Textile Industy

8/6/2019 Textile Industy

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SEMINAR REPORTON

TEXTILE INDUSTRY

Presented By:

GeetaRaghav

MBA-3rd sem


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ABOUT TEXTILE INDUSTRY

Textile Industry is one of the largest and oldestindustries in India. Textile Industry in India stands atunique place and has maintained a sustainablegrowth over the years. This is a self-reliant andindependent industry and has great diversification

and versatility. Textile Industry in India provides great contribution for

the development of economy. It is the second largesttextile industry in the world after China. It is a LargestGross and Net foreign exchange earner.

After agriculture this industry provides employment tomaximum number of people in India employing 35million people. Textile Industry contributes around 4%of GDP, 9% of excise collections, 18% of employmentin industrial sector, and has 16 % share in countrys

export. Indian Textile Industry is valued at US $ 36 bn.


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INDIAN TEXTILE INDUSTRY


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o

Indian Textile Industry plays vital role in country'seconomic development and contributes 14% toindustrial production in the country. Indian textile

traditions are reputed all over the world and admiredfor their beauty, texture and durability. The origin ofIndian textiles can be traced to the Indus valleycivilization. The people of this civilization usedhomespun cotton for weaving their garments. Indiahad numerous trade links with the outside world.

The development of Indian Textile industry startedin 1985.India earns about 27% of its total foreignexchange through textile exports. In the year 2000,National Textile Policy was announced. In


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TEXTILE PRODUCTS

Applique Work India

Baluchari Tradition

Banarasi Sari

Bandhej

Batik Printing

Indian Saree

Bangal Handlooms Block Walls

Block Impressions

Brocade Silk


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Contd

Gujarat Textiles Embrodiery Gujarat India HandloomsJaipuri Quilt Magic weavers Paithani Sari Panipat Handloom Block Printings Fantasies In Gold


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SEGMENTS OF INDIAN TEXTILEINDUSTRY


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VARIOUS CATAGORIES IN TEXTILEINDUSTRY:

Cotton Textiles

Silk Textiles

Woolen Textiles

Readymade GarmentsHand-crafted Textiles

Jute


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CURRENT FACTS ON INDIAN TEXTILEINDUSTRY

India retained its position as worlds secondhighest cotton producer.

Acreage under cotton reduced about 1%during 2008-09.

The productivity of cotton which was growingup over the years has decreased in 2008-09.

Significant increase of Minimum SupportPrices (MSPs).

Cotton exports couldn't pick up owing toinequality in domestic and internationalcotton prices.

Imports of cotton were limited to shortage insupply of Extra Long staple cottons.


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STRUCTURE OF TEXTILE INDUSTRY

The Indian Textile industry is highly fragmentedsector.

Industry is fully vertically integrated across thewhole value chain and interconnected withvarious operations.

Textile Industry comprises small-scale, medium-scale, large-scale, non-integrated, spinning,weaving, finishing, and apparel-making firms andenterprises.

This is an unorganized sector and includesHandlooms, Powerloom, Hosiery, Knitting,

Readymade Garments, Khadi, Carpet andHandicrafts manufacturing units.

The organized Mill Sector comprises of spinningMills, and Composite Mills where spinning,weaving, and processing activities are done.


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CONTD

The Fibre and Yarn Sector of the textile industryincludes Textile Fibers, Natural Fibers such asCotton, Jute, Silk and Wool; Synthetic / Man-Made fibers such as Polyester, Viscose, Nylon,Acrylic and Polypropylene.

The Man-Made Textile Sector includes Fibre andFilament Yarn manufacturing units of Cellulosicand Non-Cellulosic origin. The CellulosicFibre/yarn Industry is controlled by the Ministryof Textiles, and the Non-Cellulosic Industry is

controlled by the Ministry of Chemicals andFertilizers. India is the largest producer of Jute, the 2nd

largest producer of Silk, the 3rd largest producerof Cotton and Cellulosic Fibre/Yarn and 5th

largest producer of Synthetic Fibers/Yarn


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DISTRIBUTION CHANNEL

In Indian Textile Industry products are distributedmainly through following intermediaries as a part of

Distribution Network:

Importers.

Indenting Agents Distributors.

Wholesalers.

Retailers.

