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 India’s total forex
earnings.

India’s 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 centres exist including Kanpur,
Calcutta, Indore, Coimbatore, and Sholapur.

The structure of the textile industry is extremely

complex with the modern, sophisticated and highly
mechanised mill sector on the one hand and the
handspinning and handweaving (handloom) sector on
the other. Between the two falls the small-scale
1
Yarn, cloth, fabrics, and other products not made
into garments.
powerloom sector. The latter two are together known
as the decentralised sector. Over the years, the
government has granted a whole range of
concessions to the non-mill sector as a result of which
the share of the decentralised sector has increased
considerably in the total production. Of the two sub-
sectors of the decentralised sector, the powerloom
sector has shown the faster rate of growth. In the
production of fabrics the decentralised 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.
India's trade in textiles and its share in world trade can be
categorized as follows:

India’s Trade in Textiles

(1998)
Type India's Share in
World Trade
Yarn 22% Compound Annual Growth Rate
Fabrics 3.2% (CAGR) of different segments
Apparel 2%
Made-ups 9% Type CAGR (1993-98)
Yarn 31.79%
Fabric 9.04%
Over-all 2.8% Made-ups 15.18%
Garment 6.795%

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 1960’s 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 India’s 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 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 textile exports 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
last two 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.
Global factors influencing textile industry

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 1974 global 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 all existing arrangements that
had been governing trade in cotton textiles since
1961. 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 three extensions 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
quantitative restrictions 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
country’s 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 fibre
Under 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 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.

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.

Four Steps over 10 Year

Steps Percentage of How fast remaining
products to be quota should
brought under open up, if
GATT 1994 rate was
(including 6%
removal of
quotas)

Step 1 16 percent (minimum 6.96 percent annually

taking 1990
1st Jan 1995 – 31st Dec 1997 imports as base)

Step 2 17 percent 8.70 percent annually

1st Jan 1998 – 31st Dec 2002

Step 3 18 percent 11.05 percent

annually
1st Jan 2002 – 31st Dec 2004

Step 4 49 percent (maximum) No quotas left

1st Jan 2005

Full integration into GATT and final

elimination of quotas , ATC
terminates
Top 10 Exporters (Textile)

Country 1990 1997

Billion US$ % share Billion US$ % share
Hong 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

 Top 10 Exporters (Apparel)

Country 1990 1997

Billion US$ % share Billion US$ % share

China 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

 EU Top Ten Suppliers of MFA Clothing: Rank Price
(AGR 1994-96)

1995 1996 Rank

Price
Ranks and Average Price Ranks and Average Price
CAGR
1994-96

Country Rank in Rank in Avg. Rank in Rank in Avg. Price,

Value Volume Price, Value Volume Ecu/Kg
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

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
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 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 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 India’s 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

liberalisation depends on its current cost
competitiveness, its ability to increase productivity
and upgrade quality.
Implications on Indian Exports (Optimistic
Scenario)

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 fibres 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
 Fig in US
$ Mn
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

* Projections

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 a shortfall 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 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.
Fig in US $ Mn
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 1140 1254 1415

8 2 9

* Projections
Conclusions

To effectively tackle the situation India needs to invest

in research and development to develop new
products, reduce transaction costs, reduce per unit
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 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 to chemical 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 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.
 NATIONAL ECONOMIC POLICY

Industrial Policy / Textile Policy

Planni Financ Invest Export Manpo R&D Infrastr

ng ing ment wer ucture

Competitive Credits Promotion Bilateral Education Quality control Ports

positioning agreements

Evaluating Aid through Information Export Training Productivity Containers

domestic and multi-lateral technology promotion
foreign needs agencies

Export strategy Sector specific Development of Skills and Standardisation Airports

support development
industries

Export Machinery / Welfare ISO 9000 Roads

financing spares

Synthetic raw Literacy Packaging Rail

materials

Language R&D Telecom

Entrepreneur Ecology
development standards

Power

Water

Gas

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 H2S, CS2), 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

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, to counter 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

technology in enterprise resource planning so as to pre-empt
non-tariff barriers which curtail markets for the Indian textile
industry

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

ENVORONMENTAL ASPECTS IN THE TEXTILE

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.
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.

