Introduction to Textile Industry in India free essay sample

The term Textile is a Latin word originated from the word texere which means to weave. Textile refers to a flexible material comprising of a network of natural or artificial fibers, known as yarn. Textiles are formed by weaving, knitting, crocheting, knotting and pressing fibers together. History of Textile The history of textile is almost as old as that of human civilization and as time moves on the history of textile has further enriched itself. In the 6th and 7th century BC, the oldest recorded indication of using fiber comes with the invention of flax and wool fabric at the excavation of Swiss lake inhabitants. In India the culture of silk was introduced in 400AD, while spinning of cotton traces back to 3000BC. In China, the discovery and consequent development of sericulture and spin silk methods got initiated at 2640 BC while in Egypt the art of spinning linen and weaving developed in 3400 BC. The discovery of machines and their widespread application in processing natural fibers was a direct outcome of the industrial revolution of the 18th and 19th centuries. The discoveries of various synthetic fibers like nylon created a wider market for textile products and gradually led to the invention of new and improved sources of natural fiber. The development of transportation and communication facilities facilitated the path of transaction of localized skills and textile art among various countries. Textile History of Various Countries: India Indian textile enjoys a rich heritage and the origin of textiles in India traces back to the Indus valley Civilization where people used homespun cotton for weaving their clothes. Rigveda, the earliest of the Veda contains the literary information about textiles and it refers to weaving. Ramayana and Mahabharata, the eminent Indian epics depict the existence of wide variety of fabrics in ancient India. These epics refer both to rich and stylized garment worn by the aristocrats and ordinary simple clothes worn by the common people. The contemporary Indian textile not only reflects the splendid past but also cater to the requirements of the modern times. The archaeological surveys and studies have found that the people of Harappan civilization knew weaving and the spinning of cotton four thousand years ago. Reference to weaving and spinning materials is found in the Vedic Literature also. There was textile trade in India during the early centuries. A block printed and resist-dyed fabrics, whose origin is from Gujarat is found in tombs of Fostat, Egypt. This proves that Indian export of cotton textiles to the Egypt or the Nile Civilization in medieval times were to a large extent. Large quantity of north Indian silk was traded through the silk route in China to the western countries. The Indian silk was often exchanged with the western countries for their spices in the barter system. During the late 17th and 18th century there were large export of the Indian cotton to the western countries to meet the need of the European industries during industrial revolution. Consequently there was development of nationalist movement like the famous Swadeshi movement which was headed by the Aurobindo Ghosh. There was also export of Indian silk, Muslin cloth of Bengal, Bihar and Orissa to other countries by the East Indian Company. Bhilwara is known as textile city. Japan In 1869 the capital of Japan was shifted from Kyoto to Tokyo and from this time onwards the Nishijin weaving tradition seemed threatened with extinction. The industry again started to grow along with Japans new capitalist economy by 1890 when the Nishijin weavers embraced and applied modern technology to their own ancient and original textile art. The textile art of Japan particularly reached an epitome of excellence by exhibiting a cultural distinction and remarkable artistic skill in the Edo and succeeding Meiji periods (1868 1912). China Chinese textiles enjoy an excellent heritage in textile sector and occupy a prominent position in the global textile market. Chinese textiles are world famous and extraordinary for their fine quality and profound symbolic meanings. Textiles in china often form an integral aspect of its heritage and symbolically reflect its tradition and culture. In China, textile is often closely associated with prosperity and involved in the process of elaborate rituals. Parents spontaneous love for their