Dealers

Commission Agent


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TRADE POLICIES:

Tariff policy India & US have reached on an Agreement for reciprocal

market access commitments for Textiles and Apparelwith the negotiation of the WTO.Agreement on Textile &Clothing. It provides elimination of Quota system ofTextiles & Apparel from 1st January 2005.

Under Indo-US Agreement of 1st January 1995, Indiaagreed to reduce tariffs on Textile & apparel and removeall the restrictions on these products.

From 1st April 2000, Govt. Of India reduced tariffs on: .Manmade Fibers & Filament Yarns from 35% to 20% Cotton Yarn from 25% to 20% Spun, Blended, andWoolen Yarn from 40% to 20 %

India agreed to bind its tariffs on 265 textile & apparelproducts (Textured Yarns of Nylon & Polyester, FilamentFabrics, Sportswear, and Home Textiles.)

Apparel products are free from Excise Duties & variousTaxes.


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Import Licensing: India has liberalized its Import regime for

Textiles and apparel, but some of the part isstill limited for market access. Currently,there is no import restriction for yarns &fabrics items. Apparel & Made-up textilesgoods require a Special Import License (SIL).Govt. revised Exim Policy on 31st March1999 by eliminating Import LicensingRequirements for 894 consumer goods,agriculture products and textiles. On 28thDecember 1999 India and Us signed anAgreement for the elimination of importrestrictions of 1,429 agriculture, textiles,consumer goods and apparel. India removedrestrictions on 715 tariff items as of 1st April2000.


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Custom Procedures:

Marking, Labeling, and Packaging Requirements:Marking, Labeling, and Packaging Requirementsfor Textile products are technically complex anddifficult to implement. According to textileregulation passed on 22nd july 1998 by GOI,

Yarns, and Fabrics to have the statutorymarkings and these markings should not misleadthe consumers. For instance, Cloths must beremarked with the name & address ofmanufacturer, a description of cloth, sortnumber, length in meters and width incentimeters, and washing instructions. The Manmade fiber cloth must indicate whether it is

made by spun or filament yarn. The month &year of packaging, the exact composition ofcloth. The Marking must appear on the face plaitof each piece of cloth. The language for markingmust be in Hindi and English with internationalnumerals.


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EXIM Policies: Duty Entitlement Passbook Scheme: DEPS is available for Indian

Export Companies and Traders on a Pre-Export and Post-Export basis.Pre-Export credit requires the beneficiary firm has exported during thepreceding 3-year period. The Post-Export credit is a transferable creditthat exporters of finished goods can use to pay or offset custom dutieson imports of any unrestricted goods.

Export Promotion Capital Goods Scheme: This scheme is available toexport companies and traders who provide the GOI with informationabout which type of goods and what value of Capital Goods they willimport. And they also inform what will be the outcome of export theyexpect to produce from those imports. Depending upon the exportcommitment GOI provides them a license to import capital goods duty-free or preferential rates of duty.

Pre and Post Shipment Financing: The Reserve Bank of India providesIndian Exporters Pre-Shipment Financing through commercial banks forpurchasing raw materials and packaging materials by presenting Letterof Credit. RBI also0 provides Post-Shipment Financing throughcommercial banks at preferential rates by presenting exportdocuments.

Export and Special Economic Zones: Govt. of India has establishedExport Processing Zones (EPZs) and Special Economic Zones (SEZs). In

EPZs units can import goods free of custom duty. There is 5-year taxholiday to any industrial unit in EPZs. Govt. has allowed 100% Fore3ignownership of units under EPZs and SEZs. The Govt. considers SEZs asforeign territory for trade and tariff purpose. Units under SEZs mayengage in Manufacturing, Trading and Services. Units are exempt fromroutine checking of exports by customs, and they can sell in thedomestic market on payment of duty as applicable to imported goods.

Duty Drawback Scheme: The basic objective of this scheme is to reducethe indirect taxes on exports. Exporters can get refund of the excise

and import duty. Through this scheme they can be more competitiveand have more potential market


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SWOT ANALYSIS OF TEXTILE

INDUSTRY:


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STRENGTHS:o Abundant Raw Material availability that helps industry to

control costs and reduces the lead-time across the operation. Availability of Low Cost and Skilled Manpower provides

competitive advantage to industry. Availability of large varieties of cotton fiber and has a fast

growing synthetic fiber industry. India has great advantage in Spinning Sector and has a presence

in all process of operation and value chain. India is one of the largest exporters of Yarn in international

market and contributes around 25% share of the global tradein Cotton Yarn.