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 the
reduction in the impact on environment. Under this,
the Life Cycle Assessment (LCA) is the major criteria
to evaluate the product’s 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.
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 have reached
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 its member states.
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 products containing 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.

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-labels
c) 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.

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.
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 the exports of textile products
to the traditional markets and developed countries will
be hindered with more and more Non-Tariff barriers
(NTBs).
GLOBAL TRADE IN TEXTILES AND CLOTHING

TEXTILE TRADITION OF INDIA

India has a diverse and rich textile tradition. The origin of
Indian textiles can be traced to the Indus valley civilization.
The people of this civilization used homespun cotton for
weaving their garments. Excavations at Hardpan and
Mohan - jo-Daro, have unearthed household items like
needles made of bone and spindles made of wood, amply
suggesting that homespun cotton was used to make
garments. Fragments of woven cotton have also been found
from these sites.
The first literary information about textiles in India can be
found in the Rigveda, which refers to weaving. The ancient
Indian epics-Ramayana and Mahabharat, also speak of a
variety of fabrics of those times. The Ramayana refers to
the rich styles worn by the aristocracy on one hand and the
simple clothes worn by the commoners.
Ample evidence on the ancient textiles of India can also be
obtained from the various sculptures belonging to Mauryan
and Gupta age as well as from ancient Buddhist scripts and
murals (Ajanta caves). Legend has it that when Amrapali, a
courtesan from the kingdom of Vaishali met Gautam
Buddha, she wore a richly woven semi transparent sari,
which speaks volumes of the technical achievement of the
ancient Indian weaver.
India had numerous trade links with the outside world and
Indian textiles were popular in the ancient world. Indian
silk was popular in Rome in the early centuries of the
Christian era. Hoards of fragments of cotton material
originating from Gujarat belonging to 5th century A.D.
have been found in the Egyptian tombs at Fostat. Cotton
textiles were also exported to China during the heydays of
the silk route.
Silk fabrics from south India were exported to Indonesia
during the 13th century. India also exported printed cotton
fabrics or chintz, to European countries and the Far East
before the coming of the Europeans to India. The British
East India Company also traded in Indian cotton and silk
fabrics, which included the famous Dacca muslins. Muslins
from Bengal, Bihar and Orissa were also popular abroad.
The past traditions of the textile and handlooms can still be
seen amongst the motifs, patterns, designs, and the old
techniques of weaving, still employed by the weavers.
THE INDIAN SIGNATURE COLLECTION
The Indian signature collection consists of exotic textiles
such as Madras checks from Tamil Nadu, ikats from
Andhra and Orissa, tie and dye from Gujarat and Rajasthan;
brocades from Banaras, jacquards form Uttar Pradesh.
Daccai from West Bengal, and phulkari from Punjab.
Despite this regional distinction there has been a great deal
of technical and stylistic exchange. The famed Coimbatore
saris have developed while imitating the Chanderi pattern
of Madhya Pradesh. Daccai saris are now woven in Bengal,
not in Dhaka. The Surat tanchoi based on a technique of
satin weaving with the extra weft floats that are absorbed in