children is most visibly reflected through the excellent clothes they provide on festive occasions to their children. These clothes are made up of expensive materials and excellent craftsmanship. Africa In the ancient times the most important aspect of textiles or more precisely cloth in Africa was that cloth was used as form of money. The width of cloth strip was usually standardized in each region of Africa and therefore there used to be a regular number of such standard length cloth strips required to make a womans wrapper cloth. This would then be used to serve as the unit of value. Cloth was a convenient form of money primarily because it was used by everybody, fairly durable and easily sub dividable. The weavers, dyers and other textile artists of Africa together makes an active contribution in creating exquisite and amazing range of textiles. African textiles usually embody a great variety of styles. Adinkara, kente and bogolan are some of the some of the African textiles which are becoming increasingly popular while some others like Yoruba, ase-oke and adire are equally beautiful but less well known. 1. 2 Introduction The textile industry or apparel industry is primarily concerned with the production of yarn, and cloth and the subsequent design or manufacture of clothing and their distribution. The raw material may be natural or synthetic using products of the chemical industry. Cotton Manufacturing: Cotton is the worlds most important natural fiber. In the year 2007, the global yield was 25 million tons from 35 million hectares cultivated in more than 50 countries. There are five stages Cultivating and Harvesting Preparatory Processes Spinning- giving yarn Weaving- giving fabrics Finishing- giving textiles Synthetic Fiber: Artificial fibers can be made by extruding a polymer, through a spinneret into a medium where it hardens. Wet spinning (rayon) uses a coagulating medium. In dry spinning (acetate and triacetate), the polymer is contained in a solvent that evaporates in the heated exit chamber. In melt spinning (nylons and polyesters) the extruded polymer is cooled in gas or air and then sets. All these fibers will be of great length, often kilometers long. Artificial fibers can be processed as long fibers or batched and cut so they can be processed like a natural fiber. Natural Fibers: Natural fibers are either from animals (sheep, goat, rabbit, and silk-worm) mineral (asbestos) or from plants (cotton, flax, sisal). These vegetable fibers can come from the seed (cotton), the stem (known as best fibers: flax, Hemp, Jute) or the leaf (sisal). Without exception, many processes are needed before a clean even staple is obtained- each with a specific name. With the exception of silk, each of these fibers is short being only centimeters in length, and each has a rough surface that enables it to bond with similar staples. 1. 2. 1 Textile Industry in India The Textile industry in India traditionally, after agriculture, is the only industry that has generated huge employment for both skilled and unskilled labor in textiles. The textile industry continues to be the second largest employment generating sector in India. It offers direct employment to over 35 million in the country. The share of textiles in total exports was 11. 04% during April–July 2010, as per the Ministry of Textiles. During 2009-2010, Indian textiles industry was pegged at US$55 billion, 64% of which services domestic demand. In 2010, there were 2,500 textile weaving factories and 4,135 textile finishing factories in all of India. According to Kearney’s ‘Retail Apparel Index’ India ranked as the fourth most promising market for apparel retailers in 2009. The Indian Textile Industry counts among the leading textile industries in the world. Apart from providing the basic necessities of life, its role in the country’s economic growth is significant. India’s textile industry contributes about 14 per cent to industrial production; 4 per cent to the country’s gross domestic product (GDP); 17 per cent to its export earnings; and is a source of direct employment for over 35 million people, which makes it the second largest provider of employment after agriculture. Abundant raw materials, healthy foreign direct investments (FDI) and a government willing to invest ensures a bright future for India’s textile sector. There is large scope of improvement in the textile industry of India as there is a huge increase in personal