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India Textile Industry is one of the leading textile industries in the world. Though was
predominantly unorganized industry even a few years back, but the scenario started
changing after the economic liberalization of Indian economy in 1991. The opening up of
economy gave the much-needed thrust to the Indian textile industry, which has now
successfully become one of the largest in the world.
India textile industry largely depends upon the textile manufacturing and export. It also
plays a major role in the economy of the country. India earns about 27% of its total
foreign exchange through textile exports. Further, the textile industry of India also
contributes nearly 14% of the total industrial production of the country. It also contributes
around 3% to the GDP of the country. India textile industry is also the largest in the
country in terms of employment generation. It not only generates jobs in its own industry,
but also opens up scopes for the other ancillary sectors. India textile industry currently
generates employment to more than 35 million people. It is also estimated that, the
industry will generate 12 million new jobs by the year 2010.
Various Categories
Indian textile industry can be divided into several segments, some of which can be listed
as below:
• Cotton Textiles
• Silk Textiles
• Woolen Textiles
• Readymade Garments
• Hand-crafted Textiles
• Jute and Coir
The Industry
India textile industry is one of the leading in the world. Currently it is estimated to be
around US$ 52 billion and is also projected to be around US$ 115 billion by the year
2012. The current domestic market of textile in India is expected to be increased to US$
60 billion by 2012 from the current US$ 34.6 billion. The textile export of the country
was around US$ 19.14 billion in 2006-07, which saw a stiff rise to reach US$ 22.13 in
2007-08. The share of exports is also expected to increase from 4% to 7% within 2012.
Following are area, production and productivity of cotton in India during the last six
decades:
Area in lakh Production in lakh bales of 170 Yield kgs per
Year
hectares kgs hectare
Though during the year 2008-09, the industry had to face adverse agro-climatic
conditions, it succeeded in producing 290 lakh bales of cotton comparing to 315 lakh
bales last year, yet managed to retain its position as world's second highest cotton
producer.
Strengths
Weaknesses
• Increased global competition in the post 2005 trade regime under WTO
• Imports of cheap textiles from other Asian neighbors
• Use of outdated manufacturing technology
• Poor supply chain management
• Huge unorganized and decentralized sector
• High production cost with respect to other Asian competitors
Year Quantity (in lakh bales of 170 kgs) Value (in Rs./Crores)
Further, this policy also aims at increasing the foreign exchange earnings to the tune of
US $ 50 billion by the end of the year 2010. It includes rational projections for the overall
development and promotion of all the sectors involved directly or indirectly with the
Indian textile industry. Furthermore, this policy also envisages the inclusion of the huge
unorganized and decentralized Indian textile sector under the organized textile industry.
This is because the unorganized textile manufacturing sector in India accounts for 76% of
the total textile production.
The globalization of the Indian textile sector was the cumulative effect of the following
factors -
• Man-made Fiber
• Filament Yarn Industry
• Cotton Textile Industry
• Jute Industry
• Silk and Silk Textile Industry
• Wool & Woolen Industry
• Power loom Sector
The overall growth of the Indian textile industry can be attributed to the globalization.
Today, the Indian textile industry employs around 35 million personnel directly and it
accounts for 21% of the total employment generated in the economy. Globalization of the
Indian textile industry has also facilitated introduction of modern and efficient
manufacturing machineries and techniques in the Indian textile sector. Thus, much of
India's economic growth is largely dependent on textile manufacturing and exports.
In the past one year, there has been a massive upsurge in the textile industry of India. The
industry size has expanded from USD 37 billion in 2004-05 to USD 49 billion in 2006-
07. During this era, the local market witnessed a growth of USD 7 billion, that is, from
USD 23 billion to USD 30 billion. The export market increased from USD 14 billion to
USD 19 billion in the same period.
The textile industry is one of the leading sectors in the Indian economy as it contributes
nearly 14 percent to the total industrial production. The textile industry in India is
claimed to be the biggest revenue earners in terms of foreign exchange among all other
industrial sectors in India. This industry provides direct employment to around 35 million
people, which has made it one of the most advantageous industrial sectors in the country.
Some of the important benefits offered by the Indian textile industry are as follows:
The Role of Textile Industry in India GDP had been undergoing a moderate increase till
the year 2004 to 2005. But ever since, 2005-06, Indian textiles industry has been
witnessing a robust growth and reached almost USD 17 billion during the same period
from USD 14 billion in 2004-05. At present, Indian textile industry holds 3.5 to 4 percent
share in the total textile production across the globe and 3 percent share in the export
production of clothing. The growth in textile production is predicted to touch USD 19.62
billion during 2006-07. USA is known to be the largest purchaser of Indian textiles.
Following are the statistics calculated as per the contribution of the sectors in Textile
industry in India GDP:
• India holds 22 percent share in the textile market in Europe and 43 percent share
in the apparel market of the country. USA holds 10 percent and 32.6 percent
shares in Indian textiles and apparel.
• Few other global countries apart from USA and Europe, where India has a marked
presence include UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and
Japan
• Ready made garments accounts for 45 percent share holding in the total textile
exports and 8.2 percent in export production of India
• Export production of carpets has witnessed a major growth of 42.23 percent,
which apparently stands at USD 654.32 million during 2004-05 to USD 930.69
million in the year 2006-07. India holds 36 percent share in the global textile
market as has been estimated during April-October 2007
• The technical textiles market in India is assumed to touch USD 10.63 billion by
2007-08 from USD 5.09 billion during 2005-06, which is approximately double.
It is also assumed to touch USD 19.76 billion by the year 2014-15
• By 2010, India is expected to double its share in the international technical textile
market
• The entire sector of technical textiles is estimated to reach USD 29 billion during
2005-2010
The Role of Textile Industry in India GDP also includes a hike in the investment flow
both in the domestic market and the export production of textiles. The investment range
in the Indian textile industry has increased from USD 2.94 billion to USD 7.85 billion
within three years, from 2004 to 2007. It has been assumed that by the year 2012, the
investment ratio in textile industry is most likely to touch USD 38.14 billion.
In the future, India has good scope of becoming the global textile and apparel sourcing
center. The Indian textiles sourcing market is expected to grow at the rate of 12% per
year. The market value is US$ 22-25 billion which is expected to grow to US$ 35-37
billion by the year 2011.
• Foreign Direct Investments (FDI) up to 100% is allowed in this sector through the
automatic route by the Reserve Bank of India
• In order to provide quality cotton raw materials at reasonable price to the
manufacturers, the Technology Mission on Cotton was launched
• In order to facilitate the technological advancement in the textile industry, the
Technology Upgradation Fund Scheme (TUFS) was set up.
• The Scheme for Integrated Textile Park (SITP) is set up to provide world standard
infrastructure facilities
• The reservations for the small scaled units in textiles were abolished