Indian textile industry contributes about 14% to industrial production, 4% to the country’s gross domestic product (GDP) and 16. 63% to export earnings. Nearly 40% of the textiles produced in the country is exported and the textiles sector is the biggest employment generator after agriculture. The sector is expected to generate 12 million new jobs by 2010. The sector targets US$ 6 billion foreign direct investment (FDI) by 2015 to be invested in green field units in textiles machinery, fabric and garment manufacturing, as well as technical textiles.
India has made inroads into the markets of its key competitors which include Asian countries such as Sri Lanka, Bangladesh, Vietnam and Cambodia. The Indian textile and apparel industry is taking a new course by entering the Chinese market. Most of the top global apparel retailers, such as JC Penny, Nautica, Docker and Target, have their sourcing network in India. Indian textiles and apparel exports, which is worth US$ 22 billion, is expected to register a four-fold increase to touch US$ 90 to 100 billion in the next 25 years. Government Initiatives
Government has taken the following initiatives to uplift the Textile Segment:
- The Government has announced the release of a subsidy of US$ 533. 87 million for the textile industry under the Technology Up-gradation Fund scheme (TUFs).
- The government extends 10% capital subsidy and 5% interest subsidy on installation of machineries and for processing machinery under the TUFS.
- A 41-member Working Group has also been announced to be set up with a National Fiber Policy, to ensure self-sufficiency in fiber consumption and export requirements in India.
- The Textiles Committee has also been reconstituted in order to ensure standard quality of textiles both for internal marketing as well as exports. The committee will also establish laboratories and test houses for testing of textiles.
- In addition, an online marketing and sales portal has also been launched by the textile minister. The e-marketing platform, developed by the Central Cottage Industries Corporation of India and the Handicraft and Handlooms Export Corporation of India, will host more than 1,000 wide ranging handicrafts and handlooms products.It will also provide online services, such as e-payment facility through major debit/credit card as well as online tracking of the shipment.
- Moreover, the Ministry of Textiles is considering setting up textile parks at Vidarbha and Marathwada, the largest cotton growing regions in Maharashtra. Currently seven textile parks are already in various stages of completion in Maharashtra.
Technical textiles segment is expected to employ over 300,000 additional workers increasing the total employment in the sector to 1. million by the year 2012. The Government has set up four Centres of Excellence (CoEs) for Meditech, Agrotech, Geotech and Protech group of technical textile, providing one-stop facilities for testing, human resource development and research and development. Advantage India India offers cheaper production and marketing costs and enormous opportunities that have tempted Taiwanese companies to work on joint ventures with Indian companies, especially for the manufacture of manmade fabrics.
Several European textile and textile machinery manufacturing companies have shown interest in sourcing garments from India. Textile companies were keen to set up base in India due to the cheap labour available here. India offers various incentives like low-cost labour and intellectual right protection to foreign investors. The country allows 100% FDI in the textiles sector. Investments According to the Minister for Textiles, Mr Dayanidhi Maran, around US$ 5. 14 billion of foreign investment is expected to be made in India in the textile sector over the next five years.
Indian textile companies are expanding their manufacturing facilities to industrial fabrics to tap new customers in the construction, automobiles and healthcare sectors, who are currently importing these products. Also, some of the major global luxury apparel retailers are eyeing markets like India.
The textiles and garments industry contributes 16. 63% of India’s export earnings; around 45% of this comes from garment exports alone. The garments industry provides employment to around 3. 5 million people across the country. Delhi, Mumbai, Tirupur, Bangalore and Chennai are the five major garment production hubs, producing exclusively for the exports market. Karnataka has a sizeable presence in the garments and textiles sector; many well-known multinational brands have chosen this state to set up their global sourcing centres.
Leading garment manufacturers like Tommy Hilfiger, Marks & Spencer, Gap, H&M, Matalan, Mothercare, George, etc, employ Karnataka’s largest un-organized workforce. In Bangalore alone there are 500,000 workers in the garments industry, in 1,200 factories spread across the city. The phasing out of the Multi Fibre Agreement (MFA) in 2005 was a great opportunity for small factories to increase garment production for exports. As the market became highly competitive, only factories that could produce at the lowest cost survived; many were forced to close shop.
Thus, stiff competition was inevitable among different factories in the country and also among the countries of the third world that were able to produce garments at a much lower cost than India. There were instances where India lost orders to China and Bangladesh. Just a couple of years ago, India was at second position in garment exports, after China; today it stands sixth with countries like Bangladesh and Vietnam higher up the ladder. Again, the pressure to produce at lower and lower costs is adversely impacting the worker at the lowest end of the chain.
The AEPC highlighted the conducive environment for manufacturing in the sector and raised the slogan of “come, invest, produce and sell in India”, coined by Textiles Minister, Dayanidhi Maran. The ministry has plans to take delegations to Switzerland, Italy and Istanbul followed by visits to France, Germany and the US. The aim is to tap foreign capital towards establishing green field units in textiles machinery, fabric and garment manufacturing and attracting investments in the field of technical textiles. India offers various incentives to foreign investors like low-cost labour and intellectual right protection.
The government has allowed 100% FDI in the textiles sector. India has a vertical and horizontal integrated textiles value chain, and represents a strong presence in the entire value chain from raw materials to finished goods. The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has set a target to more than double the export of man-made textile from the country. Presently, the global man-made fibre (MMF) trade accounts for 60% of total trade in textiles and India accounts for less than 3% at US$3. 41 billion. SRTEPC plans to increase exports to US$ 6. 2 billion by capturing 4% market share by 2011-12.
