Project Bhupendra

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PROJECT REPORTBatch 2009 - 2012

STRATEGICALLY ANALYSIS OF YARN &

COTTON INDUSTRY IN INDIA.

Submitted in fulfillment of Year III of BBA

From

PGRRCDE

Osmania University, Hyderabad

SUBMITTED TO: SUBMITTED BY:Mr . Jenson Sebastian Bhupendra Singh Verma

Mr./Ms._________________ En. no.:_____________

(INDUSTRY GUIDE)

Through


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I Bhupendra Singh Verma student of UEI Global Indore

(Institute) hereby declare that the Project Report entitled

submitted , is my original work and the dissertation has not

formed the basis for the award of any degree, diploma

associate ship, fellowship or similar other titles. It has not

been submitted to any other university or Institution for the

award of any degree or diploma.

Place : Indore Signature of Student

Date : Name: Bhupendra Singh Verma

En. No.:


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Acknowledgement

I would like to take this opportunity as a platform to thank various individuals,

without the support of whom, this project would not have been successful.

I would like to express my heartfelt gratitude and thanks to

________________________(Industrial Guide) for his/her guidance and support

throughout this study. I am thankful to my Institute for providing me with proper

resources and fostering my research work.I would like to take this opportunity to thank all the respondents who trusted me

and gave me their valuable insight. I also thank the Faculty Supervisors and

Industrial supervisors under whose able guidance and kind cooperation, I was

able to complete my study titled, To study the product characteristics, features,

composition of yarn, fabric garments etc.

I also thank the people from Pratibha syntax Ltd. who gave me properknowledge about the company.

My acknowledgement would not be complete without thanking Mr. Jenson

Sebastian who gave me proper guidelines, knowledge and support for my summer

training project.

I have put in my best efforts to make this project as informative and understandable

as possible. Every effort has been made to enhance the quality of work. However, I

owe the sole responsibility of the shortcomings, if any, in the study

Name & Signature of Student Date:


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Preface

The Summer Internship Program forms an important component of education at

UEI Global. It is an attempt to bridge the gap between the academic institution andthe corporate world. It provides us an opportunity to apply the concepts learnt in

real life situations.

The summer internship helps us in exploring our skills and capabilities. This

internship program makes a mark of hard work, sincerity, knowledge and ethics on

the host organization. It would also be a great learning experience since it enables

us to apply theory to practice and observe and learn the current trends in themarket.

It provides an opportunity for us to satisfy our inquisitiveness about corporate,

provides exposure to technical skills, and helps us to acquire social skills by being

in constant interaction with the professionals of other organizations.

It helps us in developing a network, which will be useful in enhancing in careerprospects. This will help to gain a deeper understanding of the work, culture,

deadlines, pressures etc. of an organization.

Thus, it helps to develop the qualities of a Manager by involving teamwork, goal

orientation and managing interpersonal relationships and by creating awareness

about strengths and weaknesses in the work environment.


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Table ContentsPAGE

Chapter One TEXTILE SECTOR IN INDIA 7-31

Chapter Two NATIONAL ECONOMIC POLICIES 32-44

Chapter Three COMPANY INTRODUCTION 45-57

Chapter Four TEXTILE INDUSTRY REVIEW 58-62

Chapter Five SWOT ANALYSIS OF INDIANTEXTILE INDUSTRY

63-72

Chapter Six A BRIEF REPORT ON INDIANTEXTILE INDUSTRIES

73-96

Chapter Seven OPPORTUNITIES 97-99

Chapter Eight ANALYSIS AND INTERPRETATIONOF DATA

100-105

Chapter Nine BIBLOGRAPHY 106-108


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Chapter I

INDIAN TEXTILE

INDUSTRY


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INDIAN TEXTILE INDUSTRY

The textile industry is the largest industry of modern India. It

accounts for over 20 percent of industrial production and is closely linked with the agricultural and rural economy. It is the single largest employer in

the industrial sector employing about 38 million people . If employment

in allied sectors like ginning, agriculture, pressing, cotton trade, jute, etc.

are added then the total employment is estimated at 93 million . The net

foreign exchange earnings in this sector are one of the highest and, together

with carpet and handicrafts, account for over 37 percent of total export

earnings at over US $ 10 billion. Textiles, 1 alone, account for about 25

percent of Indias total forex earnings.

Indias textile industry since its beginning continues to be predominantly

cotton based with about 65 percent of fabric consumption in the country

being accounted for by cotton. The industry is highly localised in

Ahmedabad and Bombay in the western part of the country though other

centers exist including Kanpur, Calcutta, Indore, Coimbatore, and Sholapur.

The structure of the textile industry is extremely complex with the modern,

sophisticated and highly mechanized mill sector on the one hand and the

hand spinning and hand weaving (handloom) sector on the other. Between

the two falls the small-scale power loom sector. The latter two are together

known as the decentralized sector. Over the years, the government hasgranted a whole range of concessions to the non-mill sector as a result of

which the share of the decentralized sector has increased considerably in


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the total production. Of the two sub-sectors of the decentralized sector, the

power loom sector has shown the faster rate of growth. In the production of

fabrics the decentralized sector accounts for roughly 94 percent while the

mill sector has a share of only 6 percent.

Being an agro-based industry the production of raw material varies from

year to year depending on weather and rainfall conditions. Accordingly the

price fluctuates too.


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INDIA'S TRADE IN TEXTILES AND ITSSHARE IN WORLD TRADE CAN BE

CATEGORIZED AS FOLLOWS: INDIAS TRADE IN TEXTILES

Type India's Share

in WorldTrade

Yarn 22%

Fabrics 3.2%

Apparel 2%

Made-ups 9%

Over-all 2.8%

Compound Annual GrowthRate (CAGR) of different

segments

Type CAGR (1993-98)

Yarn 31.79%

Fabric 9.04%

Made-ups 15.18%

Garment 6.795%


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GLOBAL SCENARIO

The textile and clothing trade is governed by the Multi-Fibre

Agreement (MFA) which came into force on January 1, 1974 replacing

short-term and long- term arrangements of the 1960s which protected US

textile producers from booming Japanese textiles exports. Later, it was

extended to other developing countries like India, Korea, Hong Kong, etc.

which had acquired a comparative advantage in textiles. Currently, India

has bilateral arrangements under MFA with USA, Canada, Australia,

countries of the European Commission, etc. Under MFA, foreign trade is

subject to relatively high tariffs and export quotas restricting Indias penetration into these markets. India was interested in the early phasing

out of these quotas in the Uruguay Round of Negotiations but this did not

happen due to the reluctance of the developed countries like the US and EC

to open up their textile markets to Third World imports because of high

labour costs. With the removal of quotas, exports of textiles have now to

cope with new challenges in the form of growing non-tariff / non-trade barriers such as growing regionalisation of trade between blocks of nations,

child labour, anti-dumping duties, etc.

Nevertheless, it must be realised that the picture is not all rosy. It is now

being admitted universally and even officially that the year 2005 AD is

likely to present more of a challenge than opportunity. If the industry does

not pay attention to the very vital needs of modernisation, quality control,

technology upgradation, etc. it is likely to be left behind. Already, its


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comparative advantage of cheap labour is being nullified by the use of

outmoded machinery.

