SEMINAR REPORT ON TEXTILE INDUSTRY

Presented By: Raghav sem Geeta MBA-3rd

ABOUT TEXTILE INDUSTRY

Textile Industry is one of the largest and oldest industries in India. Textile Industry in India stands at unique place and has maintained a sustainable growth over the years. This is a self-reliant and independent industry and has great diversification and versatility. Textile Industry in India provides great contribution for the development of economy. It is the second largest textile industry in the world after China. It is a Largest Gross and Net foreign exchange earner. After agriculture this industry provides employment to maximum number of people in India employing 35 million people. Textile Industry contributes around 4% of GDP, 9% of excise collections, 18% of employment in industrial sector, and has 16 % share in countrys export. Indian Textile Industry is valued at US $ 36 bn.

INDIAN TEXTILE INDUSTRY

Indian Textile Industry plays vital role in country's economic development and contributes 14% to industrial production in the country. Indian textile traditions are reputed all over the world and admired for their beauty, texture and durability. 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. India had numerous trade links with the outside world.

The development of Indian Textile industry started in 1985.India earns about 27% of its total foreign exchange through textile exports. In the year 2000, National Textile Policy was announced.
In

TEXTILE PRODUCTS

Applique Work India Baluchari Tradition Banarasi Sari Bandhej Batik Printing Indian Saree Bangal Handlooms Block Walls Block Impressions Brocade Silk

Contd
Gujarat Textiles Embrodiery Gujarat India Handlooms Jaipuri Quilt Magic weavers Paithani Sari Panipat Handloom Block Printings Fantasies In Gold

SEGMENTS OF INDIAN TEXTILE INDUSTRY

VARIOUS CATAGORIES IN TEXTILE INDUSTRY:

Cotton

Textiles Silk Textiles Woolen Textiles Readymade Garments Hand-crafted Textiles Jute

CURRENT FACTS ON INDIAN TEXTILE INDUSTRY

India retained its position as worlds second highest cotton producer. Acreage under cotton reduced about 1% during 2008-09. The productivity of cotton which was growing up over the years has decreased in 2008-09. Significant increase of Minimum Support Prices (MSPs). Cotton exports couldn't pick up owing to inequality in domestic and international cotton prices. Imports of cotton were limited to shortage in supply of Extra Long staple cottons.

STRUCTURE OF TEXTILE INDUSTRY

The Indian Textile industry is highly fragmented sector. Industry is fully vertically integrated across the whole value chain and interconnected with various operations. Textile Industry comprises small-scale, mediumscale, large-scale, non-integrated, spinning, weaving, finishing, and apparel-making firms and enterprises. This is an unorganized sector and includes Handlooms, Powerloom, Hosiery, Knitting, Readymade Garments, Khadi, Carpet and Handicrafts manufacturing units. The organized Mill Sector comprises of spinning Mills, and Composite Mills where spinning, weaving, and processing activities are done.

CONTD

The Fibre and Yarn Sector of the textile industry includes Textile Fibers, Natural Fibers such as Cotton, Jute, Silk and Wool; Synthetic / ManMade fibers such as Polyester, Viscose, Nylon, Acrylic and Polypropylene. The Man-Made Textile Sector includes Fibre and Filament Yarn manufacturing units of Cellulosic and Non-Cellulosic origin. The Cellulosic Fibre/yarn Industry is controlled by the Ministry of Textiles, and the Non-Cellulosic Industry is controlled by the Ministry of Chemicals and Fertilizers. India is the largest producer of Jute, the 2nd largest producer of Silk, the 3rd largest producer of Cotton and Cellulosic Fibre/Yarn and 5th largest producer of Synthetic Fibers/Yarn

DISTRIBUTION CHANNEL

In Indian Textile Industry products are distributed mainly through following intermediaries as a part of Distribution Network:

Importers. Indenting Agents Distributors. Wholesalers. Retailers. Dealers Commission Agent

TRADE POLICIES:

