dumping of low-cost fabrics from China and
other Southeast Asian countries. Thus, the industry
needs restructuring on all fronts. Although the policy
framework can be blamed partially for its ills, internal factors are equally important.
Recent studies indicate that India is beginning to lose out to its rivals. In one survey of US textile and
apparel imports, China and Hong Kong had higher market shares than India. In certain categories, other Asian low cost producers like Pakistan and Indonesia
had higher market shares and had emerged as close
competitors to India.Because many of these
countries depend on imports, however, India can take advantage of home production.
Further, formation of NAFTA means direct competition from the Latin American countries. The
United States has farmed-out offshore processing
work to enterprises in Mexico and the Caribbean
Base Initiative countries. Similar relocation has taken
place in Europe with manufacturers shifting base to
Eastern Europe, which provides similar advantages of cheap labour and proximity.
According to projections by TECS, EU imports of ready-made fabrics will double between 1994 and
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2004, as a result of the elimination of quotas. US
imports are expected to treble over the same period.
According to another prediction, apparel output could more than double (i.e. expand by 241%) between
1995 and 2005, compared to an increase of only 114%, without the agreement on textiles and clothing.
By increasing market access, the ATC will generate
multiplier effects in the Indian economy, eventually
feeding back into the textile industry itself. The rise in
demand for exports could increase output and employment in the textile industry. This in turn will stimulate the agricultural sector to meet the rising
demand for cotton. As profits rise, so will wages, which will act as further stimulus. The export boom in
the textile and clothing industry will also generate
considerable foreign exchange.
Given India‟s high quota growth rates during the
phase-out period, its competitive product niches and
established links with retailers and importers in
developed countries, it should experience vigorous
growth in the future. The World Bank predicts a
growth rate of 16% per annum in the coming decade.
Ultimately, the extent that India will benefit from trade liberalisationdepends on its current cost competitiveness, its ability to increase productivity and upgrade quality.
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Implications on Indian Exports (Optimistic Scenario)
Yarn+ Garment exports of Bangladesh increase leading to increase in consumption
of Indian fabric and yarn+ Exports of Far-East & ASEAN increase further + Rationalization in duties of MMF leading to increase in processing of fibres in
India
Fabric/Made-ups
+ Garmenting dereserved leading to entry of large textile players ensuring
efficient sourcing and increase in the margins + Increase in investment for processing + Improvement in SAPTA trade
Garments
+ Garmenting and Knitting de-reserved to allow the units to grow bigger to be
able to service large orders and large clients + Labor laws in India become industry friendly + Garment parks come up in key regions giving a boost to exports+ Successful Quota Phase-out without exports
getting restricted by QRs
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Fig in US$ Mn
1994 1998 2002 2005* 2010*
Yarn 590 1780 2333 2701 3131
Made-ups 851 1498 2620 4527 11266
Fabric 1214 1716 2512 3530 7100
Garments 3713 4829 6510 10794 21711
Total 6368 9823 14035 21552 43208
* Projections
Implications on Indian Exports (Pessimistic Scenario)
Yarn
- Change works to the advantage for S. Korea/ASEAN/Far-East- Demand for packages increases- EEC other garment supply countries invest in back-end processes
Fabric/Made-ups- Environmental Clause impacts- Investment in processing does not happen- Blends and synthetic fabrics dominate reducingadvantage of Indian cotton
Garments- Social clause impact leading to ban on some categories, etc.
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- SSA is a reality impacting exports of garments from India to USA and EU- FTA becomes a reality- Other projectionist measures come up
As opposed to the optimistic scenario, the pessimistic scenario shows a shortfall of nearly US $4000 mn of exports in year 2005 and the exports are not likely to be much higher than the present figures. It would also lead to development of textile and clothing industry in the other nations and India would lose out as a significant player in the industry. This would also stifle the domestic textile industry which would be in a very weak position to compete with imports. (These
are expected to become cheaper with import duty rationalization as per international treaties and cost competitiveness of overseas players). Some of the subsidies currently extended by the Indian government to promote exports which are sector specific(TUF, 80 HHC) or region specific (EPZS, EOUS) may also need to be withdrawn.
Fig in US $ Mn
1994 1998 2002 2005* 2010*
Yarn 590 1780 2003 2126 2022
Made-ups 851 1498 2038 2427 3098
Fabric 1214 1716 1931 2050 2154
Garments 3713 4829 5435 5939 6885
Total 6368 9823 1140 1254 1415 8 2 9
* Projections
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Conclusions
To effectively tackle the situation India needs to invest in research and development to develop new
products, reduce transaction costs, reduce per unit costs, and finally, improve its raw material base. India
needs to move from the lower-end markets to middle
level value-for-money markets and export high value- added products of international standard. Thus the
industry should diversify in design to ensure quality output and technological advancement.
The weakest links in the entire chain are the
powerlooms and the processing houses. The latter especially are very important because they are
responsible for the highest value addition in the
manufacturing line.A powerloom co-operative
structure could be evolved for pooling of common services and functions such as quality testing, marketing, short-term financing, etc.Further,because of the geographical proximity enjoyed, a
cluster approach can be adopted.
The government also needs to make policy changes
like dereserving the small-scale sector so that it can achieve economies of scale and adopt a synergistic
approach.
Handlooms by their very nature can adopt a strategyof "niche” marketing. In this respect, exportpromotion, common credit and marketing facilities and
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more significantly publicity are important areas for co- operation. Here too, a co-operative structure would
be useful though government agencies should be
involved because of their outreach. Newer and more innovative forms of involvement are required where
decentralisation should be a key element.
India has made little attempt to forge partnerships - in
equity, technology and distribution in overseas
markets. The newer nuances of global apparel trade
demand joint control of brand positioning, distributing
and quality assurance systems.