disposable income among the Indians after the 1991 liberalization. There is also a large growth of the organized sector in the Indian textile industries. The foreign brands along with the collaboration of the Indian companies established business in India. Some of these are Puma, Armani, Benetton, Esprit, Levi Strauss, Hugo Boss, Liz Claiborne, Crocs etc. The major Indian Industries include Bombay Dyeing, Fabindia, Grasim Industries, JCT Limited, Lakshmi Machine Works, Lakshmi Mills and Mysore Silk Factory. Textile Organizations The Indian Textile industries are mainly dominated by some government, semi government and private institutions. The major functions of the Ministry of Textile are: Textile Policy Coordination Man-made Fiber Industry Cotton Textile Industry Jute Industry Silk and sericulture Industry Wool Industry Decentralized Powerloom Sector Export Promotion Planning Economic Analysis Finance Matters Information Technology(IT) The advisory boards include: All India Handlooms Board All India Handicrafts Board All India Power looms Board Advisory Committee under Handlooms Reservation of Articles for Production Co-ordination Council of Textiles Research Association MM cotton industry The major export promoting councils include: Apparel Export Promotion Council, New Delhi Carpet Export Promotion Council, New Delhi Cotton Textiles Export Promotion Council, Mumbai The major PSU or Public Sector Undertaking are: National Textile Corporation Ltd. (NTC) British India Corporation Ltd. (BIC) Cotton Corporation of India Ltd. (CCI) Jute Corporation of India Ltd. (JCI) National Jute Manufacturers Corporation (NJMC) Handicrafts and Handlooms Export Corporation (HHEC) National Handloom Development Corporation (NHDC) Export Promotion Council for Handicrafts, New Delhi Handloom Export Promotion Council, Chennai Indian Silk Export Promotion Council, Mumbai Power loom Development Export Promotion Council, Mumbai Synthetic Rayon Textiles Export Promotion Council, Mumbai Wool Woolen Export Promotion Council, New Delhi Other autonomous bodies in this industry are: Central Wool Development Board, Jodhpur National Institute of Fashion Technology, New Delhi National Centre for Jute Diversification The textile Research Associations are: South India Textiles Research Association (SITRA), Coimbatore Ahmedabad Textiles Industry’s Research Association Bombay Textiles Research Association, Mumbai Indian Jute Industries Research association, Kolkata Man-made Textiles Research Association, Surat Synthetic and art silk –Mills Research Association, Mumbai Wool Research Association, Thane Northern India Textiles Research Association, Ghaziabad Ministry of Textile The Ministry of Textiles is responsible for the formulation of policy, planning, development, export promotion and regulation of the textile industry in India. This includes all natural, artificial, and cellulosic fibers that go into the making of textiles, clothing and Handicrafts. Current Minister of Textiles is Kavuru Samba Siva Rao, while Minister of State at the ministry is Panabaka Lakshmi. Some of initiatives taken by the government to further promote the industry are as under: †¢The Government of India plans to set up a Rs 100 crore (US$ 15. 79 million) venture capital fund to provide equity support to start-ups in the textile sector, in order to encourage innovative ideas †¢The Government has allowed 100 per cent FDI in the sector through the automatic route. In the 12thFive Year Plan (2012–17), the government plans to spend US$ 9. 1 billion on textiles as against US$ 4 billion in the 11th Plan †¢In order to make textile processing units more environment-friendly and globally competitive, the Cabinet Committee on Economic Affairs (CCEA) has approved an Integrated Processing Development Scheme (IPDS) with an investment of Rs 500 crore (US$ 78. 94 million) †¢Under the Technology Upgradation Fund Scheme (TUFS), the cotton textile industry of India will receive margin money from the Ministry of Finance. The industry is also expected to attract Rs 4,000 crore (US$ 631. 65 million) in the form of investments over the next six months †¢The Government of India has allotted Rs 700 crore (US$ 110. 53 million) in the next Five Year Plan for the development of technical textiles. In 2012–13, the technical textiles industry reached Rs 7. 48 trillion (US$ 118. 19 billion) at an annual growth rate of 3. 