the fabric itself has been reproduced in Varanasi. The
Baluchar technique of plain woven fabric brocaded with
untwisted silk thread, which began in Murshidabad district
of West Bengal, has taken root in Varanasi. Their
craftsmen have also borrowed the jamdani technique.
Woolen weaves are no less subtle. The Kashmiri weaver is
known the world over for his Pashmina and Shahtoosh
shawls. The shawls are unbelievably light and warm.
The states of Kashmir and Karnataka are known for their
mulberry silk. India is the only country in the world
producing all four commercially known silks - mulberry,
tasser (tussore), eri and muga. Tasser is found in the remote
forests of Bihar, Madhya Pradesh, Orissa, West Bengal,
Andhra Pradesh and Uttar Pradesh. Eri is soft, dull and has
wool like finish. Assam is the home of eri and muga silk.
Muga is durable and its natural tones of golden yellow and
rare sheen become more lustrous with every wash. The
designs used in Assam, Tripura and Manipur are mostly
stylized symbols, cross borders and the galaxy of stars.
In the ikat tie and dye process, the designs in various colors
are formed on the fabric either by the warp threads or the
weft threads or by both. The threads forming the design are
tied and dyed separately to bring in the desired color and
the simple interlacement of the threads produces the most
intricate designs that appear only in the finished weaving. It
is believed that ikat was an innovative technique, first
created in India, which was later carried to Indonesia, the
only other place in the world with a strong ikat tradition.
INDIGENOUS DYING AND PRINTING
The process of resist-dyeing, tie-dyeing and yarns tie-dyed
to a pattern before weaving were the basic techniques of
indigenous dyeing of village cloth. Shellac was used for
reds, iron shavings and vinegar for blacks, turmeric for
yellow and pomegranate rinds for green. Before the
artificial synthesis of indigo and alizarin as dye stuffs, blues
and reds were traditionally extracted from the plants
indigofera, anil and rubia tintorum (madder-root). These
were the main sources for traditional Indian dyes. Even
today, the Kalmkari cloth of Andhra Pradesh is printed with
local vegetable dyes. The colors being shades of ochre,
deep blue and a soft rose derived from local earths, indigo
and madder roots.
Andhra Pradesh has made a significant contribution to the
history of hand-printed textiles in India. Printing is native
to the land, its pigments being obtained from the flowers,
leaves and barks of local trees and chemicals obtained from
clay, dung and river sands. A new technique has been
developed in the northern sectors where warp threads are
lined, measured and tied to the loom and then printed. The
warp-printed material is a specialty of Haryana and Uttar
Pradesh.
The ideal seasons for block printing are the dry months.
Excellence is achieved only if the block is freshly and
perfectly chiseled. The designs are produced by artists and
the designing is kept within the discipline imposed, the type
of yarn, the dyes used and the weaving techniques, by the
nakshabandhas (graph-paper designers).
Given the wide and exciting range of handloom it is not
surprising that the rich and beautiful products of the
weavers of India have been called “exquisite poetry in
colorful fabrics.”
GLOBAL TEXTILE AND CLOTHING TRADE
As per the international trade statistics for 2000,
brought out by the World Trade Organization [WTO],
global exports of textiles and clothing amounted to US
$ 356.44 billion in which clothing accounted for 55.8%
(USD 198.94 billion) and textile accounted for 44.2%
(USD 157.5 billion). India’s share in global textile and
clothing trade has been 2.87% valued at US$ 10.24
billion during the year 2000.