The Indian textile industry has recognised the need
for a cradle-to-grave approach when tackling
environmental issues i.e. eco prescription should be
applied right from the stage of cultivation to spinning
to weaving to chemical processing to packaging.
Here especially there is great scope for private -public partnerships.
A great deal of work has been done by Indian trade
and industry to comply with ecological and
environmental regulations, and so Indian garments
can adopt an appropriate label signifying a distinct quality.
Efficiency and output of handloom and powerloom
sectors also needs to be increased. The clothing
sector needs the support of high quality and cost- effective cloth processing facilities. Modernisation of mills is a must.
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Human resource is another area of focus. The
workforce must be trained and oriented towards high
productivity.
The business environment of the future will be
intensely competitive. Countries will want their own
interests to be safeguarded. As tariffs tumble, non- tariff barriers will be adopted.New consumerdemands and expectations coupled with new
techniques in the market will add a new dimension.
E-commerce will unleash new possibilities. This will demand a new mindset to eliminate wastes, delays,and avoidable transaction costs. Effectiveentrepreneur-friendly institutional support will need to
be extended by the Government, business and
umbrella organisations.
Areas where German development co-operation can help are enumerated below.
Input Areas
Policy framework is complex with inputs from
many ministries. The following chart is not meant
to be exhaustive but only to indicate areas where German development co-operation can have an
impact.
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NATIONAL ECONOMIC POLICY
Industrial Policy / Textile Policy
Planni Financ Invest Export Manpo R&D Infrastr ng ing ment wer ucture
Competitive Credits Promotion Bilateral Education Quality control Portspositioning agreements
Evaluating Aid through Information Export Training Productivity Containers
domestic and multi-lateral technology promotionforeign needs agencies
Export strategy Sector specific Development of Skills and Standardisation Airportssupport development
industries
Export Machinery / Welfare ISO 9000 Roadsfinancing spares
Synthetic raw Literacy Packaging Railmaterials
Language R&D Telecom
Entrepreneur Ecologydevelopment standards
Power
Water
Gas
Possible Indo-German Co-operation in Textiles
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Areas of Co-operation
Provision of co-operative structures for quality testing,
marketing, brand-building
Technological upgradation (egs. Effluent treatment plants,energy saving devices, and other machinery related directly to the production process like spreading, cutting, finishing, etc.)
Adoption of environment-friendly technology to pre-empt the
adverse impact of non-tariff barriers. This includes environmental monitoring/ testing equipment and services,combating air pollution (package scrubber, special air pollutant treatment for H 2 S, CS2 ), solid waste removal, wastewater disposal
Development of textile-specific software for India, Computer- Aided Textile Designing, aiding IT integration
Working out alternative techniques / frame conditions such that sanitary and phyto-sanitary measures are not a problem
Managerial training to encourage adoption of techniques like JIT, Quick Response Systems
Usage of EPS (Electronic Point of Sale) software
Promoting labels like RUGMARK (carpets) in textiles so that consumers are satisfied that child labour has not been employed, to counter negative publicity generated by the "Clean
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Clothes" movement, etc.
Promoting hand-made articles by improving quality of raw
materials and introducing machinery where possible in the process so as to maintain standards of quality and design
Development of new products
Adoption and adaptation of state-of-the-art information technology in enterprise resource planning so as to pre-empt
non-tariff barriers which curtail markets for the Indian textile industry
Helping firms build close relationships with customers
Training centres
Short-term credit
Improvement of synthetic fibre-base to reap economies of scale, use of genetic engineering, bio-technology, and cellular biology in both natural and synthetic fibre-base
ENVORONMENTAL ASPECTS IN THE TEXTILE TRADE
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There is always an environmental impact the textile
production.The impact starts with the use of pesticides during the cultivation of plants for the
natural fibres, the erosion caused by the sheep farming or the emissions during the production of synthetic fibre. So there is the environmental effect in
the process of production, where thousands of different chemicals are used to reach the final stage
of textile products.
Awareness of environmental problems has increased
considerably during recent years and the environment has become a major issue in the
international textile trade.This is due to theenvironmental and health legistation and the
environmental policies that is being executed through
market demands. The end users in developed
countries are highly sensitive about the issues like
azo dyes and child labour in the textile production. The action by the developed countries in this matter was put as Non-Tariff Barriers for the exports from the
developing countries like India.
ENVIRONMENTAL LEGIILLATION
Developed countries are reviewing the regulation of
harmful substances in the textile products. The major issues are.
a) Ban on azo dyes
b) Regulation of formaldehyde
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c) Regulation of Pentachlorophenol (PCP)
d) Limit values for residues of pesticides
e) Ban on allergic disperse dyesf) Regulation of the content of chromium.
Most of the operative legislation is applicable to the
importer who places the product on the developed
country markets. The importer requires mostly legally
binding guarantees. The requirements are often
included in the LC.
The environmental developments in connection to the textile trade may be classified as:
(i) Product oriented policy
(ii) Process oriented policy
(iii) Waste management policy.
PRODUCT ORIENTED POLICY
Under this policy, the product is considered directly or indirectly responsible for any adverse environmental
effects that occur in the entire industrial chain. So the product is thought to be the starting point for the
reduction in the impact on environment. Under this, the Life Cycle Assessment (LCA) is the major criteria
to evaluate the product‟s impact on environment. In
other ward, the environmental impact of a product is
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based on the pollution caused by the extraction of its
raw material, by itsprimary & secondarymanufacturing, by its consumption and maintenance
and in its waste.
The product oriented policy focuses on there
measures.
1) Regulating measures, which puts the legislation
concerning the composition of products.
