The textile industry in India is considered a pioneer industry, as India’s industrializations in other fields have succeeded through the textile industry’s resources. From the early 1970s to the beginning of liberalization in 1992, the industry tended to be isolated as measures taken by the Government (with the apparent objective of protecting the cotton growers, the large labor force, and the consumers) have constantly eroded its prosperity.
World over, the Indian textile industry is considered the second largest industry. It has the biggest cotton acreage of 9 million hectares and is considered the third-largest producer of this fiber. In terms of staple fiber production, it comes fourth and sixth for filament yarn production. The country reports about one-fourth of global trade in cotton yarn Sci Burg.
With over 15 million people employed, the textile industry accounted for 20 percent of its industrial production. Covering textiles and garments, thirty percent of India’s export comes from this sector; in terms of exports, it is the largest contributor to the Indian economy’s growth. Despite high capital and power cost, the Indian textile and garment sector’s strength comes from cotton availability, lower labor costs, well-skilled supervisory staff, and plentiful technical and managerial skills.
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Although very few countries are endowed with such resources, today’s globalization has brought new Indian textile industry opportunities. Concurrently, it is exposed to threats, particularly from cheap imported fabrics. Thus, India has to fight for its share in the international textile trade. Even if it is assumed that WTO will mean better distribution of the world trade, India’s benefits will not be any different than for the other developing countries. Therefore, the Indian textile industry would have to rely on its strengths and endeavor to remove its weakness.
Though, India’s apparel exporters have been employing various strategies to make sure that they remain competitive in the liberalized trading environment of 2005 and beyond. Many manufacturers are taking action for improving production efficiency through advanced automation system, re-engineering of production systems, merging separate production units and backward and forward integration of operations and are keen to expand their production capacity in anticipation of enhanced demand in 2005 and beyond Among other manufactures are seeking changes through diversifying their product ranges, exporting high-value apparel and improving their design capabilities and some of are planning to raise the added value by setting up joint ventures with foreign firms, to take benefit of their technical, design and marketing proficiency. Others are making relationships with foreign buyers to increase their marketing capability.
Support has also arrived from the Indian government to remove restrictions on investment by large companies and foreign investors. The Government has also assisted in expanding exporters’ infrastructure and has given incentives for technological up-gradation. The most important restriction is the inflexibility in labor laws, which cause it hard for large firms to cut their workforces when required.
Textile industry in the tenth plan
The Tenth Five Year Plan of India (2002-2007) forecasted a GDP growth rate of 8 percent, for which an industrial growth of 10 percent is predicted.
The Tenth Plan aims to facilitate the textile and apparel industry to:
. Develop a world-class state-of-the-art production facility to accomplish and maintain a leading global position in the production and export of textiles and clothing.
. Withstand demands of import penetration and uphold a dominant existence in the domestic market.
. To accomplish these aims, heavy funds are needed in technology and modernization in critical areas, particularly in the spinning, weaving, knitting, finishing, and apparel sectors.
. The technology up-gradation scheme (TUFS) introduced in 1999 intended to make investments component attractive. This scheme has been established to promote modernization and technology up-gradation in the specified sectors of textile and jute industries.
. India’s Government has also declared the National Textile Policy-2000 to expand a sound and vibrant textile industry. The objectives and plunged areas of the national textile policy cover technology up-gradation, enhancement of productivity, quality consciousness, product diversification, etc.
Schemes to strengthen investment in textiles during the Tenth Plan cover:
Rearranging spinning capacity
At present, nearly 38 million spindles already exist. About 10 million old spindles are required to be scrapped, and another 15 million spindles to be modernized. Adding on, about 3 million new spindles have to be set up during the Tenth Plan period.
The decentralized power loom sector, which reported a 68 percent share of the country’s cloth, is in extreme and immediate need of renovation. The textile package declared in the Central Government included the weaving sector’s renovation with 2.50 lakhs semi-automatic/automatic shuttle looms and 50,000 shuttleless looms.
There are nearly 2324 precessing establishments in the country, of which 83 belong to composite units, 165 to semi composite, and others 2076 are self-governing processing houses. Among 227 establishments are modern, 1775 are of medium technology, and 322 are obsolete establishments. Reconstruction of finishing units will need a huge financial expenditure.
Schemes for expansion and development of the knitting sector, technical textiles, and woolen and jute industries must be considered. The textile Engineering Industry is to be encouraged to modernize and offer state-of-the-art technology to the textile industry. Through focused textile machinery R&D efforts, domestic reaches and development are to be initiated.