TEXTILE & APPAREL INDUSTRY AT A GLANCE

The Textile and Clothing industry in India accounts for

14 % of the manufacturing sector output, about 35.5
% of export earnings and employs about 26 million
people. Its net foreign exchange earning is also one
of the highest, 75% of the exports. The Indian Textile
and Apparel industry represents a mosaic of widely
diversified sectors with the organized and integrated
mill sector, medium and small scale Powerloom
sector, handloom sector, hosiery sector, apparel
manufacturers in SSI and Spinning mill sector spread
all over India. The exports in this sector comprise
yarn, fabrics, made-ups, garments, handicrafts, jute
and coir.

APPAREL/CLOTHING SECTOR

The share of Ready-made garment (RMG) in Textile

and Apparel exports is 40-45%. It accounts for over
1.6% share in GDP and 7% of the industrial
production in India. India’s apparel exports basket
consists of T-shirts, Ladies blouses, Gents shirts,
Skirts, Shorts, Trousers, Nightshirts and Nightwear
chiefly made from cotton fabrics. The major markets
for RMG are European Union, USA, Australia and
Canada.

The apparel sector basically consists of knitted and

the woven garment segments. By and large, the
industry has doubled its production levels over the
last 8 years, which means it has grown at an average
growth rate of 12% overall. However, this growth has
not been uniform for both the segments. The knitted
segment has grown faster than its woven sibling,
having grown almost three times; whereas the woven
segment grew slowly at the rate of 1.5 times.

TEXTILE SECTOR

The textile industry occupies a unique position in the

Indian economy. Its predominant presence in the
Indian economy is manifested in terms of its
significant contribution to the industrial production,
employment generation and foreign exchange
earnings. It has immense potential for employment
generation, particularly in the rural and remote areas
of the country on account of its close linkage with
agriculture.

Indian textile industry has a significant presence in the

world textile economy by virtue of its production of
textile fibres/yarns. It accounts for about 21 per cent
(35 million spindles) of the world spindleage of 166.36
million spindles, the second largest after China and
three per cent of the world rotorage of 7.81 million.
With almost 5.7 million looms (including handlooms),
the industry has the highest loomage about 64 per
cent of the world loomage of 8.9 millions. It is the
largest producer of jute and the second largest
producer of silk and the third largest producer of
cotton, cotton yarn and cellulosic fibre/yarn in the
world. It is also the fifth largest global producer of
synthetic fibre/yarn.

The Indian textile industry is predominantly cotton

based which accounts for 65 percent of fibre
consumption. Taking a cue from global consumption
pattern, it is obvious that India needs to produce more
synthetic fibre based products to meet the
international demand.

MMF Textile Sector

Man-made fibres today account for more than 60% of

the world production in textiles and its share is
growing at a steady pace. In keeping with the world
trend the MMF industry in India also grew rapidly
during the 90's. Exports of Indian MMF textiles have
increased significantly in tune with the world trade
during last 10 years. MMF exports, which were USD
303 million in 1990-91, have grown by 316% to reach
USD 1260 million in 2000-2001. The exports are
directed to 163 countries. The highly sophisticated
and quality conscious EU is the largest importer
followed by the Middle East, Gulf and the Asian
region. UAE continues to be the leading market for
Indian synthetic textiles, followed by the United
Kingdom. The other main markets are Italy, Spain,
Turkey, USA, Germany, Belgium, Saudi Arabia and
France.

Cotton Textile Sector

Exports of cotton textiles (yarn/fabrics/madeups)

increased to US$ 3643.23 million during the financial
1999-2000, as against US$ 3423.28 million in the
year 1998-99, marking a growth of around 6.42%.
Exports of cotton yarn have shown a phenomenal
growth in recent years, rising from US$ 403 million in
1992-93 to US$ 1.54 billion in 1999-2000, marking an
increase of about 282% during this period. India has a
share of 27% in the world trade in cotton yarn.
Exports of cotton fabrics have also shown a steady
growth during the last five years from US$ 613.33
million in 1992-93 to US$ 1.1 billion in 1999-2000.
Exports of cotton made-ups have also shown a
steady growth over the years, rising from US$305.67
million in 1992-93 to US$ 1005.3 million in 1999-
2000, representing an increase of 229% during this
period.

Wool And Woollen Sector

India’s production of wool and woollen textiles, though

a tiny percentage of the world production, has some
inherent strengths with a capacity to give the
consumers exclusive/niche products based on
traditional designs and colours. Indian shawls,
especially, hand-embroidered ones and Pashmina
shawls are finding a very good market in the world.
Indian woollen knitwear is valued for the handwork
done on it. New blends like wool/lycra, Australian
sports wool and optim fibre are the major thrust
blends which will find emerging goods markets for
knitwears and shawls.