The Apparel Industry is one of largest foreign revenue contributor

and holds 12% of the countrys total export. Industry has large and diversified segments that provide wide

variety of products. Growing Economy and Potential Domestic and International

Market. Industry has Manufacturing Flexibility that helps to increase the

productivity. Flexibility in production of small order lots.


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WEAKNESSES:

Indian Textile Industry is highly FragmentedIndustry.

Industry is highly dependent on Cotton. Lower Productivity in various segments.There is Declining in Mill Segment. Lack of Technological Development that affect the

productivity and other activities in whole valuechain.

Infrastructural Bottlenecks and Efficiency such as,Transaction Time at Ports and transportation

Time. Unfavorable labor Laws. Lack of Trade Membership, which restrict to tap

other potential market. Lacking to generate Economies of Scale.

Higher Indirect Taxes, Power and Interest Rates.


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OPPURTUNUTIES:

Growth rate of Domestic Textile Industry is 6-8% perannum.

Large, Potential Domestic and International Market. Understanding buyers need because of language

advantage.

Elimination of Quota Restriction leads to greater MarketDevelopment.

Market is gradually shifting towards BrandedReadymade Garment.

Increased Disposable Income and Purchasing Power of

Indian Customer opens New Market Development. Emerging Retail Industry and Malls provide huge

opportunities for the Apparel, Handicraft and othersegments of the industry.

Greater Investment and FDI opportunities are available.


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THREATS:

Competition from other developing countries,especially China.

Continuous Quality Improvement is need of thehour as there are different demand patterns allover the world.

Elimination of Quota system will lead tofluctuations in Export Demand.

Threat for Traditional Market for Powerloom andHandloom Products and forcing them for productdiversification.

Geographical Disadvantages. International labour and Environmental Laws.To balance the demand and supply.To make balance between price and quality.


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MAJOR PLAYERS OF TEXTILE INDUSTRY:

Following are some major players in the vastfield of Indian Textile Industry.

Arvind Mills

RaymondsReliance Textiles

Bombay Dyeing

Linear Design Private Limited


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ARVIND MILLS

Arvind Mills is one of the major and fullyvertically integrated composite mills player inIndia. It has large production in denim, shirtingand knitted garments. It is now adding value

by manufacturing denim apparel. Its sales arearound US$ 300 million.


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RAYMONDS

Raymonds has the large, diversifiedintegrated business model, which is spreadacross the value chain from yarn to retail. It isspecialized in Diversified woolen textiles. It

already supplies to some US retailers. It alsolooking to also expanding denim capacity andto become second largest denim player inIndia. Its presence in retail will be big positivein future. Its annual sales are around US$ 300

millions


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RELIANCE TEXTILES

Reliance Textiles is one of the major TextileCompany that is in business of fully integratedmanmade fiber. It has capacity of more than 6million tones per year. It has joint venture

partners like, DuPont, Stone & Webster, Sinco(Italy) etc.


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LINEAR DESIGN PVT.LTD

Linear Design Pvt. Ltd. is a textiles tradinghouse covering the entire gamut from yarnsand fabrics to readymade garments.We are currently facilitating both national &

international trade for a range of products andspecifications.Since our inception in 1988 we havedeveloped an extensive network of customersand suppliers in more than 25 countries.

A strong & experienced team ensures thatyour requirements are sourced at competitiverates with adherence to quality and timelines.


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BOMBAY DYEING

Bombay Dyeing is one of Indias largestproducers of textiles. The company is one ofthe largest and oldest textile companies in thecountry. It manufactures cotton and blended

textiles. Product mix comprises suitings,shirtings, sarees, towels and bed linen. Thecompany was formed on 23 August 1879 byNowrosjee Wadia, a dye works near Mahim.

This was the mill, which first started dyeing ofyarn in India. Bombay Dyeing Mfg. Co. Ltd.wasset up in 1895. Nowrosjee Wadia & Sonsbecome the managing agents in 1898

Textile Industy

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