With the dismantling of the MFA, it becomes imperative for the textile

industry to take on competitors like China, Pakistan, etc., which enjoy lower

labour costs. In fact the seriousness of the situation becomes even more

apparent when it is realised that the non-quota exports have not really risen

dramatically over the past few years. The continued dominance of yarn in

exports of cotton, synthetics, and blends, is another cause for worry while

exports of fabrics is not growing. The lack of value added products in textileexports do not augur well for India in a non-MFA world.

Textile exports alone earn almost 25 percent of foreign exchange for India

yet its share in global trade is dismal, having declined from 10.9 percent in

1955 to 3.23 percent in 1996. More significantly, the share of China in

world trade in textiles, in 1994, was 13.24 percent, up from 4.36 percent in

1980. Hong Kong, too, improved its share from 7.06 percent to 12.65

percent over the same period. Growth rate, in US$ terms, of exports of

textiles, including apparel, was over 17 percent between 1993-94 to 1995-

96. It declined to 10.5 percent in 1996-97 and to 5 percent in 1997-98.

Another disconcerting aspect that reflects the declining international

competitiveness of Indian textile industry is the surge in imports in the lasttwo years. Imports grew by 12 percent in dollar terms in 1997-98, against

an average of 5.8 percent for all imports into India. Imports from China

went up by 50 percent while those from Hong Kong jumped by 23 percent.


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GLOBAL FACTORS INFLUENCING TEXTILEINDUSTRY

The history of the textile and clothing industry has been replete with

the use of various bilateral quotas, protectionist policies, discriminatory

tariffs, etc. by the developed world against the developing countries. The

result was a highly distorted structure, which imposed hidden costs on the

export sectors of the Third World. Despite the fact that GATT was

established way back in 1947, the textile industry, till 1994, remained largely

out of its liberalisation agreements. In fact, trade in this sector, until the

Uruguay Round, evolved in the opposite direction. Consequently, since 1974global trade in the textiles and clothing sector had been governed by the

Multi-fibre agreement, which was the sequel to an increasingly pervasive

quota regime that began with the Short-term arrangement on cotton

products in 1962 and followed by the Long-Term arrangement.

After the successful conclusion of the Uruguay Round in 1994, the

MFA was replaced by the Agreement on Textiles and Clothing (ATC), which

had the same MFA framework in the context of an agreed, ten year phasing

out of all quotas by the year 2005. The section that follows takes a brief

look at the history of these protectionist regimes as also a more detailed

look at the MFA and the ATC. Multi Fibre Agreement (MFA) On

January 1st, 1974, the Arrangement Regarding the International Trade in

Textiles, otherwise known as the MFA came into force. It superseded allexisting arrangements that had been governing trade in cotton textiles since

1961.


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The MFA sought to achieve the expansion of trade, the reduction of

barriers to trade and the progressive liberalisation of world trade in textile

products, while at the same time ensuring the orderly and equitable

development of this trade and avoidance of disruptive effects in individual

markets and on individual lines of production in both importing and

exporting countries. Though it was supposed to be a short-term

arrangement to enable the adjustment of the industry to a free trade regime,

the MFA was extended in 1974, 1982, 1986, 1991, and 1992. Because of the

quotas allotted, the MFA resulted in a regular shift of production from

quota restricted countries to less restricted ones as soon as the quotas began

to cause problems for the traders in importing countries. The first threeextensions of the MFA, instead of liberalising the trade in textiles and

clothing, further intensified restrictions on imports, specifically affecting

the developing country exporters of the textile and clothing products.

Increased usage of several MFA measures tended to further erode the trust

which developing countries had originally placed in the MFA.

The MFA set the terms and conditions for governing quantitativerestrictions on textile and clothing exports of developing countries either

through negotiations or bilateral agreements or on a unilateral basis. The

bilateral agreements negotiated between importing and exporting countrys

contained provisions relating to the products traded but they differed in the

details. The restraints under the MFA were often negotiated, or unilaterally

imposed at relatively short intervals, practically annually. The quotas could

be either by function or fibreUnder the MFA, product coverage was

extended to include textiles and clothing made of wool and man-made

fibres (MMF), as well as cotton and blends thereof. With regard to

applications of safeguard measures, import restrictions could be imposed


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unilaterally in a situation of actual market disruption in the absence of a

mutually agreed situation. However, in situations involving a real risk of

market disruption only bilateral restraint agreements were possible. The

Textile Surveillance Body (TSB) was set up to monitor disputes regarding

actions taken in response to market disruptions.

The MFA permitted certain flexibility in quota restrictions for the

exporters so that they could adjust to changing market conditions, export

demands and their own capabilities. The MFA also provided for higher

quotas and liberal growth for developing countries whose exports were

already restrained. The MFA asked the participants to refrain from

restraining the trade of small suppliers under normal circumstances. In

general, developed countries, under MFA, chose not to impose restrictions

on imports from other developed countries.

The TSB ensured compliance by all parties to the obligations of

bilateral agreements or unilateral agreements. It called for notification of

all restrictive measures. A Textiles Committee established as a

management body consisting of all member countries was the final arbiter

under the MFA and worked as a court of appeal for disputes that could not

be resolved under TSB.

Unsatisfactory experience with several extension protocols of the

MFA, retention clauses, such as good will, exceptional cases, and anti -surge and other trade related factors led the developing countries to press

for the inclusion of the textile issue in the agenda of the GATT Ministerial

meeting.


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The eventual outcome of prolonged negotiations was the Agreement on

Textiles and Clothing.

Agreement on Textiles and Clothing (ATC)

The ATC calls for a progressive phasing out of all the MFA restrictions and

other discriminatory measures in a period of 10 years. In contrast to the

MFA, the ATC is applicable to all members of the WTO.


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FOUR STEPS OVER 10 YEAR

Steps Percentage of

products to be

brought under

GATT (including

removal of quotas)

How fast remaining

quota should open

up, if 1994 rate was

6%

Step 1

1st Jan 1995 31st Dec 1997

16 percent

(minimum taking

1990 imports as base)

6.96 percent

annually

Step 2

1st Jan 1998 31st Dec 2002

17 percent 8.70 percent

annually

Step 3

1st Jan 2002 31st Dec 2004

18 percent 11.05 percent

annually

Step 4

1st Jan 2005

Full integration into GATTand final elimination of quotas

, ATC terminates

49 percent

(maximum)

No quotas left


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TOP 10 EXPORTERS (TEXTILE)

Country 1990 1997

Billion US$ % share Billion US$ % shareHong Kong 7.99 7.68 14.6 9.42

China 7.10 6.82 13.83 8.92

South Korea 6.04 5.81 13.35 8.61

Germany 14.00 13.46 13.05 8.42

Italy 9.80 9.43 12.9 8.32

Taiwan 6.13 5.90 12.73 8.21

USA 5.03 4.83 9.19 5.93

France 7.21 4.65 5.86 5.64

Belgium-

Luxembourg 6.54 6.29 7.01 4.52

Japan 5.88 5.65 6.75 4.35

Total (Top

10)

74.36 71.5 110.62 71.37

World 104.00 100.00 155.00 100.00


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TOP 10 EXPORTERS (APPAREL)Country 1990 1997

Billion US$ % share Billion US$ % shareChina 9.41 9.14 31.8 21.06

Hong Kong 15.37 14.92 23.11 15.30

Italy 12.07 11.72 14.85 9.83

USA 2.57 2.49 8.68 5.75

Germany 7.82 7.59 7.29 4.83

Turkey 3.44 3.34 6.7 4.44

France 4.65 4.51 5.34 3.54

UK 3.08 2.99 5.28 3.50

South Korea 8.11 7.87 4.19 2.77

Thailand 2.86 2.78 3.77 2.50

Total (top 10) 69.38 67.36 111.01 73.52

World 103.00 100.00 151.00 100.00


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EU TOP TEN SUPPLIERS OF MFA

CLOTHING: RANK PRICE

(AGR 1994-96)

1995

Ranks and Average

Price

1996

Ranks and Average Price

Rank

Price

CAGR 1994-

96

Country Rank

in

Value

Rank

in Volume

Avg.