2) Facilitating measures, which by using the market mechanism reduces the environmental impact of a
particular product.
3) Stimulating measures, which works through more
awareness to the consumers.
PROCESS ORIENTED POLICY
This environmental policy aims at a particular industry
(company). The policy has the sole purpose of reducing the environmental problems of production
process in a specific company.
WASTE MANAGEMENT POLICY
The waste management policy aims at reducing the
environmental problems caused by discarded
products and packaging material, which have reached
the waste phase.
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Legislation on packaging has been implemented in
Germany on the obligation for producers and
importers to take back used packaging materials. In
1997, the European Directive concerning packaging and packaging waste has been implemented in the
national legislation of its member states.
OTHER ENVIRONMENTAL ISSUES
1) Ban on Azo dyes.
Now the developed countries are more concusses on the use of Azo dyes in the textiles production. Azo
dyes are the colouring agents in the textile industry. In contact with the skin, Azo dyes may form
carcinogenic substances(amines). Germany andNetherlands have banned all Azo dyes, which can
split off any of the 22 listed carcinogenic amines.
The Netherlands, Austria and Germany are the only
Member states that have already adopted national legislation banning the use of carcinogenic
azocolourants.
The Netherlands adopted a Regulation banning the
import and sale of products containing azo dyes, which entered into force in 1997. The ban covers
bed linen, clothing and shoes. The regulation
forms part of the Dutch “Commodity Act”.
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Germany banned the import and sale of textile
dyed/printed with certain azo dyes, effective
from April 1,1996.
Austria adopted legislation banning the marketing
and use of products containing azo dyes (trade and
use of azo dyes as such is not prohibited in any EU
country). The law entered into force in 1997. The
Austrian legislation relies on the same analytical
method to measure the content of azo dyes in
products as the German and the Dutch provisions.
2. ECO Labels
Eco labels ensures a company that produces a
product is eco- friendly and so it gets a friendly
response from the importers. Eco labels for textiles
are widely recognized and is gaining much
importance in the developed countries like EU and
USA. The following Eco labels are important in the
textile products.
a) Health Eco Labels
b) Environmental Eco-labels
c) Organic Eco labels
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d) Social labels
The world wide recoginised Eco-label for textiles is
OKO-TEX 100, which guarantees the consumer that
the product will not harm the health during wearing.
OKO-TEX 100 requires unit values/concentrations on
PH, carcinogenic, azo dyes, formaldehyde,
chlorinated phenols, pesticides, heavy metals and
allergic dyes.
3. Environmental Management System
The introduction of policies like environmental management system by the developed countries is
important to the exporters in the developing countries like India. The ISO14001 standard is the onlystandard for the environmental management system
accepted worldwide. This system involves.
(i) A complete overview of the environmental impact
of the company can be obtained.
(ii) The environmental impact of the company can be controlled.
(iii) Whenever possible, the environmental impact of the company can be diminished.
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4. Waste water Management
The biggest enviromental problem associated with the
textile industry is the water pollution caused by the discharge of untreated effluents. Waste water arising
from the washing and dyeing sections of production
contains a substantial amount of organic and
suspended pollution, such as dyes and caustic soda, which have a negative impact on environment. The
growing concern on this issue by the developed
countries requires an immediate action to manage it properly.
The trade of textile products is very much sensitive in
respect of the environmental issues and so the
importers may demand certain guarantees for product, for example some of the leading importers at EU market demand that all textile purchased have
been tested according to OKO-TEX 100. So the growing concern regarding the environmental impact of the textile production should be taken care of much
in advance, otherwise the exports of textile products
to the traditional markets and developed countries will be hindered with more and more Non-Tariff barriers
(NTBs).
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GLOBAL TRADE IN TEXTILES AND CLOTHING
TEXTILE TRADITION OF INDIA
India has a diverse and rich textile tradition. The origin of
Indian textiles can be traced to the Indus valley civilization.
The people of this civilization used homespun cotton for
weaving their garments. Excavations at Hardpan and
Mohan - jo-Daro, have unearthed household items like
needles made of bone and spindles made of wood, amply
suggesting that homespun cotton was used to makegarments. Fragments of woven cotton have also been found
from these sites.
The first literary information about textiles in India can be
found in the Rigveda, which refers to weaving. The ancient
Indian epics-Ramayana and Mahabharat, also speak of a
variety of fabrics of those times. The Ramayana refers to
the rich styles worn by the aristocracy on one hand and thesimple clothes worn by the commoners.
Ample evidence on the ancient textiles of India can also be
obtained from the various sculptures belonging to Mauryan
and Gupta age as well as from ancient Buddhist scripts and
murals (Ajanta caves). Legend has it that when Amrapali, a
courtesan from the kingdom of Vaishali met Gautam
Buddha, she wore a richly woven semi transparent sari,
which speaks volumes of the technical achievement of the
ancient Indian weaver.
India had numerous trade links with the outside world and
Indian textiles were popular in the ancient world. Indian
silk was popular in Rome in the early centuries of the
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Christian era. Hoards of fragments of cotton material
originating from Gujarat belonging to 5th century A.D.
have been found in the Egyptian tombs at Fostat. Cotton
textiles were also exported to China during the heydays of the silk route.
Silk fabrics from south India were exported to Indonesia
during the 13th century. India also exported printed cotton
fabrics or chintz, to European countries and the Far East
before the coming of the Europeans to India. The British
East India Company also traded in Indian cotton and silk
fabrics, which included the famous Dacca muslins. Muslinsfrom Bengal, Bihar and Orissa were also popular abroad.
The past traditions of the textile and handlooms can still be
seen amongst the motifs, patterns, designs, and the old
techniques of weaving, still employed by the weavers.