Silk Sector

India has the distinction of being the only country in

the world to produce all the commercially known
varieties of silk – Mulberry, Tasar, Eri and Muga. The
production of Mulberry raw silk during 2001 has been
14000 tons. The main items being produced in India
are mixed/blended silk fabrics, dress material, saris,
scarves, stoles, cushion covers, bedspreads, carpets
and silk garments. The total export of silk items is
USD 400 million. The USA and the EU import about
two-thirds of the silk textiles exported from India. The
other markets are the Middle East (for traditional
sarees), Singapore, Hong Kong, Japan, Australia and
South Africa.

TEXTILES TRADE STRENGHTS

Contrary to the global trends towards integration and

economies of scale, the Indian textile Industry is a
unique case of disintegration. There are 2290 players
in the organized spinning sector; only 278 composite
mills and thousands of weaving units, 14500
independent processing units and innumerable
garment manufacturers and countless retailers. India
has the largest cotton acreage in the world, and
cotton is the dominant fibre in the Indian industry.
Almost all cotton used in India is grown locally.

1. Large Production Base

India is a producer and exporter of quality textiles and

apparels. India has a large production base with
integrated mill sector, State of the art Apparel
manufacturers, Powerlooms, Handlooms, Knitters and
spinners.

2. Wide Product Range

India produces almost all types of fibers and yarns

and has achieved near self sufficiency in some
sectors such as those producing polyester fiber and
filament yarn. India offers a trendiest range of
apparels, alluring range of made-ups and exotic range
of fabrics to discerning international buyers.

3. Modern Technology

The textile and apparel industry in India employs

modern technology in production. This is especially
visible in the case of the raw material, i.e. yarn and
fiber, producing sectors, which in turn is reflected in
the high quality of products comparable to reputed
international brands.

4. Competitiveness

The industry enjoys cost advantages due to creation

of huge production capacities. Indian items are
competing with products of such textile giants like
Japan, Korea and Taiwan and have come out on top.
The secret of India's success lies in the unmistakable
quality of its textiles, competitive prices and reliable
supply.

5. Unique Advantages to Importers

Textiles and Apparel Industry in India has certain

unique advantages which are beneficial to overseas
buyers.

a) With centuries old tradition, industry has

perfected the art and science to produce
exquisite goods.
b) Industry is self sufficient and vertically integrated.
c) Diversified small lot production system which can
cope better with the changes in fashion
demands, short response time and smaller lots
offered.
d) Also capable of catering to volume orders.
e) Wide range of production including sophisticated
high qualities as well as those required for middle
and low end consumers.
6. Made-up Articles - specialty items

Exports of made-ups have been increasing at a

steady pace. India offers an alluring range of made-up
items like scarves/stoles/pupates and ordains in
exotic shades, intricate patterns and magical finishes.
Dyed, printed and embroidered dupattas/odhanies in
metallic stripes, sequins and pearl/bead works which
are in great demand in the Arab world is a specialty of
India.

QUOTAS & QUOTA RELATED PROBLEMS

Nearly 80% of Indian clothing exports go to the US

and EU where they face quota restrictions. A lesser
percentage of total textile exports are subject to
quotas. During the course of the first two Multifiber
Arrangements in the 1970s, Indian exporting firms
enjoyed a relatively unrestricted growth, since their
export quantities had not reached the limits set by the
quotas. However, during the third phase, some
quotas started to bite. By 1987, apparel exports were
curtailed by quota ceilings for most categories.

The Uruguay round of multilateral negotiations

brought the Multi-fiber Arrangement to an end and the
WTO members agreed to enter into reciprocal and
mutually advantageous arrangements directed to the
substantial reduction of tariffs and other barriers to
trade and to the elimination of discriminatory
treatment in international trade relations.
Although the integration schedule and quota phase-
out under ATC was originally intended to be a gradual
affair, it has actually been followed in letter only and
not in spirit. The developed countries have not
integrated items of “commercial significance” into the
world trading system even after 70% of the period of
integration schedule is over. Consequently, the most
intensive items like shirts and women’s outerwear, in
which India has an advantage, will not have their
quotas removed until 2005 leading to a problem of
uncompetitive prices, pushed higher by the cost of
paying for quotas.