Price,

Ecu/Kg

Rank

in

Value

Rank in

Volume

Avg.

Price,

Ecu/Kg

China 2 1 9 1 1 8 3

Turkey 1 2 2 2 2 6 7

Hong Kong 3 3 6 3 3 5 9

Tunisia 4 7 3 4 6 3 4

Morocco 5 6 5 5 7 4 2


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Poland 6 8 2 6 8 1 8

India 7 5 7 7 5 9 10

Bangladesh 8 4 10 8 4 10 5

Romania 9 10 4 9 10 2 1

Indonesia 10 9 8 10 9 7 6


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POST-MFA / ATC SCENARIO

It is generally believed that quota phase-out can only be beneficial for the

industry. In 1993, a study of seven countries found that the price of cotton yarn per kilo, was cheapest in India at US$ 2.79, compared to US$ 3.30 in

Brazil, US$ 4.19 in Japan, and US$ 3.10 in Thailand. This was because

overall labour and raw material costs are cheaper in India.

However, it should be realised that the opposite can also happen. Removal

of quotas may open new frontiers but will also close captive markets. The

EU and the US will no longer be restrained in buying as much as they want

from the cheapest possible sources. Some argue that the ending of quotas

will result in cut-throat competition between developing countries. Coupled

with this is erosion in the growth of markets in industrial countries.

Apparent consumption of textile products, in real terms, remained stagnant

during the decade 1985-95. Purchases become discretionary and fashion-

driven. As a result, fashion cycles got shorter and order-cycles compressed.Retailers order requirements on short-order cycle term and demand rapid

responses to in-season ordering. Hence, they are compelled to secure their

supplies of top-up orders from those in close vicinity.

There is, therefore, a propensity towards sourcing from low-cost countries

in the neighbourhood as also a growth of offshore processing by

manufacturers in developed countries. Regional integration reinforces this.

Further exporters in India fear that freer imports could lead to dumping of

low-cost fabrics from China and other Southeast Asian countries. Thus, the


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industry needs restructuring on all fronts. Although the policy framework

can be blamed partially for its ills, internal factors are equally important.

Recent studies indicate that India is beginning to lose out to its rivals. In

one survey of US textile and apparel imports, China and Hong Kong had

higher market shares than India. In certain categories, other Asian low cost

producers like Pakistan and Indonesia had higher market shares and had

emerged as close competitors to India. Because many of these countries

depend on imports, however, India can take advantage of home production.

Further, formation of NAFTA means direct competition from the Latin American countries. The United States has farmed-out offshore processing

work to enterprises in Mexico and the Caribbean Base Initiative countries.

Similar relocation has taken place in Europe with manufacturers shifting

base to Eastern Europe, which provides similar advantages of cheap labour

and proximity.

According to projections by TECS, EU imports of ready-made fabrics will

double between 1994 and 2004, as a result of the elimination of quotas. US

imports are expected to treble over the same period.

According to another prediction, apparel output could more than double

(i.e. expand by 241%) between 1995 and 2005, compared to an increase of

only 114%, without the agreement on textiles and clothing.

By increasing market access, the ATC will generate multiplier effects in the

Indian economy, eventually feeding back into the textile industry itself. The

rise in demand for exports could increase output and employment in the


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textile industry. This in turn will stimulate the agricultural sector to meet

the rising demand for cotton. As profits rise, so will wages, which will act as

further stimulus. The export boom in the textile and clothing industry will

also generate considerable foreign exchange.

Given Indias high quota growth rates during the phase -out period, its

competitive product niches and established links with retailers and

importers in developed countries, it should experience vigorous growth in

the future. The World Bank predicts a growth rate of 16% per annum in the

coming decade.

Ultimately, the extent that India will benefit from trade liberalization

depends on its current cost competitiveness, its ability to increase

productivity and upgrade quality.

Implications on Indian Exports (Optimistic Scenario)


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YARN

+ Garment exports of Bangladesh increase leading to increase in

consumption of Indian fabric and yarn+ Exports of Far-East & ASEAN increase further

+ Rationalization in duties of MMF leading to increase in processing of

fibers in India

FABRIC/MADE-UPS

+ Garmenting dereserved leading to entry of large textile players ensuring

efficient sourcing and increase in the margins

+ Increase in investment for processing

+ Improvement in SAPTA trade

GARMENTS

+ Garmenting and Knitting de-reserved to allow the units to grow bigger to

be able to service large orders and large clients

+ Labor laws in India become industry friendly

+ Garment parks come up in key regions giving a boost to exports

+ Successful Quota Phase-out without exports getting restricted by QRs


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1994 1998 2002 2005* 2010*

Yarn 590 1780 2333 2701 3131

Made-ups 851 1498 2620 4527 11266

Fabric 1214 1716 2512 3530 7100

Garments 3713 4829 6510 10794 21711

Total 6368 9823 14035 21552 43208


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IMPLICATIONS ON INDIAN EXPORTS

(PESSIMISTIC SCENARIO)

YARN

- Change works to the advantage for S. Korea/ASEAN/Far-East

- Demand for packages increases

- EEC other garment supply countries invest in back-end processes

FABRIC/MADE-UPS- Environmental Clause impacts

- Investment in processing does not happen

- Blends and synthetic fabrics dominate reducing advantage of Indian

cotton

GARMENTS- Social clause impact leading to ban on some categories, etc.

- SSA is a reality impacting exports of garments from India to USA and EU

- FTA becomes a reality

- Other projectionist measures come up

As opposed to the optimistic scenario, the pessimistic scenario shows ashortfall of nearly US $4000 mn of exports in year 2005 and the exports are

not likely to be much higher than the present figures. It would also lead to

development of textile and clothing industry in the other nations and India

would lose out as a significant player in the industry. This would also stifle


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the domestic textile industry which would be in a very weak position to

compete with imports. (These are expected to become cheaper with import

duty rationalization as per international treaties and cost competitiveness of

overseas players). Some of the subsidies currently extended by the Indian

government to promote exports which are sector specific (TUF, 80 HHC) or

region specific (EPZS, EOUS) may also need to be withdrawn.