THE INDIAN SIGNATURE COLLECTION
The Indian signature collection consists of exotic textiles
such as Madras checks from Tamil Nadu, ikats from
Andhra and Orissa, tie and dye from Gujarat and Rajasthan;
brocades from Banaras, jacquards form Uttar Pradesh.
Daccai from West Bengal, and phulkari from Punjab.
Despite this regional distinction there has been a great deal
of technical and stylistic exchange. The famed Coimbatore
saris have developed while imitating the Chanderi pattern
of Madhya Pradesh. Daccai saris are now woven in Bengal,
not in Dhaka. The Surat tanchoi based on a technique of
satin weaving with the extra weft floats that are absorbed in
the fabric itself has been reproduced in Varanasi. The
Baluchar technique of plain woven fabric brocaded with
untwisted silk thread, which began in Murshidabad district
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of West Bengal, has taken root in Varanasi. Their
craftsmen have also borrowed the jamdani technique.
Woolen weaves are no less subtle. The Kashmiri weaver is
known the world over for his Pashmina and Shahtooshshawls. The shawls are unbelievably light and warm.
The states of Kashmir and Karnataka are known for their
mulberry silk. India is the only country in the world
producing all four commercially known silks - mulberry,
tasser (tussore), eri and muga. Tasser is found in the remote
forests of Bihar, Madhya Pradesh, Orissa, West Bengal,
Andhra Pradesh and Uttar Pradesh. Eri is soft, dull and haswool like finish. Assam is the home of eri and muga silk.
Muga is durable and its natural tones of golden yellow and
rare sheen become more lustrous with every wash. The
designs used in Assam, Tripura and Manipur are mostly
stylized symbols, cross borders and the galaxy of stars.
In the ikat tie and dye process, the designs in various colors
are formed on the fabric either by the warp threads or theweft threads or by both. The threads forming the design are
tied and dyed separately to bring in the desired color and
the simple interlacement of the threads produces the most
intricate designs that appear only in the finished weaving. It
is believed that ikat was an innovative technique, first
created in India, which was later carried to Indonesia, the
only other place in the world with a strong ikat tradition.
INDIGENOUS DYING AND PRINTING
The process of resist-dyeing, tie-dyeing and yarns tie-dyed
to a pattern before weaving were the basic techniques of
indigenous dyeing of village cloth. Shellac was used for
reds, iron shavings and vinegar for blacks, turmeric for
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yellow and pomegranate rinds for green. Before the
artificial synthesis of indigo and alizarin as dye stuffs, blues
and reds were traditionally extracted from the plants
indigofera, anil and rubia tintorum (madder-root). Thesewere the main sources for traditional Indian dyes. Even
today, the Kalmkari cloth of Andhra Pradesh is printed with
local vegetable dyes. The colors being shades of ochre,
deep blue and a soft rose derived from local earths, indigo
and madder roots.
Andhra Pradesh has made a significant contribution to the
history of hand-printed textiles in India. Printing is nativeto the land, its pigments being obtained from the flowers,
leaves and barks of local trees and chemicals obtained from
clay, dung and river sands. A new technique has been
developed in the northern sectors where warp threads are
lined, measured and tied to the loom and then printed. The
warp-printed material is a specialty of Haryana and Uttar
Pradesh.
The ideal seasons for block printing are the dry months.
Excellence is achieved only if the block is freshly and
perfectly chiseled. The designs are produced by artists and
the designing is kept within the discipline imposed, the type
of yarn, the dyes used and the weaving techniques, by the
nakshabandhas (graph-paper designers).
Given the wide and exciting range of handloom it is notsurprising that the rich and beautiful products of the
weavers of India have been called “exquisite poetry in
colorful fabrics.”
GLOBAL TEXTILE AND CLOTHING TRADE
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As per the international trade statistics for 2000,brought out by the World Trade Organization [WTO], global exports of textiles and clothing amounted to US
$ 356.44 billion in which clothing accounted for 55.8% (USD 198.94 billion) and textile accounted for 44.2%
(USD 157.5 billion). India‟s share in global textile and
clothing trade has been 2.87% valued at US$ 10.24
billion during the year 2000.
TEXTILE & APPAREL INDUSTRY AT A GLANCE
The Textile and Clothing industry in India accounts for14 % of the manufacturing sector output, about 35.5
% of export earnings and employs about 26 million
people. Its net foreign exchange earning is also one
of the highest, 75% of the exports. The Indian Textile
and Apparel industry represents a mosaic of widely
diversified sectors with the organized and integrated mill sector, medium and small scale Powerloom
sector, handloom sector, hosiery sector, apparel manufacturers in SSI and Spinning mill sector spread
all over India. The exports in this sector comprise
yarn, fabrics, made-ups, garments, handicrafts, jute
and coir.
APPAREL/CLOTHING SECTOR
The share of Ready-made garment (RMG) in Textile
and Apparel exports is 40-45%. It accounts for over1.6% share in GDP and 7% of the industrialproduction in India. India‟s apparel exports basket
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consists of T-shirts, Ladies blouses, Gents shirts, Skirts, Shorts, Trousers, Nightshirts and Nightwear chiefly made from cotton fabrics. The major markets
for RMG are European Union, USA, Australia and Canada.
The apparel sector basically consists of knitted and
the woven garment segments. By and large, the
industry has doubled its production levels over the
last 8 years, which means it has grown at an average
growth rate of 12% overall. However, this growth has
not been uniform for both the segments. The knitted
segment has grown faster than its woven sibling, having grown almost three times; whereas the woven
segment grew slowly at the rate of 1.5 times.