The two largest restraining Members USA and EU

have not taken any specific measures to facilitate
increased competition in their markets. On the
contrary, at the very beginning of integration process,
the US administration announced its policy to
postpone integration of the large bulk of restrained
products until the end of the transitional period of the
ATC. The EU, on its part, has insisted on additional
reciprocal market opening commitments by
developing countries before it could consider any
meaningful liberalization of its restrictions. India
signed bilateral agreements with the EU and US to
secure reciprocal market access for textiles and
opened its markets to foreign goods by removing
import restrictions on textiles such as fibers, yarns
and industrial fabrics, as well as reducing its tariffs.
IMPACT OF FREE TRADE, PREFERENTIAL
TRADE AGREEMENTS & RULES OF ORIGIN

The agreements under the World Trade Organization

will have their deepest impact on the Indian textile
and clothing industry. The reason is obvious: It is one
of the biggest sectors of the economy. It is the only
industry that is self-reliant and complete in the value
chain - from raw material to the highest value added
products. Consequently, the growth of this industry
has a significant bearing on the overall development
of the economy. The impact of liberalization through
WTO on Indian Textile market is yet to be
experienced in a big way since most of the
liberalization under ATC is ‘back loaded’ and will take
place in the last year i.e. 1.1.2005. As it stands out
India has already lowered duties substantially below
committed levels and opened its market while the EU
and US has so far integrated insignificant products
and the most important products would be integrated
in the year 2005. Textile companies are already
complaining of the ‘Chinese’ onslaught in this sector.

A major offshoot of the free trade regime is the

frequent use of the anti dumping and anti subsidy
action by the developed countries. The European
Commission (EC) has been particularly active in this
regard. In the last decade, the EC has initiated
proceedings on PTY, PSF, Polyester Spun Yarn and
Polyester Staple fiber fabrics originating from
developing countries including India.
The repeated recourse to such investigations and back to
back investigation has resulted in losses for business and
caused considerable damage to trade and competition. In
fact anti-dumping levies are far more lethal than quota
restraints especially as they have the potential to restrict
sales and erode competitive edge in view of the direct
impact on the price of the product. There has been sharp
decline in imports from countries whose companies had
been targeted for alleged dumping. Besides, an anti-
dumping/anti-subsidy investigation entails significant
financial burden on the targeted companies.

PREFERENTIAL TRADE AGREEMENTS

The General System of Preferences (GSP) is an

agreed exception to the MFN principle under which
the Donor Country grants preferential duty on goods
originating in beneficiary country which is lower than
the normal MFN duty. Each donor country is free to
decide the level of concessions, the choice of goods
and the rules of origin in respect of GSP.
Consequently, most GSP schemes are different from
each other in terms of the goods covered, the level of
duty concession, the procedure to be used and the
rules of origin that apply.

The EU GSP scheme extends duty benefit to the

developing countries and provides special incentives
to promote core labor and environmental standards.
The textile sector in India is not eligible for EU GSP
benefits while the same benefits are extended to
China, Indonesia, Malaysia, Sri Lanka and Thailand.
However, the apparel sector in India benefits from EU
GSP scheme. But the concessions of duty free
access granted to Pakistan recently on account of
drug policy would increase the unhealthy competition
and push the prices down in apparel sector.

The expansion of regional trade arrangements like

NAFTA, growing preferential arrangements with
targeted regions and countries under Arrangements
like Trade Development Act 2000 of the USA, EU's
enlargement programme to include Central & Eastern
Europe & Mediterranean rim countries etc., would act
as insurmountable barriers to global free trade
resulting in adverse effect on Indian exports.

In fact data relating to imports of textiles and clothing

into USA shows that the share of imports from
countries covered by preferential trade arrangements
have increased from 19.5% in 1994 to 31.7% in the
year 2000.