Tariff policy
India & US have reached on an Agreement for reciprocal market access commitments for Textiles and Apparel with the negotiation of the WTO.Agreement on Textile & Clothing. It provides elimination of Quota system of Textiles & Apparel from 1st January 2005. Under Indo-US Agreement of 1st January 1995, India agreed to reduce tariffs on Textile & apparel and remove all the restrictions on these products. From 1st April 2000, Govt. Of India reduced tariffs on: . Manmade Fibers & Filament Yarns from 35% to 20% Cotton Yarn from 25% to 20% Spun, Blended, and Woolen Yarn from 40% to 20 % India agreed to bind its tariffs on 265 textile & apparel products (Textured Yarns of Nylon & Polyester, Filament Fabrics, Sportswear, and Home Textiles.) Apparel products are free from Excise Duties & various Taxes.

Import Licensing: India has liberalized its Import regime for Textiles and apparel, but some of the part is still limited for market access. Currently, there is no import restriction for yarns & fabrics items. Apparel & Made-up textiles goods require a Special Import License (SIL). Govt. revised Exim Policy on 31st March 1999 by eliminating Import Licensing Requirements for 894 consumer goods, agriculture products and textiles. On 28th December 1999 India and Us signed an Agreement for the elimination of import restrictions of 1,429 agriculture, textiles, consumer goods and apparel. India removed restrictions on 715 tariff items as of 1st April 2000.

Custom Procedures: Marking, Labeling, and Packaging Requirements: Marking, Labeling, and Packaging Requirements for Textile products are technically complex and difficult to implement. According to textile regulation passed on 22nd july 1998 by GOI, Yarns, and Fabrics to have the statutory markings and these markings should not mislead the consumers. For instance, Cloths must be remarked with the name & address of manufacturer, a description of cloth, sort number, length in meters and width in centimeters, and washing instructions. The Man made fiber cloth must indicate whether it is made by spun or filament yarn. The month & year of packaging, the exact composition of cloth. The Marking must appear on the face plait of each piece of cloth. The language for marking must be in Hindi and English with international numerals.

EXIM Policies: Duty Entitlement Passbook Scheme: DEPS is available for Indian Export Companies and Traders on a Pre-Export and Post-Export basis. Pre-Export credit requires the beneficiary firm has exported during the preceding 3-year period. The Post-Export credit is a transferable credit that exporters of finished goods can use to pay or offset custom duties on imports of any unrestricted goods. Export Promotion Capital Goods Scheme: This scheme is available to export companies and traders who provide the GOI with information about which type of goods and what value of Capital Goods they will import. And they also inform what will be the outcome of export they expect to produce from those imports. Depending upon the export commitment GOI provides them a license to import capital goods dutyfree or preferential rates of duty. Pre and Post Shipment Financing: The Reserve Bank of India provides Indian Exporters Pre-Shipment Financing through commercial banks for purchasing raw materials and packaging materials by presenting Letter of Credit. RBI also0 provides Post-Shipment Financing through commercial banks at preferential rates by presenting export documents. Export and Special Economic Zones: Govt. of India has established Export Processing Zones (EPZs) and Special Economic Zones (SEZs). In EPZs units can import goods free of custom duty. There is 5-year tax holiday to any industrial unit in EPZs. Govt. has allowed 100% Fore3ign ownership of units under EPZs and SEZs. The Govt. considers SEZs as foreign territory for trade and tariff purpose. Units under SEZs may engage in Manufacturing, Trading and Services. Units are exempt from routine checking of exports by customs, and they can sell in the domestic market on payment of duty as applicable to imported goods. Duty Drawback Scheme: The basic objective of this scheme is to reduce the indirect taxes on exports. Exporters can get refund of the excise and import duty. Through this scheme they can be more competitive and have more potential market

SWOT ANALYSIS OF TEXTILE INDUSTRY:

STRENGTHS:

Abundant Raw Material availability that helps industry to control costs and reduces the lead-time across the operation. Availability of Low Cost and Skilled Manpower provides competitive advantage to industry. Availability of large varieties of cotton fiber and has a fast growing synthetic fiber industry. India has great advantage in Spinning Sector and has a presence in all process of operation and value chain. India is one of the largest exporters of Yarn in international market and contributes around 25% share of the global trade in Cotton Yarn. The Apparel Industry is one of largest foreign revenue contributor and holds 12% of the countrys total export. Industry has large and diversified segments that provide wide variety of products. Growing Economy and Potential Domestic and International Market. Industry has Manufacturing Flexibility that helps to increase the productivity. Flexibility in production of small order lots.

WEAKNESSES:

Indian Textile Industry is highly Fragmented Industry. Industry is highly dependent on Cotton. Lower Productivity in various segments. There is Declining in Mill Segment. Lack of Technological Development that affect the productivity and other activities in whole value chain. Infrastructural Bottlenecks and Efficiency such as, Transaction Time at Ports and transportation Time. Unfavorable labor Laws. Lack of Trade Membership, which restrict to tap other potential market. Lacking to generate Economies of Scale. Higher Indirect Taxes, Power and Interest Rates.

OPPURTUNUTIES:

Growth rate of Domestic Textile Industry is 6-8% per annum. Large, Potential Domestic and International Market. Understanding buyers need because of language advantage. Elimination of Quota Restriction leads to greater Market Development. Market is gradually shifting towards Branded Readymade Garment. Increased Disposable Income and Purchasing Power of Indian Customer opens New Market Development. Emerging Retail Industry and Malls provide huge opportunities for the Apparel, Handicraft and other segments of the industry. Greater Investment and FDI opportunities are available.

THREATS:

Competition from other developing countries, especially China. Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world. Elimination of Quota system will lead to fluctuations in Export Demand. Threat for Traditional Market for Powerloom and Handloom Products and forcing them for product diversification. Geographical Disadvantages. International labour and Environmental Laws. To balance the demand and supply. To make balance between price and quality.

MAJOR PLAYERS OF TEXTILE INDUSTRY:

Following are some major players in the vast field of Indian Textile Industry.

Arvind

Mills Raymonds Reliance Textiles Bombay Dyeing Linear Design Private Limited

ARVIND MILLS

Arvind Mills is one of the major and fully vertically integrated composite mills player in India. It has large production in denim, shirting and knitted garments. It is now adding value by manufacturing denim apparel. Its sales are around US$ 300 million.

RAYMONDS

Raymonds has the large, diversified integrated business model, which is spread across the value chain from yarn to retail. It is specialized in Diversified woolen textiles. It already supplies to some US retailers. It also looking to also expanding denim capacity and to become second largest denim player in India. Its presence in retail will be big positive in future. Its annual sales are around US$ 300 millions

RELIANCE TEXTILES

Reliance Textiles is one of the major Textile Company that is in business of fully integrated manmade fiber. It has capacity of more than 6 million tones per year. It has joint venture partners like, DuPont, Stone & Webster, Sinco (Italy) etc.

LINEAR DESIGN PVT.LTD

Linear Design Pvt. Ltd. is a textiles trading house covering the entire gamut from yarns and fabrics to readymade garments. We are currently facilitating both national & international trade for a range of products and specifications. Since our inception in 1988 we have developed an extensive network of customers and suppliers in more than 25 countries. A strong & experienced team ensures that your requirements are sourced at competitive rates with adherence to quality and timelines.

BOMBAY DYEING

Bombay Dyeing is one of Indias largest producers of textiles. The company is one of the largest and oldest textile companies in the country. It manufactures cotton and blended textiles. Product mix comprises suitings, shirtings, sarees, towels and bed linen. The company was formed on 23 August 1879 by Nowrosjee Wadia, a dye works near Mahim. This was the mill, which first started dyeing of yarn in India. Bombay Dyeing Mfg. Co. Ltd.was set up in 1895. Nowrosjee Wadia & Sons become the managing agents in 1898