TEXTILE SECTOR
The textile industry occupies a unique position in the Indian economy. Its predominant presence in the
Indian economy is manifested in terms of its
significant contribution to the industrial production, employment generation and foreign exchange
earnings. It has immense potential for employment generation, particularly in the rural and remote areas
of the country on account of its close linkage with agriculture.
Indian textile industry has a significant presence in the
world textile economy by virtue of its production of textile fibres/yarns. It accounts for about 21 per cent (35 million spindles) of the world spindleage of 166.36
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million spindles, the second largest after China and
three per cent of the world rotorage of 7.81 million. With almost 5.7 million looms (including handlooms),
the industry has the highest loomage about 64 per cent of the world loomage of 8.9 millions. It is the
largest producer of jute and the second largest producer of silk and the third largest producer of cotton, cotton yarn and cellulosic fibre/yarn in the
world. It is also the fifth largest global producer of synthetic fibre/yarn.
The Indian textile industry is predominantly cotton based which accounts for65 percent of fibreconsumption. Taking a cue from global consumption
pattern, it is obvious that India needs to produce more
synthetic fibre based products to meet the
international demand.
MMF Textile Sector
Man-made fibres today account for more than 60% of the world production in textiles and its share is
growing at a steady pace. In keeping with the world
trend the MMF industry in India also grew rapidly
during the 90's. Exports of Indian MMF textiles have
increased significantly in tune with the world trade
during last 10 years. MMF exports, which were USD
303 million in 1990-91, have grown by 316% to reach
USD 1260 million in 2000-2001. The exports are
directed to163 countries. The highly sophisticated
and quality conscious EU is the largest importer followed by the Middle East, Gulf and the Asian
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region. UAE continues to be the leading market for Indian synthetic textiles, followed by the United
Kingdom. The other main markets are Italy, Spain,
Turkey, USA, Germany, Belgium, Saudi Arabia and France.
Cotton Textile Sector
Exports of cotton textiles (yarn/fabrics/madeups)increased to US$ 3643.23 million during the financial 1999-2000, as against US$ 3423.28 million in the
year 1998-99, marking a growth of around 6.42%.Exports of cotton yarn have shown a phenomenal growth in recent years, rising from US$ 403 million in
1992-93 to US$ 1.54 billion in 1999-2000, marking an
increase of about 282% during this period. India has a
share of27% in the world trade in cotton yarn. Exports of cotton fabrics have also shown a steady
growth during the last five years from US$ 613.33 million in1992-93 to US$ 1.1 billion in 1999-2000. Exports of cotton made-ups have also shown a
steady growth over the years, rising from US$305.67
million in1992-93 to US$ 1005.3 million in 1999- 2000, representing an increase of 229% during this
period.
Wool And Woollen Sector
India‟s production of wool and woollen textiles, though
a tiny percentage of the world production, has some
inherent strengths with a capacity to give the
consumers exclusive/niche products based on
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traditional designs and colours. Indian shawls,especially, hand-embroidered ones and Pashmina
shawls are finding a very good market in the world.
Indian woollen knitwear is valued for the handwork done on it. New blends like wool/lycra, Australian
sports wool and optim fibre are the major thrust blends which will find emerging goods markets for knitwears and shawls.
Silk Sector
India has the distinction of being the only country in the world to produce all the commercially known
varieties of silk - Mulberry, Tasar, Eri and Muga. The
production of Mulberry raw silk during 2001 has been
14000 tons. The main items being produced in India
are mixed/blended silk fabrics, dress material, saris, scarves, stoles, cushion covers, bedspreads, carpets
and silk garments. The total export of silk items is USD 400 million. The USA and the EU import about two-thirds of the silk textiles exported from India. The
other markets are the Middle East(for traditionalsarees), Singapore, Hong Kong, Japan, Australia and
South Africa.
TEXTILES TRADE STRENGHTS
Contrary to the global trends towards integration and
economies of scale, the Indian textile Industry is a
unique case of disintegration. There are 2290 players
in the organized spinning sector; only 278 composite
mills and thousands of weaving units,14500
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independent processing units and innumerable
garment manufacturers and countless retailers. India
has the largest cotton acreage in the world, and
cotton is the dominant fibre in the Indian industry. Almost all cotton used in India is grown locally.
1. Large Production Base
India is a producer and exporter of quality textiles and apparels. India has a large production base with
integrated mill sector, State of the art Apparel manufacturers, Powerlooms, Handlooms, Knitters and
spinners.
2. Wide Product Range
India produces almost all types of fibers and yarns
and has achieved near self sufficiency in some
sectors such as those producing polyester fiber and
filament yarn. India offers a trendiest range of apparels, alluring range of made-ups and exotic range
of fabrics to discerning international buyers.
3. Modern Technology
The textile and apparel industry in India employs
modern technology in production. This is especially
visible in the case of the raw material, i.e. yarn and
fiber, producing sectors, which in turn is reflected in
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the high quality of products comparable to reputed
international brands.
4. Competitiveness
The industry enjoys cost advantages due to creation
of huge production capacities. Indian items are
competing with products of such textile giants like
Japan, Korea and Taiwan and have come out on top. The secret of India's success lies in the unmistakable
quality of its textiles, competitive prices and reliable
supply.
5. Unique Advantages to Importers
Textiles and Apparel Industry in India has certain
unique advantages which are beneficial to overseas
buyers.
a) With centuries old tradition, industry has
perfected the art and science to produce
exquisite goods.b) Industry is self sufficient and vertically integrated.c) Diversified small lot production system which can
cope better with the changes in fashion
demands, short response time and smaller lots
offered.d) Also capable of catering to volume orders.e) Wide range of production including sophisticated
high qualities as well as those required for middle
and low end consumers.
