T£XTIL£ INDUSTRY

SUBMITTED BY PRANJUL CHOPRA

ROLL NO. 1065

THE INDIAN TEXTILES INDUSTRY HAS AN OVERWHELMING PRESENCE IN THE

ECONOMIC LIFE OF THE COUNTRY. APART FROM PROVIDING ONE OF THE

BASIC NECESSITIES OF LIFE, THE TEXTILES INDUSTRY ALSO PLAYS A

VITAL ROLE THROUGH ITS CONTRIBUTION TO INDUSTRIAL

OUTPUT, EMPLOYMENT GENERATION, AND THE EXPORT EARNINGS OF THE

COUNTRY.

INTRODUCTION

The sector contributes about 14 per cent to industrial production, four per

cent to the gross domestic product (GDP), and 17 per cent to the country's export earnings. India's textile industry

is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scope for the other

ancillary sectors. Indian textile industry currently generates employment for

more than 35 million people.

MARKET SIZE

The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand.

Abundant availability of raw materials such as cotton, wool, silk and jute and skilled

workforce has made India a sourcing hub.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 eight per cent

and reach US$ 80 billion by 2020.Textile exports in FY15 are expected to grow

by 25 per cent to US$ 50 billion,

PORTER’S FIVE FORCES FRAMEWORK

Porter’s five forces framework models that competitive interaction in any industry is

influenced by five forces. The framework has helped businesses become

more profitable and government to stabilise industries.

If effectively applied, the five force framework helps develop business strategy to maximise

profits.

PORTER’S FIVE FORCES FRAMEWORK

THREAT FROM NEW ENTRANTS (LOW)

Retailing not allowed for foreign players

Huge investments in infrastructure is required

Availability of skilled labors and technical know-how is low

AVAILABILITY OF SUBSTITUTES (HIGH)

Unorganized retailing

E-retailing

Catalogue sales

BARGAINING POWER OF BUYERS (MODERATE)

Individually, customers have very little bargaining power within the

organized retail stores Lots of various shopping formats

available to shop fromLots of brand choices available for similar qualities with different price

BARGAINING POWER OF SUPPLIERS (LOW)

Being bulk purchases done by organized retailer’s suppliers have very little bargaining

power in organized retailing.

Many retailers are doing backward integration and coming out with private labels, thus decreasing dependence on

traditional suppliers.

INDIA’S TEXTILE EXPORTS

Source: www.ibef.org/industry/textiles.aspx

The size of India’s textile market is expected to expand at a CAGR of 10.1 per cent over 2009–21

PRODUCTION OF RAW COTTON IN INDIA

Source: www.ibef.org/industry/textiles.aspx

GOVERNMENT INITIATIVES

The government has taken a lot of initiatives for the welfare and development of the

weavers and handloom sector. Under revival, reform and restructuring (RRR) package,

financial assistance to the tune of Rs 1,019 crore (US$ 168.49 million) has been

approved and the government has already released Rs 741 crore (US$ 122.52 million).

FUTURE OUTLOOK 

With consumerism and disposable income on the rise, the retail sector has experienced a rapid

growth in the past decade with several international players like Marks & Spencer, Guess

and Next having entered Indian market. The organized apparel segment is expected to grow at a compound annual growth rate (CAGR) of more

than 13 per cent over a 10-year period.

The Government of India is also taking initiatives to attract foreign investments in the textile sector

through promotional visits to countries such as Japan, Germany, Italy and France.

THANK YOU