RULES OF ORIGIN

Rules of Origin are unilaterally altered by the

developed countries to the detriment of developing
exporting countries. Unilateral changes in Rules of
Origin by USA have affected the trade of textiles and
clothing badly. As part of its legislation implementing
the results of Uruguay Round, the US substantially
altered its rules for determining the origin of textiles
and clothing products. The modified rules, put into
effect from July 1996, resulted in major changes
disadvantageous to developing countries. Since the
process of harmonization of Rules of Origin of various
countries is being undertaken in the Committee on
Rules of Origin, no member country should be
allowed to make any further changes in their Rules of
Origin till the harmonization process is completed.

FUTURE PERSPECTIVES

In the midst of liberalization under WTO framework,

the future perspective of Indian Textile & Apparel
Industry in post GATT era can be summarized as
under:

♦ Exports of textile and apparel products will be

quota-free and will only be based on market
considerations namely product attributes, pricing,
promotion such as advertising, brand building and
other sales promotion techniques, physical
distribution – its cost and logistics decisions. The
quota restriction removal will increase both national
and international competition; this being at a
possible higher level than the demand may mean
lower volumes and values.

♦ The complete elimination of the Multi-Fiber

Arrangement (MFA) quota regime with effect from
January 1, 2005, as per the ATC, may create a
`shock-wave' which could end up disrupting the
entire world textile and garment trade. Since the
quota phase-out schedule, as drawn up by
 industrialized countries, is heavily back-loaded with
most sensitive textile items not being freed from
quantitative restrictions (QRs) till the very end of the
transition period, there would be a sudden release
of `pent-up supply pressure' which could lead to
intensified price competition and declining global
prices. A taste of things to come has already been
experienced in the wake of the 1997 Asian financial
crisis, as devaluation greatly enhanced
competitiveness and prices crashed across Asia, as
producers in the region over-supplied the world.

♦ It may be unlikely that the developed countries will

completely open their trade doors after the MFA
phase out. The restrictions on import into those
countries may come in the form of non-tariff barriers
/ measures such as based on environmental
issues, child labor, and health and so on. While the
importing countries continue to set high standards,
Indian exporters are making the necessary
adjustments to meet these new standards.

♦ The challenges that the Indian exporters face is not

only from trade barriers in developed countries. The
removal of quotas which have been restricting
imports from specific sources means freer
competition among exporters. The EU and US will
buy from the lowest cost suppliers, and India may
often, but not always, be among them. However,
the industry has made considerable adjustments in
order to maintain its international competitiveness.
♦ The GATT is aimed to reduce the levels of
subsidies. The present export incentives and
subsidies will be reduced, resulting in an escalation
of the cost of production. The impact would be felt
across different sectors, especially textiles and
clothing. Export of handloom fabrics may suffer a
setback due to lower or no subsidies and hence its
competitive advantage will lie in its unique design
capabilities.

♦ Due to the reduction in import duties of synthetics,

the power loom sector can strengthen its
competence on the cost front. The organized mill
sector will have to restructure and emerge, inter-
alias, as a major supplier of fabrics to the garment
industry.
Foreign Involvement

1) Foreign investment in
production and export exist but in a very
limited way.

2) Government is relaxing rules

for FDI (Foreign Direct Investment) and
making it more conducive and liberal.

3) Our present policies are also in

favor of FDI and encoring by making the
policies less cumbersome.

4) At present Foreign
investment are there in finish fabrics and
garment sectors and also in textile
machinery sector.

