competitiveness of indian textile industry

7/27/2019 Competitiveness of Indian Textile Industry

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Competitiveness of Indian textile

industry

Submitted by:Gautam Dubey

Roll no. 12-MBA-18


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J J Fabtex Pvt. Ltd.


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J J Fabtex

founded in 2003

specializes in all ladies, men's and Children

clothing

Major buyers: Bandolera, Lobs , Tramantona, M

& Co, Hatrstring, Notations, Gramicci, Serena lily,

Mamaqi, K.C. Parker, LTB, arvind brands

capacities to manufacture quality garments havebeen raised to: Knitted/Wovens Garments:

60,000 pieces per month.


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Indian textile industry

It contributes around 14% to industrialproduction

4% to GDP

10.6% to the countrys export earnings industrys size is estimated at US$ 55 bn

64% of the companies catering to domestic

demand textiles industry is the second-largest

employment generator after agriculture


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Indian textile industry

The textiles industry provides direct

employment to more than 35 mn people and

indirect employment to 47 mn people

generates significant employment through

forward and backward linkages

More than 70 textile and clothing clusters

account for about 80% of total production in

the country


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Basic facts about Indian textiles and

clothing (T&C) exports

Indias share in global T&C trade: 4% in textiles and 2.8% inclothing

Indias rank in world trade: 7th in textiles and 6th inclothing

Share in the countrys total exports basket: 12% Readymade garments share: nearly 50% of total textile

exports

Indias textiles products are exported to over 100 countries

Two-third of Indias textiles are exported to the US and EU

Other major export destinations include Canada, UAE,Japan, Saudi Arabia, Republic of Korea, Bangladesh andTurkey.


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Major destinations for Indias ready

made garments exports (%)


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Top-10 destinations for Indias ready

made garments exports (US$ mn)


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Major government policies/initiatives

National Textile Policy - 2000

De-reservation of the garments sector

Technology Upgradation Fund Scheme (TUFS) Scheme for Integrated Textile Parks (SITP)


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Rising sun

l i f h di il


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SWOT analysis of the Indian Textile

industry

Strengths

Various types of raw materials are available in

abundance

Government initiatives to encourage exports andupgrade technology

Low cost of labor Strong presence across the entire value chain,

from fiber to garments


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Weaknesses

Low cotton yield per hectare, high financing costand lack of adequate technology

High dependence on EU and US for exports

Highly fragmented industry with large number ofsmall size and technologically-outdated plants,lacking benefits of economies of scale

Infrastructure bottlenecks for handling hugevolumes

Lack of trained manpower and low laborproductivity due to lack of technologicaldevelopment


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Opportunities

Favorable demographics in the domestic market; increasing youngpopulation coupled with rising income levels

Emergence of retail industry as a whole and development of variousmalls provide huge opportunities for the apparel segments

Opportunities in product diversification (for e.g., Technical Textiles)

Increasing working female population with higher propensity tospend compared with home keepers

Change in consumption pattern, including rising demand for highquality premium fabrics and development of various products thatcater to global needs

Replacement of the Multi Fiber Agreement (MFA) and integration ofthe textile industry resulting in huge opportunities for exports.

Gradual development in the technical side of the industry providesan opportunity


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Threats

Increased, cost-based competition from othercountries (Bangladesh, Vietnam, and Sri Lanka)

Pricing pressures due to removal of US and EU

quotas on imports from China Fluctuations in the demand in exports due to the

elimination of quota regime

Higher borrowing cost which affects theprofitability of the small and medium firms

Rising input costs


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Primary research


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Do you think competitiveness in the

sector has increased?

Sales

yes(85%)

no(15%)


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Where do you find the raw material?

within the

country(60%)within the

state(22%)

import(18%)

D thi k lit f h


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Do you think quality of human

resources has increased in last five

years?

yes(44%)

no(44%)

no

change(12%)


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Do you think our education system

satisfies to industry needs?

yes(56%)

no(44%)


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Are labor relations productive?

yes(60)

no(40)


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Are you satisfied with infrastructure?

yes(14%)

no(86%)


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Has corruption levels increased in

govt. in last five years?

Sales

increased(69%)

decresed(6%)

remained same(25%)


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Do you find tax regime to be

complicated?

Sales

yes(95%)

no(5%)


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Do you find govt. support to be

sufficient?

Sales

yes(30%)

no(70%)


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Problems faced by the industry

Migration of labor

Corruption in govt.

Fluctuations in rupee dollar exchange rate are adverselyaffecting the export competitiveness of the sector.

delays in transit time on rail, road, sea etc., are causing tocost escalations

Cost of the basic inputs and infrastructure such as rawmaterials, power, labor, transportation etc., are moreexpensive than other countries.

High lending rates in IndiaPower outages and poor water supply.

Local competition is faced from illegal sale

suggested solutions to the problems


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suggested solutions to the problems

faced by the industry

subsidizing unit rates of power or encourage the use ofother viable options such as non conventional energysources.

immediate requirement for reduction in the transit

time and cost at the international check points Building HR resources through industry-govt.-

educational institute co-operation

there is need to work out time bound refundmechanisms from Technology Up gradation Fund

providing hedging mechanisms to industry againstcurrency fluctuations

International Exposure for Indian manufacturers


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Ensuring raw material is available in the

country at competitive prices

More R & D initiatives in textile design

Tax rates, collateral demands

Uniform tax regime


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Thank you!

competitiveness of indian textile industry

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