1994 1998 2002 2005* 2010*

Yarn 590 1780 2003 2126 2022

Made-ups 851 1498 2038 2427 3098

Fabric 1214 1716 1931 2050 2154

Garments 3713 4829 5435 5939 6885

Total 6368 9823 11408 12542 14159


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CONCLUSIONS

To effectively tackle the situation India needs to invest in research and

development to develop new products, reduce transaction costs, reduce perunit costs, and finally, improve its raw material base. India needs to move

from the lower-end markets to middle level value-for-money markets and

export high value-added products of international standard. Thus the

industry should diversify in design to ensure quality output and

technological advancement.

The weakest links in the entire chain are the powerlooms and the processing

houses. The latter especially are very important because they are

responsible for the highest value addition in the manufacturing line. A

powerloom co-operative structure could be evolved for pooling of common

services and functions such as quality testing, marketing, short-term

financing, etc. Further, because of the geographical proximity enjoyed, a

cluster approach can be adopted.

The government also needs to make policy changes like dereserving the

small-scale sector so that it can achieve economies of scale and adopt a

synergistic approach.

Handlooms by their very nature can adopt a strategy of "niche marketing.

In this respect, export promotion, common credit and marketing facilities

and more significantly publicity are important areas for co-operation. Here

too, a co-operative structure would be useful though government agencies

should be involved because of their outreach. Newer and more innovative


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forms of involvement are required where decentralisation should be a key

element.

India has made little attempt to forge partnerships in equity, technology

and distribution in overseas markets. The newer nuances of global apparel

trade demand joint control of brand positioning, distributing and quality

assurance systems.

The Indian textile industry has recognised the need for a cradle-to-grave

approach when tackling environmental issues i.e. eco prescription should be

applied right from the stage of cultivation to spinning to weaving tochemical processing to packaging. Here especially there is great scope for

private -public partnerships.

A great deal of work has been done by Indian trade and industry to comply

with ecological and environmental regulations, and so Indian garments can

adopt an appropriate label signifying a distinct quality.

Efficiency and output of handloom and powerloom sectors also needs to be

increased. The clothing sector needs the support of high quality and cost-

effective cloth processing facilities. Modernisation of mills is a must.

Human resource is another area of focus. The workforce must be trained

and oriented towards high productivity.

The business environment of the future will be intensely competitive.

Countries will want their own interests to be safeguarded. As tariffs tumble,

non-tariff barriers will be adopted. New consumer demands and


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expectations coupled with new techniques in the market will add a new

dimension. E-commerce will unleash new possibilities. This will demand a

new mindset to eliminate wastes, delays, and avoidable transaction costs.

Effective entrepreneur-friendly institutional support will need to be

extended by the Government, business and umbrella organisations.

Areas where German development co-operation can help are enumerated

below.

INPUT AREAS

Policy framework is complex with inputs from many ministries. The

following chart is not meant to be exhaustive but only to indicate areas

where German development co-operation can have an impact.


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Chapter II

NATIONAL ECONOMIC

POLICIES


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NATIONAL ECONOMIC POLICY

Industrial Policy / Textile Policy

Planning

Financing

Invest ment

Export Manpower

R&D Infrast ructure

Competitivepositioning

Credits Promotion

Bilateralagreements

Education

Quality control

Ports

Evaluatingdomesticandforeignneeds

Aidthroughmulti-lateralagencies

Informationtechnology

Exportpromotion

Training Producti vity

Containers

Exportstrategy

Sectorspecific

Development of supportindustries

Skillsanddevelopment

Standardisation

Airports

Exportfinancing

Machinery /spares

Welfare ISO9000

Roads

Synthetic raw materials

Literacy Packaging

Rail


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Language

R&D Telecom

Entrepreneurdevelopment

Ecology standards

Power

Water

Gas


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POSSIBLE INDO-GERMAN CO-OPERATION IN TEXTILES

AREAS OF CO-OPERATION

Provision of co-operative structures for quality testing, marketing,

brand-building

Technological upgradation (egs. Effluent treatment plants, energy

saving devices, and other machinery related directly to the production process like spreading, cutting, finishing, etc.)

Adoption of environment-friendly technology to pre-empt the

adverse impact of non-tariff barriers. This includes environmental

monitoring / testing equipment and services, combating air

pollution (package scrubber, special air pollutant treatment for

H 2 S, CS 2 ), solid waste removal, wastewater disposal

Development of textile-specific software for India, Computer-Aided

Textile Designing, aiding IT integration

Working out alternative techniques / frame conditions such that

sanitary and phyto-sanitary measures are not a problem


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Managerial training to encourage adoption of techniques like JIT,

Quick Response Systems

Usage of EPS (Electronic Point of Sale) software

Promoting labels like RUGMARK (carpets) in textiles so that

consumers are satisfied that child labour has not been employed, tocounter negative publicity generated by the "Clean Clothes"

movement, etc.

Promoting hand-made articles by improving quality of raw

materials and introducing machinery where possible in the process

so as to maintain standards of quality and design

Development of new products

Adoption and adaptation of state-of-the-art information technologyin enterprise resource planning so as to pre-empt non-tariff

barriers which curtail markets for the Indian textile industry


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Helping firms build close relationships with customers

TRAINING CENTRES

SHORT-TERM CREDIT

Improvement of synthetic fibre-base to reap economies of scale, use

of genetic engineering, bio-technology, and cellular biology in both

natural and synthetic fibre-base


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ENVORONMENTAL ASPECTS IN THETEXTILE TRADE

There is always an environmental impact the textile production. The

impact starts with the use of pesticides during the cultivation of plants for

the natural fibres, the erosion caused by the sheep farming or the emissions

during the production of synthetic fibre. So there is the environmental

effect in the process of production, where thousands of different chemicals

are used to reach the final stage of textile products.

Awareness of environmental problems has increased considerably during

recent years and the environment has become a major issue in the

international textile trade. This is due to the environmental and health

legistation and the environmental policies that is being executed through

market demands. The end users in developed countries are highly sensitive

about the issues like azo dyes and child labour in the textile production. The

action by the developed countries in this matter was put as Non-Tariff Barriers for the exports from the developing countries like India.


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ENVIRONMENTAL LEGIILLATION

Developed countries are reviewing the regulation of harmful substances in

the textile products. The major issues are.

a) Ban on azo dyes

b) Regulation of formaldehyde

c) Regulation of Pentachlorophenol (PCP)

d) Limit values for residues of pesticides

e) Ban on allergic disperse dyes

f) Regulation of the content of chromium.

Most of the operative legislation is applicable to the importer who places the

product on the developed country markets. The importer requires mostly

legally binding guarantees. The requirements are often included in the LC.

The environmental developments in connection to the textile trade may be

classified as:

(i) Product oriented policy

(ii) Process oriented policy

(iii) Waste management policy.


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PRODUCT ORIENTED POLICY

Under this policy, the product is considered directly or indirectly

responsible for any adverse environmental effects that occur in the entire

industrial chain. So the product is thought to be the starting point for thereduction in the impact on environment. Under this, the Life Cycle

Assessment (LCA) is the major criteria to evaluate the products impact on

environment. In other ward, the environmental impact of a product is

based on the pollution caused by the extraction of its raw material, by its

primary & secondary manufacturing, by its consumption and maintenance

and in its waste.

The product oriented policy focuses on there measures.

1) Regulating measures, which puts the legislation concerning the

composition of products.

2) Facilitating measures, which by using the market mechanism reduces the

environmental impact of a particular product.