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6. Made-up Articles - specialty items
Exports of made-ups have been increasing at a
steady pace. India offers an alluring range of made-up items like scarves/stoles/pupates and ordains in
exotic shades, intricate patterns and magical finishes. Dyed, printed and embroidered dupattas/odhanies in
metallic stripes, sequins and pearl/bead works which
are in great demand in the Arab world is a specialty of India.
QUOTAS & QUOTA RELATED PROBLEMS
Nearly 80% of Indian clothing exports go to the US
and EU where they face quota restrictions. A lesser percentage of total textile exports are subject to
quotas. During the course of the first two Multifiber
Arrangements in the 1970s, Indian exporting firms
enjoyed a relatively unrestricted growth, since their export quantities had not reached the limits set by the
quotas. However, during the third phase, some
quotas started to bite. By 1987, apparel exports were
curtailed by quota ceilings for most categories.
The Uruguay round of multilateral negotiations
brought the Multi-fiber Arrangement to an end and the
WTO members agreed to enter into reciprocal and
mutually advantageous arrangements directed to the
substantial reduction of tariffs and other barriers to
trade and to the elimination of discriminatory
treatment in international trade relations.
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Although the integration schedule and quota phase- out under ATC was originally intended to be a gradual affair, it has actually been followed in letter only and
not in spirit. The developed countries have not integrated items of “commercial significance” into the
world trading system even after 70% of the period of integration schedule is over. Consequently, the most intensive items like shirts and women‟s outerwear, in
which India has an advantage, will not have their
quotas removed until 2005 leading to a problem of uncompetitive prices, pushed higher by the cost of paying for quotas.
The two largest restraining Members USA and EU
have not taken any specific measures to facilitate
increased competition in their markets. On the
contrary, at the very beginning of integration process, the US administration announced its policy to
postpone integration of the large bulk of restrained products until the end of the transitional period of the
ATC. The EU, on its part, has insisted on additional reciprocal market opening commitments by
developing countries before it could consider any
meaningful liberalization of its restrictions. India
signed bilateral agreements with the EU and US to
secure reciprocal market access for textiles and opened its markets to foreign goods by removing
import restrictions on textiles such as fibers, yarns
and industrial fabrics, as well as reducing its tariffs.
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IMPACT OF FREE TRADE, PREFERENTIAL
TRADE AGREEMENTS & RULES OF ORIGIN
The agreements under the World Trade Organization will have their deepest impact on the Indian textile
and clothing industry. The reason is obvious: It is one
of the biggest sectors of the economy. It is the only
industry that is self-reliant and complete in the value
chain - from raw material to the highest value added
products. Consequently, the growth of this industry
has a significant bearing on the overall development
of the economy. The impact of liberalization through
WTO on Indian Textile market is yet to be
experienced in a big way since most of the
liberalization under ATC is „back loaded‟ and will take
place in the last year i.e. 1.1.2005. As it stands out India has already lowered duties substantially below
committed levels and opened its market while the EU
and US has so far integrated insignificant products and the most important products would be integrated
in the year2005. Textile companies are already
complaining of the „Chinese‟ onslaught in this sector.
A major offshoot of the free trade regime is the
frequent use of the anti dumping and anti subsidy
action by the developed countries. The European
Commission (EC) has been particularly active in this
regard. In the last decade, the EC has initiated
proceedings on PTY, PSF, Polyester Spun Yarn and
Polyester Staple fiber fabrics originating from
developing countries including India.
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The repeated recourse to such investigations and back to
back investigation has resulted in losses for business and
caused considerable damage to trade and competition. In
fact anti-dumping levies are far more lethal than quotarestraints especially as they have the potential to restrict
sales and erode competitive edge in view of the direct
impact on the price of the product. There has been sharp
decline in imports from countries whose companies had
been targeted for alleged dumping. Besides, an anti-
dumping/anti-subsidy investigation entails significant
financial burden on the targeted companies.
PREFERENTIAL TRADE AGREEMENTS
The General System of Preferences (GSP) is anagreed exception to the MFN principle under which
the Donor Country grants preferential duty on goods
originating in beneficiary country which is lower than
the normal MFN duty. Each donor country is free to decide the level of concessions, the choice of goods
and the rules of origin in respect of GSP. Consequently, most GSP schemes are different from
each other in terms of the goods covered, the level of duty concession, the procedure to be used and the
rules of origin that apply.
The EU GSP scheme extends duty benefit to the
developing countries and provides special incentives
to promote core labor and environmental standards. The textile sector in India is not eligible for EU GSP
benefits while the same benefits are extended to
China, Indonesia, Malaysia, Sri Lanka and Thailand.
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However, the apparel sector in India benefits from EU
GSP scheme. But the concessions of duty free
access granted to Pakistan recently on account of
drug policy would increase the unhealthy competition and push the prices down in apparel sector.
The expansion of regional trade arrangements like
NAFTA, growing preferential arrangements with
targeted regions and countries under Arrangements
like Trade Development Act 2000 of the USA, EU's
enlargement programme to include Central & Eastern
Europe & Mediterranean rim countries etc., would act as insurmountable barriers to global free trade
resulting in adverse effect on Indian exports.
In fact data relating to imports of textiles and clothing
into USA shows that the share of imports from
countries covered by preferential trade arrangements
have increased from 19.5% in 1994 to 31.7% in the year 2000.
RULES OF ORIGIN
Rules of Origin are unilaterally altered by the
developed countries to the detriment of developing
exporting countries. Unilateral changes in Rules of Origin by USA have affected the trade of textiles and
clothing badly. As part of its legislation implementing
the results of Uruguay Round, the US substantially
altered its rules for determining the origin of textiles
and clothing products. The modified rules, put into
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effect from July 1996, resulted in major changesdisadvantageous to developing countries. Since the
process of harmonization of Rules of Origin of various
countries is being undertaken in the Committee on Rules of Origin, no member country should be
allowed to make any further changes in their Rules of Origin till the harmonization process is completed.
