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Indian Textile Industry
Indian Textile Industry
Single largest employer in the industrial sector employing over 35 million people
Cotton Textile
Man-made
Silk
Woolen
Jute
Organized Sector
Decentralized Sector
Cotton Mills
Handlooms
Power Looms
Vision
To ensure the growth of the Indian textile industry at 16 percent per annum in value terms, to US$ 115 billion, by the end of the Eleventh Five Year Plan (2007-2012)
To secure a 7 percent share in global textile trade by the end of the Eleventh Five Year Plan.
Source: planningcommission.nic
FDI in Textiles
[Source: cci.in]
Apparel Export Promotion Council (AEPC) Sponsored by Ministry of Textile Monitors Quotas and conducts trade fairs Cotton Textile Export Promotion Council Autonomous, non-profit export promotion council International face of Indian textile
Strengths
Independent and self-reliant Vertical and horizontal integrated textile value chain Globally competitive spinning industry
Low wages
Unique strength in traditional handlooms and handicrafts
Weaknesses
Highly fragmented and technology backward textile processing sector Except spinning, all other segments are predominantly in decentralized sector Rigid labour laws Infrastructural bottlenecks in terms of power, utility, road transport, port handling capacities etc. Higher taxes and interest rates
Opportunities
Large potential domestic and international market
Abundant availability of raw material Low cost Flexibility Skilled labour Ability to produce customized apparels
Dominated by unorganized sector Highly competitive and fragmented Entry of foreign players
Product development /design Cheap and abundant raw material Well developed IT capabilities Developed textile machinery industry
Large domestic potential Favourable demographics Growing income and purchasing power Growth of organized retail malls
On January 1st 1974, the Arrangement Regarding the International Trade in Textiles known as the MFA came into force. Non-Tariff Barriers Short term agreement Agreement on Textiles and Clothing (ATC)
In 1993, a study found that the price of cotton yarn per kilo was cheapest in India at US$ 2.79 In US textile and apparel imports, China and Hong Kong had higher market shares than India. The effect of trade liberalization on India :
increased output
employment increased profits
Introduced on 1999 To overcome technological obsolescence and create economies of scale Transition from quantitatively restricted textiles trade to market-driven global merchandise Crucial for all the inter-connecting sectors such as spinning, weaving, knitting, processing and garmenting
Launched to create new textile parks of international standards. Merging of APE & TCIDS Objective: to provide the industry with worldclass infrastructure .
Single currency managed by European Central Bank (12/27 members) Free movement of persons, goods, services and capital
Relations between ancient India, Greek, and Roman empires are 2000 years old. Relations between India and EU began in 1963 with EEC
EU AND INDIA
The year 2009 marked 46 years of formal relations between India and the EU. India is one of the growing economies. The EU is Indias first and largest partner.
India-EU Round Table is a significant steps towards greater mutual cooperation in all fields.
In addition to multilateral and bilateral negotiations with India, the European Commission works on a day to day basis.
To assist India in continuing its efforts to better integrate into the world economy.
EU-India trade:28.6billion in 2003 to over 55billion in 2007. EU investment to India:759million IN 2003 to 2.4billion in 2006. EU- India trade in commercial services:5.2billion in 2002 to 12.2billion in 2006 Trade in goods EU goods exports to India 2009: 27.5 billion EU goods imports from India 2009: 25.4 billion Trade in services EU services exports to India 2009: 8.6 billion EU services imports from India 2009: 7.4 billion Foreign Direct Investment EU outward investment to India 2009: 3.2 billion Indian inward investment to EU 2009: 0.4 billion EU technical and financial trade assistance to India 13.4million
EU Textile and Clothing export figures, exports have decreased by 17% with a decline of textile exports by 18% and by 16% of clothing exports.
Since July 2009 a slow stabilization of these levels can be observed and since January 2010 a recovery is observed.
According to FICCI, 71% of participating companies have said their organization perceives the EU as an important export market. Present status of doing business with central and Eastern Europe, according to industry response:Not exporting, 45%
Exporting, 55%
Plans for exporting the EU, Of the companies that are not presently exporting to the EU , 85% intent to export to this region in the near future.
According to FICCI, 71% of participating companies have said their organization perceives the EU as an important export market. Present status of doing business with central and Eastern Europe, according to industry response:Not exporting, 45%
Exporting, 55%
Plans for exporting the EU, Of the companies that are not presently exporting to the EU , 85% intent to export to this region in the near future.
There are tremendous opportunities. As per FICCI Indias trade volume with each country can easily de doubled in less than three year. Uniform trade regulations. A uniform duty structure. Common technical specification. In those countries that have joined the EU there is a big possibility of entering into joint ventures as well as outsourcing services from these countries. Good time to set up representative offices in these countries and undertake tailor-made marketing campaigns.
Invest in research and development. India needs to move from the lower-end markets. The government also needs to make policy changes like dereserving the small-scale sector. Handlooms by their very nature can adopt a strategy of niche marketing. Need for a cradle-to-grave approach. Efficiency and output of handloom and power loom sectors also needs to be increased.