3) Stimulating measures, which works through more awareness to the

consumers.


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PROCESS ORIENTED POLICY

This environmental policy aims at a particular industry (company). The

policy has the sole purpose of reducing the environmental problems of production process in a specific company.

WASTE MANAGEMENT POLICY

The waste management policy aims at reducing the environmental

problems caused by discarded products and packaging material, which havereached the waste phase.

Legislation on packaging has been implemented in Germany on the

obligation for producers and importers to take back used packaging

materials. In 1997, the European Directive concerning packaging and

packaging waste has been implemented in the national legislation of itsmember states.


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OTHER ENVIRONMENTAL ISSUES

1) Ban on Azo dyes.

Now the developed countries are more concusses on the use of Azo dyes in

the textiles production. Azo dyes are the colouring agents in the textile

industry. In contact with the skin, Azo dyes may form carcinogenic

substances (amines). Germany and Netherlands have banned all Azo dyes,

which can split off any of the 22 listed carcinogenic amines.

The Netherlands, Austria and Germany are the only Member states that

have already adopted national legislation banning the use of carcinogenic

azocolourants.

The Netherlands adopted a Regulation banning the import and sale of

products containing azo dyes, which entered into force in 1997. The ban

covers bed linen, clothing and shoes. The regulation forms part

of the Dutch Commodity Act.

Germany banned the import and sale of textile dyed/printed

with certain azo dyes, effective from April 1,1996 .

Austria adopted legislation banning the marketing and use of productscontaining azo dyes (trade and use of azo dyes as such is not prohibited

in any EU country). The law entered into force in 1997. The Austrian

legislation relies on the same analytical method to measure the content

of azo dyes in products as the German and the Dutch provisions.


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2. ECO Labels

Eco labels ensures a company that produces a product is eco- friendly and

so it gets a friendly response from the importers. Eco labels for textiles are

widely recognized and is gaining much importance in the developed

countries like EU and USA. The following Eco labels are important in the

textile products.

a) Health Eco Labels

b) Environmental Eco-labelsc) Organic Eco labels

d) Social labels

The world wide recoginised Eco-label for textiles is OKO-TEX 100 , which

guarantees the consumer that the product will not harm the health during

wearing. OKO-TEX 100 requires unit values/concentrations on PH,carcinogenic, azo dyes, formaldehyde, chlorinated phenols, pesticides,

heavy metals and allergic dyes.


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3. Environmental Management System

The introduction of policies like environmental management system by the

developed countries is important to the exporters in the developing

countries like India. The ISO 14001 standard is the only standard for the

environmental management system accepted worldwide. This system

involves.

(i) A complete overview of the environmental impact of the company can

be obtained.(ii) The environmental impact of the company can be controlled.

(iii) Whenever possible, the environmental impact of the company can be

diminished.


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4. Waste water Management

The biggest enviromental problem associated with the textile industry is the

water pollution caused by the discharge of untreated effluents. Waste water

arising from the washing and dyeing sections of production contains a

substantial amount of organic and suspended pollution, such as dyes and

caustic soda, which have a negative impact on environment. The growing

concern on this issue by the developed countries requires an immediate

action to manage it properly.

The trade of textile products is very much sensitive in respect of the

environmental issues and so the importers may demand certain guarantees

for product, for example some of the leading importers at EU market

demand that all textile purchased have been tested according to OKO-TEX

100. So the growing concern regarding the environmental impact of the

textile production should be taken care of much in advance, otherwise theexports of textile products to the traditional markets and developed

countries will be hindered with more and more Non-Tariff barriers (ntbs).


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Chapter III

COMPANY INTRODUCTION


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Our vision describes our higher purpose and is supported by our talents

and values.

Our talents define what we are good at and provide a framework for

development.

Our values are beliefs that shape our performance. They are the behaviors

expected of us and are important for strengthening our talents and

achieving our vision.

The Pratibha Way Our Way of Working

What makes us different?

If you look at any business a hotel, a glass manufacturer or a metal plant

they all do the same thing as others like them. But what makes some

succeed and others not?

The answer is simple the way they do what they do.

The Pratibha Way is based on a set of principles: our mission, talents

and values. They help us set our priorities and serve as a reference

point when questions arise.


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Our vision describes our higher purpose and is supported by our talents

and values.

Our talents define what we are good at and provide a framework

for development.

Our values are beliefs that shape our performance. They are the behaviors

expected of us and are important for strengthening our talents and

achieving our vision.

The Pratibha Way has powered our company's success from the day we

began. Today, it lives on in the way we work and the decisions we make.

It is our 'reason for being' beyond just making money. It is our way of

running a

successful business. In the end, it's what brings us closer closer to the world we operate in and closer to each other.

VISIONOur 'reason for being' Talents What we're good at as

a company

VALUESBehaviors that shape our performance


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OUR VISION

Pratibha's vision is to be a global leader in sustainable textile products and

practices. Every company aims to be profitable. But to really make a

difference, it must have a higher purpose .

Our vision expresses our purpose. It sets the standard that we , as a

company and as individuals, aspire to live up to every day.

While it carries some big ideas, our vision has down-to-earth implications

for each of us. By using

it to inform the decisions we make every day, our work and products can

better contribute to making our world sustainable and successful.

The following pages describe some of the ideas in our vision and the role

talents play in achieving it.

5We build business

A PRATIBHA TALENT

To lead meansthat we help createthe ability for othersto develop and

progress.

Our vision


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that matters A PRATIBHA TALENT

Since Pratibha began, we have built businesses that helped sustain

and nurture the world around us. Weve done this by cultivating natural

resources, respecting their limitations and maintaining a long-term

perspective. Ultimately, this business have made a deference by creating

fundamental value the basis for all other value, whether nancial,

environmental or societal.

OUR VISION

in sustainable

Sustainable means the condition of being able to meet the needs of present

generations without compromising those needs for future generations.

Achieving a balance among extraction and renewal and environmentalinputs and outputs, without further burdening the environment.

Complete waste water treatment and reclamation upto 85% has-been a

cornerstone achievement of the company. Efforts are on to further improve

this system and take recovery levels for industrial reuse to 95%. Pratibha

has spent over US$ 3 million on treating dyeing and finishing

,humidification systems and toilets and campus accommodation. Pratibha

has-been working on a zero discharge policy since the inception of the

dyeing and finishing process in the year2000. Other key initiatives include


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moving to in-house gas based power supply from furnace oil (a much

cleaner fuel),earning the company Carbon Credits and Waste Heat Recovery

Boiler in the power plant producing steam for air-conditioning for the

garment division and for the dyeing machines.

OUR VISION ALWAYS LOOKING

A PRATIBHA TALENT

Pratibha is Indias leading vertically integrated textile industry. With our

wide rage of products we were able to get closer to the customer by

addressing their needs more specifically. This talent has enabled us to

grow a successful textile business well beyond its starting point.

We focus on creating close partnerships to better meet customer needs.

We look ahead to anticipate changes that will affect their businesses and

cooperate with them to come up with fresh, new ideas. A healthy society

needs healthy businesses. Our starting point is always looking for the

commercial solution that will help our customers and the world move

forward.

Making our textile production more environmentally sound meant

phasing out old technologies. But social commerce is not just about being

environmentally friendly. Here, it meant seeing the bigger picture by

helping to establish new businesses and creating new jobs.