5) The EOU (Export Oriented

Units) are giving benefit to attract
foreign investment.
History during the industrial revolution
Textile manufacture during the Industrial Revolution
The key British industry at the beginning of the
18th century was the production of textiles
made with wool from the large sheep-farming
areas in the Midlands and across the country
(created as a result of land-clearance and
enclosure). Handlooms and spinning wheels
were the tools of the trade of the weavers in
their cottages, and this was a labour-intensive
activity providing employment throughout
Britain, with major centers being the West
Country; Norwich and environs; and the West
Riding of Yorkshire. The export trade in woolen
goods accounted for more than a quarter of
British exports during most of the 18th
century, doubling between 1701 and 1770 [1].
Exports of the cotton industry – centered in
Lancashire – had grown tenfold during this
time, but still accounted for only a tenth of the
value of the woolen trade.
The textile industry grew out of the industrial
revolution in the 18th Century as mass
production of clothing became a mainstream
industry. Starting with the flying shuttle in
1733 inventions were made to speed up the
textile manufacturing process. In 1738 Lewis
Paul and John Wyatt patented the Roller
Spinning machine and the flyer-and-bobbin
system. Lewis Paul invented a carding machine
in 1748, and by 1764 the spinning jenny had
also been invented. In 1771, Richard Arkwright
used waterwheels to power looms for the
production of cotton cloth, his invention
becoming known as the water frame. In 1784,
Edmund Cartwright invented the power loom.
With the spinning and weaving process now
mechanized, cotton mills cropped up all over
the North West of England, most notably in
Manchester and its surrounding towns of
Ashton-Under-Lyne, Stalybridge and
Dukinfield.
Textile mills originally got their power from
water wheels, and thus had to be situated
along a river. With the invention of the steam
engine, in the 1760s to 1800s, mills no longer
needed to be along rivers.

Post industrial revolution

Many of the cotton mills, like the one in Lowell
MA, in the US originally started with the
intention of hiring local farm girls for a few
years. The mill job was designed to give them
a bit more money before they went back to the
farm life. With the inflow of cheap labor from
Ireland during the potato famine, the setup
changed, as the girls became easily
replaceable. Cotton mills were full of the loud
clanking of the looms, as well as lint and
cotton fiber. When the mills were first built, a
worker would work anywhere from one to four
looms. As the design for the loom improved so
that it stopped itself whenever a thread broke,
and automatically refilled the shuttle, the
number of machines a worker could work
increased to up to 50.
Originally, power looms were shuttle-operated
but in the early part of the 20th century the
faster and more efficient shuttle less loom
came into use. Today, advances in technology
have produced a variety of looms designed to
maximize production for specific types of
material. The most common of these are air-
jet looms and water-jet looms. Industrial
looms can weave at speeds of six rows per
second and faster.
By the later 20th Century, the industry in the
developed world had developed a bad
reputation, often involving immigrants in illegal
"sweat shops" full of people working on textile
manufacturing and sewing machines being paid
less than minimum wages. This trend has
resulted due to attempts to protect existing
industries which are being challenged by
developing countries in South East Asia, the
Indian subcontinent and more recently, Central
America. Whilst globalization has seen the
manufacturing outsourced to overseas labor
markets, there has been a trend for the areas
historically associated with the trade to shift
focus to the more white collar associated
industries of fashion design, fashion modeling
and retail.
Areas historically involved heavily in the "rag
trade" include London and Milan in Europe, So
district in New York City, the Flinders Lane and
Richmond.
Example of textile industries in India.
• Indogulf Company

• NIRMA STAINLESS STEEL

• Balaji Overseas
• Keshavlal Mangubhai &
Co(Woodking24-india)
• EURO BRIDGE
• HYDRODRIVE SYSTEMS AND
CONTROLS PVT LTD
• Manhar specialties
• Linden Exports
• Faizan international
• One By One Cotton
• Linden Exports
• Charbhuja Derivatives
• DANUBE FASHIONS LTD
• Deep Incorporation
• CSM EXPORTS
• Spot Globo
• Amco Industries Ltd.
Distribution of textile sectors in Indian market:

Problems faced by Indian textile industries

according to “TIMES OF INDIA REPORT” on
July 05, 2007:
Textile Composition In World Market:
• Productivity indices for textile industries
in India: