competitiveness of indian textile industry
TRANSCRIPT
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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!