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This talent reminds us that working in close collaboration with our

communities is essential. They are as much a part of our business as the

plants that operate in them.

Society' is made up of our customers, our partners and the communities

and the places we operate in. Society includes our commercial interests and

our social responsibilities in one thought.

It's the reason why we see business performance and societal needs as

inseparable and interdependent. Its the reason we've always made a

conscious effort to balance the drive for-profit with the needs of the world

around us.


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commerce

A PRATIBHA TALENT

CourageCooperation

OUR VALUES

VALUES AREFUNDAMENTALBELIEFSTHAT

SHAPEOUR BEHAVIOR

Values influence everything we doand say. A decision to run abusiness,the

way we raise ourchildren, a choice to maintain acertain friendship are all

driven bypersonal values.Values also shape performance.Doing a job well

starts with knowingwhat is expected. That's whatPratibha's values are all

about beliefs that guide us, not only to doour job successfully,but to 'go

thatextra mile'.Each of our values defines the waywe act as individuals, as

teams andas a company. And we shouldn'tforget that while each one

isimportant, they are interdependentand are meant to achieve a

balance.The following pages present eachof our values and a few thoughts

onwhat they mean in practice.


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OUR VALUES

Courage Facing challenges and taking measured risks despite

uncertain outcomes

Moral excellence comes about as a result of habit. We become just by doing

just acts, temperate by doing temperate acts, brave by doing brave acts.

With robust expansion strategy we believe in strategic investments a

demonstration of where courage, in tandem with our other values, has

helped us build rewarding partnerships.

?

Respect Our values Acting with integrity and recognizing the

inherent worth of all people, the value of the earth and the

resources it provides.

Earth in hands is a symbol of the genuine care and respect we have for

people and the value we put on saving lives around the world. Savingresources through three way strategy of reduce-reuse-recycle is a strong

demonstration of how we act on this value.

19

Cooperation Our values Working with others in an open and

inclusive way

Working in close partnership with others means we can get further than

we ever could alone. This is why we cooperate with each other in order to

make the most of the considerable resources that exist in the Pratibha

community. Together with our customers, our partners and our


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communities, we are always forging strong relationships to find the

solutions that will make our world work better.

Determination Our values Defining a goal and staying the course

Desire is the key to motivation, but it's determination and commitment to

an unrelenting pursuit of our goal - commitment to excellence - that

enables us to attain the success we seek. Determination makes us do more

than we could ever imagine

?

Seeing around corners and envisioning long-term opportunities

Nature is most powerful. Every day its nature that reminds us that we

have so much more to discover. By looking beyond where we are today, it's

much more possible to shape a sustainable future

What do we do with this?

These ideals have helped us to do great things in the past. As a focused

textile company, they will help us accomplish even more in the future. Allthat is asked of each of us is to be conscious of them and live up to them

every day. By doing so, we will be ready for the challenges and opportunities

we meet.


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Registered officePratibha Syntex pvt. Ltd.301, Acne Plaza,opp. Sangam Cinema, Andheri Kurla Road, Andheri (E)Mumbai-400059. India.Tel. 91-22-66921428,28314850,28314853Fax. 91-22-28361464E-mail : [email protected]

Work Pratibha Syntex Pvt. Ltd.Plot No 4,IGC KHEDA-454774

Pithampur, Distt. DHAR (M.P.)IndiaTel. 91-7292-404362-3,404357Fax 91-7292-256340-1E-mail : [email protected]@pratibhasyntex.com

Indore OfficePratibha Syntex Pvt. Ltd.301, Apollo Avenue,30B, Old Palasia,Indore-1 (M.P.)INDIA Tel. 2562228-9Fax 91-731-2562227E-mail

Delhi NCR

Plot No 16, DLF Phase-2 ,Near NHPC Chowk,Faridabad - 121003 INDIA Tel:+91 129 4107318Email: [email protected]:[email protected]
mailto:[email protected]:[email protected]


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Chapter IV

TEXTILE RIVIEW


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sectors for both rural and urban areas, particularly for women and the

disadvantaged. It constitutes of the following segments: Readymade

Garments, Cotton Textiles including Handlooms, Man-made Textiles, Silk

Textiles, Woollen Textiles, Handicrafts, Made ups, Coir and Jute.

Till the year 1985, development of textile sector in India took place in terms

of general policies. In 1985, for the first time the importance of textile sector

was recognized and a separate policy statement was announced with regard

to development of textile sector. In the year 2000, National Textile Policy

was announced. Its main objective was to provide cloth of acceptable quality

at reasonable prices for the vast majority of the population of the country, to

increasingly contribute to the provision of sustainable employment and the

economic growth of the nation and to compete with confidence for an

increasing share of the global market. The policy also aimed at achieving the

target of textile and apparel exports of US $ 50 billion by 201 0 of which the

share of garments will be US $ 25 billion.

STRUCTURE OF INDIAN TEXTILEINDUSTRY

India's textile industry is also significant in a global context, ranking second

to China in the production of both cotton yarn and fabric and fifth in the

production of synthetic fibers and yarns. Unlike other major textile-

producing countries, India's textile industry comprises mostly of small-

scale, non-integrated spinning, weaving, finishing and apparel enterprises.


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COMPOSITE MILLS

Relatively large-scale mills that integrate spinning, weaving and sometimes,

fabric finishing are common in other major textile-producing countries but

in India, however, these types of mills now account for about only 3 per centof output in the textile sector. About 276 composite mills are now operating

in India, mostly owned by the public sector and many deemed financially

"sick."

SPINNING

Spinning is the process of converting cotton or man made fiber into yarn to

be used for weaving and knitting. Largely due to deregulation beginning in

the mid-1980s, spinning has become the most consolidated and technically

efficient sector in India's textile industry but the average plant size remains

small with outdated technology, relative to other major producers. In 2002-

03, India's spinning sector consisted of about 1,146 small-scale independent

firms and 1, 599 larger scale independent units.

WEAVING AND KNITTING

Weaving and knitting converts cotton, man made or blended yarns into

woven or knitted fabrics. India's weaving and knitting sector remains highly

fragmented, small-scale and labor-intensive. This sector consists of about

3.9 million hand looms, 380,000 "power loom" enterprises that operate

about 1.7 million hand looms and just 137,000 power looms in the various

composite mills. "Power looms" are small firms with an average loom

capacity of four to five owned by independent entrepreneurs or weavers and


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modern shuttle less looms account for less than one percent of loom

capacity.

FABRIC FINISHING Fabric finishing (also referred to as processing), which includes dyeing,

printing, and other cloth preparation prior to the manufacture of clothing,

is also dominated by a large number of independent, small scale

enterprises. Overall, about 2,300 processors are operating in India,

including about 2,100 independent units and 200 units that are integrated

with spinning, weaving or knitting units.