FUTURE PERSPECTIVES
In the midst of liberalization under WTO framework,
the future perspective of Indian Textile & Apparel Industry in post GATT era can be summarized as
under:
Exports of textile and apparel products will be
quota-free and will only be based on market considerations namely product attributes, pricing,
promotion such as advertising, brand building and other sales promotion techniques, physical distribution - its cost and logistics decisions. The
quota restriction removal will increase both national and international competition; this being at a
possible higher level than the demand may mean
lower volumes and values.
The complete elimination of the Multi-Fiber Arrangement (MFA) quota regime with effect from
January 1, 2005, as per the ATC, may create a
`shock-wave' which could end up disrupting the
entire world textile and garment trade. Since the
quota phase-out schedule, as drawn up by
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industrialized countries, is heavily back-loaded with
most sensitive textile items not being freed from
quantitative restrictions (QRs) till the very end of the
transition period, there would be a sudden release of`pent-up supply pressure' which could lead to
intensified price competition and declining global prices. A taste of things to come has already been
experienced in the wake of the 1997 Asian financialcrisis, as devaluation greatly enhancedcompetitiveness and prices crashed across Asia, as producers in the region over-supplied the world.
It may be unlikely that the developed countries will completely open their trade doors after the MFA
phase out. The restrictions on import into those
countries may come in the form of non-tariff barriers
/ measures such as based on environmental issues, child labor, and health and so on. While the
importing countries continue to set high standards, Indian exporters are making the necessary
adjustments to meet these new standards.
The challenges that the Indian exporters face is not only from trade barriers in developed countries. The
removal of quotas which have been restricting
imports from specific sources means freer competition among exporters. The EU and US will buy from the lowest cost suppliers, and India may
often, but not always, be among them. However, the industry has made considerable adjustments in
order to maintain its international competitiveness.
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The GATT is aimed to reduce the levels of subsidies. The present export incentives and
subsidies will be reduced, resulting in an escalation
of the cost of production. The impact would be felt across different sectors, especially textiles and
clothing. Export of handloom fabrics may suffer a
setback due to lower or no subsidies and hence its
competitive advantage will lie in its unique design
capabilities.
Due to the reduction in import duties of synthetics, the power loom sector can strengthen its
competence on the cost front. The organized mill sector will have to restructure and emerge, inter- alias, as a major supplier of fabrics to the garment industry.
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Foreign Involvement
1) Foreign investment in
production and export exist but in a very limited way.
2) Government is relaxing rulesfor FDI (Foreign Direct Investment) and
making it more conducive and liberal.
3) Our present policies are also infavor of FDI and encoring by making the
policies less cumbersome.
4) At present Foreign
investment are there in finish fabrics and garment sectors and also in textile
machinery sector.
5) The EOU (Export OrientedUnits) are giving benefit to attract
foreign investment.
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History during the industrial revolution
Textile manufacture during the Industrial Revolution
The key British industry at the beginning of the
18th century was the production of textiles made with wool from the large sheep-farming
areas in the Midlands and across the country
(created as a result of land-clearance and
enclosure). Handlooms and spinning wheels
were the tools of the trade of the weavers in
their cottages, and this was a labour-intensive
activity providing employment throughout Britain, with major centers being the West Country; Norwich and environs; and the West Riding of Yorkshire. The export trade in woolen
goods accounted for more than a quarter of British exports during most of the 18th
century, doubling between 1701 and 1770 [1].
Exports of the cotton industry - centered in Lancashire - had grown tenfold during this
time, but still accounted for only a tenth of the
value of the woolen trade.
The textile industry grew out of the industrial revolution in the 18th Century as mass
production of clothing became a mainstream industry. Starting with the flying shuttle in
1733 inventions were made to speed up the
textile manufacturing process. In 1738 Lewis
Paul and John Wyatt patented the Roller
Spinning machine and the flyer-and-bobbin
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system. Lewis Paul invented a carding machine
in 1748, and by 1764 the spinning jenny had
also been invented. In 1771, Richard Arkwright
used waterwheels to power looms for the production of cotton cloth, his invention
becoming known as the water frame. In 1784, Edmund Cartwright invented the power loom. With the spinning and weaving process now
mechanized, cotton mills cropped up all over
the North West of England, most notably in
Manchester and its surrounding towns of Ashton-Under-Lyne, Stalybridge and
Dukinfield.
Textile mills originally got their power from
water wheels, and thus had to be situated
along a river. With the invention of the steam
engine, in the 1760s to 1800s, mills no longer
needed to be along rivers.
Post industrial revolution
Many of the cotton mills, like the one in Lowell MA, in the US originally started with the
intention of hiring local farm girls for a few
years. The mill job was designed to give them
a bit more money before they went back to the
farm life. With the inflow of cheap labor from
Ireland during the potato famine, the setup
changed, as the girls became easily
replaceable. Cotton mills were full of the loud
clanking of the looms, as well as lint and
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cotton fiber. When the mills were first built, a
worker would work anywhere from one to four
looms. As the design for the loom improved so
that it stopped itself whenever a thread broke, and automatically refilled the shuttle, the
number of machines a worker could work
increased to up to 50.
Originally, power looms were shuttle-operated
but in the early part of the 20th century the
faster and more efficient shuttle less loom
came into use. Today, advances in technology
have produced a variety of looms designed to
maximize production for specific types of material. The most common of these are air-
jet looms and water-jet looms. Industrial looms can weave at speeds of six rows per
second and faster.