5 per cent †¢In the new textile policy, the Government of Gujarat has announced 5 per cent interest subsidy on bank loans for five years, for those who establish new plants for value addition chain like ginning, processing, weaving, knitting, and machine carpeting. 1. 3 Current Scenario India is the second largest producer of fibre in the world and the major fibre produced is cotton. Other fibres produced in India include silk, jute, wool, and man-made fibers. 60% of the Indian textile Industry is cotton based. The strong domestic demand and the revival of the Economic markets by 2009 have led to huge growth of the Indian textile industry. In December 2010, the domestic cotton price was up by 50% as compared to the December 2009 prices. The causes behind high cotton price are due to the floods in Pakistan and China. India projected a high production of textile (325 lakh bales for 2010 -11). There has been increase in Indias share of global textile trading to seven percent in five years. The rising prices are the major concern of the domestic producers of the country. Man Made Fibers: These include manufacturing of clothes using fiber or filament synthetic yarns. It is produced in the large power loom factories. They account for the largest sector of the textile production in India. This sector has a share of 62% of the Indias total production and provides employment to about 4. 8 million people. The Cotton Sector: It is the second most developed sector in the Indian Textile industries. It provides employment to huge amount of people but its productions and employment is seasonal depending upon the seasonal nature of the production. The Handloom Sector: It is well developed and is mainly dependent on the SHGs for their funds. Its market share is 13%. of the total cloth produced in India. The Woolen Sector: India is the 7th largest producer of the wool in the world. India also produces 1. 8% of the worlds total wool. The Jute Sector: The jute or the golden fiber in India is mainly produced in the Eastern states of India like Assam and West Bengal. India is the largest producer of jute in the world. The Sericulture and Silk Sector: India is the 2nd largest producer of silk in the world. India produces 18% of the worlds total silk. Mulberry, Eri, Tasar, and Muga are the main types of silk produced in the country. It is a labor-intensive sector. 1. 3. 1 Market Size The industry is expected to touch US$ 220 billion by 2020, according to estimates by Alok Industries Ltd. Also, India has the capacity to improve its textile and apparel share in the world trade from the current 4. 5 per cent to 8 per cent and reach US$ 80 billion by 2020. Garment exports from India grew by 19 per in the period July 2012–July 2013 to touch US$ 1. 27 billion, on the back of increasing demand in developed economies such as the US, according to data released by the Apparel Export Promotion Council (AEPC). India has the advantage of abundant resources of raw materials. It is one of the largest producers of cotton yarn in the world and there are good resources of fibres such as polyester, silk, viscose, etc. The country is also home to a wide range of cotton fibre and has a rapidly developing synthetic fibre industry. The most significant change in the Indian textile industry has been the advent of man-made fibres (MMF). India’s innovative range of MMF textiles finds presence in almost all the countries across the globe. MMF production recorded an increase of 7 per cent in the month of August 2013 and grew by 4 per cent during April–August 2013. Cotton yarn production increased by about 10 per cent during August 2013 and by about 11 per cent during April–August 2013. Blended and 100 per cent non-cotton yarn production increased by 5 per cent during August 2013 and by 8 per cent during April–August 2013. Cloth production by mill sector registered a growth of 4 per cent during August 2013 and 10 per cent during April–August 2013. Cloth production by handloom and hosiery increased by 3 per cent and 12 per cent during April–August 2013. The total cloth production grew by 6 per cent during August 2013 and by 3 per cent during April–August 2013. 1. 3. 2 FDI in Textile Indian textile and apparel industry is one of the largest in the world with US$ 19 billion of export and US$ 30 billion of domestic textile and apparel during 2006-07 (P). The industry has, over the years, contributed significantly to national output, employment and exports. At present, industry accounts for about 14% of our total industrial production and contributes to nearly 15% of total exports. It provides direct employment to about 35 million people and another 56 million are engaged in allied activities. The textile export has registered a growth of 10 percent to 19. 24 billion during 2006-07 (P) from US$ 17. 85 billion during 2005-06. The Industry has a potential to reach a size of US$ 85 billion by 2010. With its consistent growth performance and abundant cheap skilled manpower, there are enormous opportunities both for domestic and foreign investors to make investments in textile sector in India. India has most liberal and transparent policies in Foreign Direct Investment (FDI) amongst emerging countries. India is a promising destination for FDI in the textile sector. 100% FDI is allowed in the textile sector under the automatic route. FDI in sectors to the extent permitted under automatic route does not require any prior approval either by the Government of India or Reserve Bank of India (RBI). The investors are only required to notify the Regional Office concerned of RBI within 30 days of receipt of inword remittance. Ministry of Textiles has set up FDI Cell to attract FDI in the textile sector in the country. The FDI cell will operate with the following objectives: 1) To provide assistance and advisory support (including liaison with other organizations and State Governments); 2) Assist foreign companies in finding out joint venture partners; 3) To sort out operational problems; 4) Maintenance and monitoring of data pertaining to domestic textile production and foreign investment. Inflow of FDI as Percentage of total FDI in India from 2007 to 2013. 1. 3. 3 Investments Investment is the key for Indian textiles to make rapid strides. The industry (including dyed and printed) attracted FDI worth Rs 5,883. 71 crore (US$ 928. 63 million) in the period April 2000–August 2013. Some of the major investments in the Indian Textile Industry are as follows: Trident Ltd plans to invest Rs 1,667 crore (US$ 263. 24 million) to install 176,000 spindles and 500 looms to manufacture around 40,000 TPA of additional cotton yarn of higher count Exhilway, a US-based private equity firm, will fund a Kolkata-headquartered garments retail start-up firm Sconto Retail Pvt Ltd. The initial investment will only be in equity of around Rs 6 crore (US$ 947,490. 36), with the graded funding, both in equity and debt, likely to go up to Rs 24 crore (US$ 3. 79 million) by the first 18 months The DyStar Group and Arvind Ltd have signed an agreement for joint development in the field of denim. Dedicated teams from DyStar and Arvinds Denim Division will work closely to implement new technologies in indigo dyeing and finishing as well as develop new products, processes and effects for denim fabrics and garments Gitanjali Group has entered into the apparels segment as part of its brand extension of its popular brands and plans to set up 300 selling points across the country in 2013 Swedish retailer Rusta plans to import Indian textiles and handicraft worth Rs 200 crore (US$ 31. 58 million) annually over the next 3-4 years 1. 4 Textile Statistics Cluster Wise Split up Details of Mega Clusters are: Handloom Sector Handcraft Sector Powerloom Sector 1. Varanasi (U. P). 7. Moradabad (U. P. ) 12. Bhiwandi (Maharastra). 2. Sivsagar (Assam). 8. Narasapur (A. P. ). 13. Erode (Tamil Nadu). 3. Murshidabad (W. B. ). 9. Bhdohi-Mirzapur (U. P. ). 14. Bhilwara (Rajasthan). 4. Virudhunagar (T. N)). 10. Srinagar (JK). 15. Ichalkaranji (Maharashtra) 5. Guntur PrakashamDistt. (A. P) 11. Jodhpur (Rajasthan) 6. Godda Neighboring* Distt. (Jharkhand) Details of Finance employed in Textile Industry Data is in Rs million Industrial Outlook Survey done by RBI Net Response : % : Mar 2012 to Mar 2014 Market Capitalization Year Number of companies in the Index Index market capitalisation Rs. million 1990-91 106 81,618. 90 1991-92 112 277,394. 20 1992-93 87 134,302. 00 1993-94 165 213,570. 00 1994-95 151 218,616. 40 1995-96 271 181,094. 90 1996-97 101 60,220. 30 1997-98 69 49,908. 10 1998-99 85 34,788. 10 1999-00 130 44,929. 50 2000-01 53 37,017. 30 2001-02 58 34,490. 60 2002-03 69 46,442. 90 2003-04 141 111,136. 10 2004-05 214 215,531. 00 2005-06 211 387,896. 90 2006-07 209 331,447. 50 2007-08 194 373,726. 40 2008-09 143 188,687. 60 2009-10 205 447,200. 00 2010-11 199 602,549. 30 2011-12 175 609,069. 50 2012-13 168 594,299. 80