CLOTHING

Apparel is produced by about 77,000 small-scale units classified as

domestic manufacturers, manufacturer exporters, and fabricators

(subcontractors). This unique structure of the Indian textile industry is due

to the legacy of tax, labor and other regulatory policies that have favored

small-scale, labor-intensive enterprises, while discriminating against larger

scale, more capital-intensive operations. The structure is also due to the

historical orientation towards meeting the needs of India's predominately

low-income domestic consumers, rather than the world market. Policy

reforms, which began in the 1980s that continued into the 1990s, have ledto significant gains in technical efficiency and international

competitiveness, particularly in the spinning sector. However, broad scope

remains for additional reforms that could enhance the efficiency and

competitiveness of India's weaving, fabric finishing, and apparel sectors.


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Chapter V

SWOT ANALYSIS OF

INDIAN INDUSTRY


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SWOT ANALYSIS OF INDIAN TEXTILEINDUSTRY

Indian textile industry is as old as the word textile itself. Until the economic

liberalization of Indian economy, this Industry was predominantly

unorganized but the opening up of Indian economy post 1990s led to a

stupendous growth of this industry.

This industry holds a significant position by providing the most basic need

to Indians. Starting from the procurement of raw materials to the final

production stage of the actual textile, it works on an independent basis.

STRENGTHS

Huge textile production capacity

Efficient multi-fiber raw material manufacturing capacity

Large pool of skilled and cheap work force

Entrepreneurial skills

Huge export potential

Large domestic market

Very low import content

Flexible textile manufacturing systems


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textiles, clothing and machinery; Brand Promotion on Public-Private

Partnership (PPP) approach to develop global acceptability of Indian

apparel brands; Trade Facilitation Centres for Indian image branding;

Fashion Hubs for creation of permanent market place for the benefit of

Indian fashion industry; Common Compliance Code to encourage

acceptability among apparel buyers and Training Centres for Human

Resource Development on Public Private Partnership (PPP) mode.

It's not just the present that is shinning like a bright start but also the

future, as the textile export market of India is expected to reach a high of

$50 billion by 201 O. This will eventually make a profit by 300%. In order to

attain this target Indian textile industry has already started improving their

design skills, including a combination of various fibers. It is all set to meet

international standards and is planning to invest $5 billion in machineries

very soon.

Most of the international brands like Marks & Spencer, JC penny, Gap have

started procuring most of their fabrics from India. In fact, Walmart, who

had procured textile worth $200 million last year, intends to procure $3

billion worth of textile this year.

These schemes will be beneficial for the industry but still more needs to be

done. Given the safeguards, it possesses the potential to give any major

player in the world market a run for their money and announce its arrival

into the world market in a big way.


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CURRENT SCENARIO

The Indian textile industry contributes about 14 per cent to industrial

production, 4 per cent to the country's gross domestic product (GDP) and 17per cent to the countrys export earnings. The industry provides direct

employment to over 35 million people and is the second largest provider of

employment after agriculture. The total cloth production increased by 10.2

per cent during September 2011 as compared to September 2009. The

highest growth was observed in the powerloom sector (13.2 per cent),

followed by hosiery sector (9.1 per cent). The total cloth production during

April-September 2010 has increased by 2.1 per cent compared to the same

period of the previous year. The total textile exports during April-July 2010

(provisional) were valued at US$ 7.58 billion as against US$ 7.21 billion

during the corresponding period of the previous year, registering an

increase of 5.20 per cent in rupee terms. The share of textile exports in total

exports was 11.04 per cent during April-July 2011.

Cotton textiles has registered a growth of 8.2 per cent during April-

September 2010-11, while wool, silk and man-made fibre textiles have

registered a growth of 2.2 per cent while textile products including wearing

apparel have registered a growth of 3 per cent. India has the potential to

increase its textile and apparel share in the world trade from the current

level of 4.5 per cent to 8 per cent and reach US$ 80 billion by 2020. Textiles

and apparel industry exports, valued at US$ 20.02 billion (INR 963.05

billion), contributed about 11.5 per cent to the countrys total exports in

2008 09.


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EXPORT ITEM EXPORT VALUE (2010 11)

US$ BILLION(INR BILLION) SHARE IN

TOTAL TEXTILES EXPORTS (%)

Cotton textiles 4.54(218.08) 22.64

Manmade textiles 3.14 (150.88) 15.67

Silk textiles 0.64 (31.06) 3.23

Wool and woollen textiles 0.45(21.99) 2.28

RMG 9.81 (471.1) 48.92

Handicrafts(including carpets) 1.02(49.39) 5.13

Jute 0.28(13.75) 1.43

Coir and coir products 0.14(6.80) 0.71

The total textiles imports into India in 2008 09 were valued at US$ 3.33

billion (INR 160.93 billion).


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IMPORT ITEM IMPORT VALUE (2010 11)

US$ BILLION(INR BILLION)

SHARE IN TOTAL TEXTILES IMPORTS (%)Raw material 0.78(37.84) 23.51

Semi-raw material 0.75(36.14) 22.46

Yarn, fabrics 1.46 (70.49) 43.80

RMG 0.13(6.25) 3.88

Made-up textiles articles 0.21(10.21) 6.35

TECHNICAL TEXTILE SEGMENT

Technical textiles are an important part of the textile industry. The Working

Group for the

Eleventh Five Year Plan has estimated the market size of technical textiles

to increase from US$

5.29 billion in 2006-07 to US$ 10.6 billion in 2011-12, without any

regulatory framework and to

US$ 15.16 billion with regulatory framework. The Scheme for Growth and

Development of

Technical Textiles aims to promote indigenous manufacture of technical

textile to leverage


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MAJOR PLAYERS IN TEXTILE INDUSTRY

MAJOR PLAYERS AND THEIR TURNOVER COMPANY TURNOVER (2010 11)US$

BILLION (INR BILLION)

Business areas

Welspun India Ltd 1.19(57.4) Home textiles, bathrobes, terry towels

Vardhman Group 0.7 Yarn, fabric, sewing threads, acrylic fibre Alok

Industries Ltd 0.62(29.76) Home textiles, woven and knitted apparel fabric,

garments and polyester yarn Raymond Ltd 0.54 Worsted suiting, tailoredclothing, denim, shirting, woollen outerwear Arvind Mills Ltd 0.48(23.44)

Spinning, weaving, processing and garment production (denims, shirting,

khakis, knitwear) Bombay Dyeing & Manufacturing Company Ltd

0.27(13.16) Bed linen, towels, furnishings, fabricfor suits, shirts, dresses and

saris in cotton and polyester blends Garden Silk Mills Ltd 0.27(13.31) Dyed

and printed fabric Mafatlal Industries Ltd 0.03(1.27) Shirting, poplins, bottom wear fabrics, voiles Aditya Birla Nuvo, a diversified conglomerate of

the Aditya Birla Group, comprising three divisions

Madura Garments, Jayashree Textiles and Indian Rayon

3 (consolidated revenues for Aditya BirlaNuvo)Madura Garments lifestyle

market (Louis Philippe, Van Heusen, Allen Solly, The Collective) JayashreeTextiles domestic linen and worsted yarn Indian Rayon viscose filament

yarn ITC Lifestyle 0.62 (for total FMCG business) Lifestyle market Reliance

Industries Ltd 28.85 (total group) Fabric, formal menswear


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WELSPUN INDIA LTD

Welspun India Limited (WIL) is the Flagship company of Welspun Group

with an enterprise value of U.S. $ 3 billion. WIL is ISO 9001:2000, 14001

and SA 8000 certified company. WIL is a composite textile mill producing

Cotton Yarn, Terry Towels and Rugs for international market. Welspun

India Ltd. is one of the largest Home Textiles producers in Asia and

amongst the top 4 producers of Terry Towels in the world. WIL is located at

village Morai in Valsad district, Gujarat State. WIL annual sales turnover

for year 2010-2011 was Rs. 681.881 crores. They have presence over 50

Countries, over 24,000 employees & 100,000+ shareholders, Welspun is

one of India's fastest growing conglomerates.


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Ellitwist Yarn

Modal Yarn

Vortex Yarn

Tencel Yarn

Slub Yarn

Viscose Yarn

Acrylic Yarn

Hand Knitting Yarn

Poly - Cotton Yarn

Speciality Yarn

Acrylic - Cotton Yarn


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Home Textiles

Polyester Yarn

Embroidered Fabric

Retailing


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GOVERNMENT INITIATIVES ANDREGULATORY FRAMEWORK

GOVERNMENT INITIATIVES

Investment under the Technology Upgradation Fund Schemes (TUFS) has

been increasing steadily. During the year 2010-11, 1896 applications have

been sanctioned at a project cost of US$ 5.23 billion. The cumulativeprogress as on December 31, 2009, includes 27,477 applications sanctioned,

which has triggered investment of US$ 45.5 billion and amount sanctioned

under TUFS is US$ 18.9 billion of which US$ 16.4 billion has been

disbursed so far till the end of April, 2011. The Ministry of Textile has

sanctioned a total of US$ 133 million under TUFS during September 2010.

Moreover, in May 2011, the Ministry of Textiles informed a parliamentary

panel that it proposes to allocate US$ 785.2 million for the modernisation of

the textile industry.

The Scheme for Integrated Textile Park (SITP) was approved in July 2005

to facilitate setting up of textiles parks with world class infrastructure

facilities. 40 textiles park projects have been sanctioned under the SITP, out

of which 25 textile parks are already in operation. Under the

SITP, about US$ 763.7 million has been invested into the scheme and

generated employment for 15,000 textiles workers.


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Further, 100 per cent FDI is allowed in the textile sector under the

automatic route. In the Union Budget 2010-11 presented in February 2010,

the Finance Minister made the following announcements to benefit the

textile industry:

The central plan outlay for the industry has been enhanced to US$ 1.03

billion. Of this US$ 521.4 million is for TUFS, US$ 76 million for SITP, US$

80.2 million for handlooms, US$ 69.3 million for handicrafts and US$ 98.4

million for sericulture.

Allocation for textiles and jute industry is US$ 713.4 million.

The total allocation for village and small enterprises sector which include

handicrafts and handlooms is US$ 210.3 million.

US$ 31.5 million has been provided for development of mega clusters in

handlooms, handicrafts and powerloom sectors.

Customs duty at 4 per cent for import of readymade garments for retail

sales has been withdrawn.

The micro small medium enterprises in textiles sector have been given full

CENVAT credit on capital goods in one installment in the year of receipt of

such goods and the facility of payment of excise duty in quarterly basis.

The Minister of Textiles launched the Knitwear Technology Mission being

setup at Tirupur, Tamil Nadu, as part of Plan Scheme of the Ministry. The

Mission is aimed at upgrading the technology and skill levels in the

knitwear segment of the textile industry, to bring in more export

competitiveness.


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Other government initiatives Scheme for Integrated Textile

Parks, 2005

The scheme was introduced to neutralise the weakness of fragmentation in

the various subsegments of the textiles value chain and the unavailability of

quality infrastructure.

The Eleventh Five Year Plan (2007 2012) outlay for the textiles and apparel

sector has been fixed at US$ 2.91 billion (INR 140 billion), which is almost

four times the outlay fixed during the Tenth Plan US$ 0.74 billion (INR

35.8 billion).


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POLICY AND REGULATORY FRAMEWORK

The Ministry of Textiles is responsible for policy formulation, planning,

development, export promotion and trade regulation in the textile sector.

This includes all natural and manmade cellulosic fibre used to make

textiles, clothing and handicrafts. National Textile Policy, 2000 - the policy

was introduced for the overall development of the textiles industry. The key

areas of focus include

Technological upgrades

Enhancement of productivity

Quality consciousness

Strengthening of raw material base

Product diversification

Increase in exports and innovative marketing strategies

Financing arrangements

Increasing employment opportunities

Integrated human resource development

Technology Mission on Cotton (TMC), 2000 -the scheme was

introduced to address concerns around cotton production and processing

sectors and to place the cotton economy on a sound footing. It was initially


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to be phased out at the end of the Tenth Five Year Plan (2002 07).

However, the schemes Mini Mission iii and iv has been further extended

into the Eleventh Plan for two years to accomplish targets.

The objectives of this programme include

Improving the yield and quality of jute fibre

Strengthening existing infrastructure for the development and supply of quality seeds

Improving the quality of fibre through better methods of retting and

extraction technologies

Increasing the supply of quality raw material to the jute industry at

reasonable prices and developing efficient market linkages for raw jute.

Modernising, upgrading technology, improving productivity, diversifying

and developing human resource for the jute industry

Developing and commercializing innovative technology for the diversified

use of jute and allied fibre


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Chapter IIV

OPPORTUNTIES


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OPPORTUNITIES

The potential size of the Indian textiles industry is expected to reach US$

110 billion by 2012.

Private sector participation in silk production

The Central Silk Board has set a target of 26,000 tonnes of raw silk

production by 2011 12. It has also proposed to enlarge the area under

mulberry silkworm food plants to 0.25 million hectares, which is expected

to produce an additional 6,400 MT of mulberry raw silk and increase

employment. To achieve these targets, alliances with the private sector,

especially major agrobased industries in both pre-cocoon and post-cocoon

segments, is being encouraged.

Technical textiles

The textiles industry complements the growth of several industries and

institutions such as the defence forces, railways and government hospitals,

which are the key institutional buyers of technical textiles. The packtech

segment constitutes 38 per cent of the total technical textiles production in

India (2010-11). This industry includes the production of flexible packaging

material for industrial, agricultural and consumer goods. Among the other

segments, protech, oekotech, sportech and geotech have significant growth

potential.

Retail sector

With consumerism and disposable income on the incline, the retail sector

has witnessed rapid growth in the past decade. Several international


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retailers are also focussing on India due to its emergence as a potential

sourcing destination.

Centres of Excellence (CoE) for research and technical training

The Government of India has proposed the establishment of several CoEs

for training the workforce in the textiles sector. Four CoEs have been

identified for four thrust segments of technical textiles geotech,

meditech, protect and agrotech. These CoEs, with national and

international accreditation, are aimed at creating facilities for testing and

evaluation and developing resource centres and facilities for training.


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DISTRIBUTION OF TEXTILE SECTORS ININDIAN MARKET:


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PROBLEMS FACED BY INDIAN TEXTILEINDUSTRIES ACCORDING TO TIMES OF

INDIA REPORT ON JULY 05, 2007:


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www.bharattextile.com

www.texprocil.com

www.economywatch.com

www.marketresearch.com

www.pd.cpim.org

www.ezinearticles.com

www.indialine.com

www.fibre2fashion.com

Project Bhupendra

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Transcript of Project Bhupendra