By the later 20th Century, the industry in the
developed world had developed a bad
reputation, often involving immigrants in illegal "sweat shops" full of people working on textile
manufacturing and sewing machines being paid
less than minimum wages. This trend has
resulted due to attempts to protect existing industries which are being challenged by
developing countries in South East Asia, the
Indian subcontinent and more recently, Central America. Whilst globalization has seen the
manufacturing outsourced to overseas labor
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markets, there has been a trend for the areas
historically associated with the trade to shift
focus to the more white collar associated
industries of fashion design, fashion modeling and retail.
Areas historically involved heavily in the "rag
trade" include London and Milan in Europe, So
district in New York City, the Flinders Lane and
Richmond.
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Example of textile industries in India.
Indogulf Company
NIRMA STAINLESS STEEL Balaji Overseas
Keshavlal Mangubhai &
Co(Woodking24-india)
EURO BRIDGE
HYDRODRIVE SYSTEMS AND
CONTROLS PVT LTD
Manhar specialties
Linden Exports
Faizan international
One By One Cotton
Linden Exports
Charbhuja Derivatives
DANUBE FASHIONS LTD
Deep Incorporation
CSM EXPORTS
Spot Globo
Amco Industries Ltd.
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Distribution of textile sectors in Indian market:
Problems faced by Indian textile industriesaccording to “TIMES OF INDIA REPORT” on
July 05, 2007:
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THE TIMES OF INDIAJuly 05, 2007
aemployees
Sidhartha I tnnm
New Delhi: It isn't just IT engineers who are
in short supply. Sample this: garment units in
HI;::;./«Thirupurr,Tamil Nadu, are short of 30,000
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hands. Deather units near Chennai are esti¬mated to be short of 10,000-15,000 trained work¬ers. In Ludhiana, the story is not much dif¬ferent with close to 50,000 skilled employeesneeded by the hosiery sector.
**r The numbers which local industry associ¬ations shared with the National Manufactur¬
ing Competitiveness Council (NMCC) — taskedwith finding long-term solutions to step up in¬dustrial activity for job creation — are just in¬dicative of the problem that is now facing al¬most all sectors.
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There is a skill scarcity at every level — from a farmer moving to basic industrial sec¬tor to students graduating from ITIs and poly¬technics to engineering colleges and then toeven managers and leaders.
Even the numbers are not in sync with glob--al norms. In India, the annual intake in ITIsand polytechnics is estimated at around 700,000
— which is roughly the same as the numberof students who join engineering colleges.
"The number of diploma holders and the en¬gineering graduates (every year) is roughly thesame while the global norm is 1:20," says NMCCchairman V Krishnamurfhy No doubt, you findplumbers and electricians to fix the pipes andthe wiring at home but have you ever wonderedhow many are trained in a classroom setting.
"We need to step up the pace since main-"t^ining 12-14% manufacturing growth is not just
GARMENT UNITS FACING CRUNCH
about setting up factories. It takes much longerto build human capital," said Krishnamurfhy
Taking a cue from NMCC, Planning Com¬mission has swung into action with the intentof announcing the National Skill DevelopmentMission next month. But unlike most gov:ernment initiatives, the plan panel has askedindustry to chip in with inputs to train 10 mil¬lion people, who join the work force annually
Industry has been asked to assess the num¬ber of skilled employees who would be need¬ed in nearly a dozen sectors which range fromnot just the sunrise areas like pharmaceuti¬cals and retailing but also include the job cre¬ating segments of industry like leather. Theindustry has been asked to come up with spe¬cific skill sets that are required.
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Textile Composition In World Market:
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Productivity indices for textile industries
in India:
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CONCLUSION
The textile and apparel industry is one of the leadingsegments of the Indian economy and the largest source of foreign exchange earnings for India. This industry accounts4 % of the gross domestic product (GDP), 20 % of industriaoutput, and slightly more than 30 % of export earnings. Thtextile and apparel industry employs about 38 million peoplmaking it the largest source of industrial employment in Ind
India has the second-largest yarn-spinning capacity in theworld (after China),accounting for roughly 20 percent of theworld’s spindle capacity. India’s spinning segment is fairlymodernized; approximately 35 to 40 percent of India’sspindles are less than 10 years old. During 1989-98, Indiawas the leading buyer of spinning machinery, accounting fo28 percent of world shipments. India’s production of spunyarn is accounted for almost entirely by the “organized millsector,” which includes 285 large vertically-integrated
“composite mills” and nearly 2,500 spinning mills.
India has the largest number of looms in place toweavefabrics, accounting for 64 percent of the world’s installedlooms. However, 98 percent of the looms are accounted for India’s powerloom and handloom sectors, which use mostlyoutdated equipment and produce mostly low-value unfinishfabrics. Composite mills account for 2 percent of India’s
installed looms and 4 percent of India’s fabric output.
The handloomand powerloom sectorswere established withgovernment support, mainly to provide rural employment.These sectors benefit from various tax exemptions and othefavorable government policies, which ensure that fabricsproduced in these sectors are price competitive against thoof composite mills.
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• The fabric processing (dyeing and finishing) sector, theweakest link in India’s textile supply chain, consists of alarge number of small units located in and around thepowerloom and handloom centers. The proliferation of small processing units is due to India’s fiscal policies,
which favor small independent hand- and power-processing units over composite mills with modernprocessing facilities.
• The production of apparel in Indiawas, until recently,reserved for the small-scale industry (SSI) sector, whichwas defined as a unit having an investment in plant and
machinery equivalent to less than $230,000. Apparelunits with larger investments were allowed to operateonly as export-oriented units (EOUs). As a result, India’sapparel sector is highly fragmented and is characterizedby low levels of technology use.