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Textile Industry In India

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The textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports and is the second largest employment generator after agriculture.

Textile Industry is providing one of the most basic needs of people and the holds importance; maintaining sustained growth for improving quality of life. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it is a major contribution to the country's economy.

Indian textile industry has the highest loomage including handlooms in the world. It contributes about 61% to the world loomage. It also contributes about 12% to the world production of textile fibres and yarns including jute. It is the largest producer of jute, second largest producer of silk, third largest producer of cotton and cellulosic fibre/yarn and fifth largest producer of synthetic fibres/yarns.


Demographic trends in India are changing with increase in disposable income levels, consumer awareness and tendency to spend. According to the National Council of Applied Economic Research (NCAER) data, the Consuming Class, with an annual income of US$ 980 or above, is growing and is expected to constitute over 80% of the population by 2009-10. There is a change in the consumer mindset that has led to a trend of increased consumption on personal care and lifestyle products as well as branded products. These trends offer great growth opportunities for companies across various sectors, including textiles.

Supporting the increasing demand for consumption is the revolution taking place in India's retail sector. Organized retail is playing a key role in structuring the Indian domestic market, reinforced by the rapid rise of supermarkets, malls, theme stores and franchises across urban India. India presents a large and vibrant market for textiles and apparels, with a potential for sustained growth.


The Indian textile industry is one of the largest and most important sectors in the economy in terms of output, foreign exchange earnings and employment in India. It contributes 20% of industrial production, 9% of excise collections, 18% of employment in industrial sector, nearly 20% to the country's total export earnings and 4% to the Gross Domestic Product. The sector employs nearly 35 million people and is the second highest employer in the country. The textile sector also has a direct link with the rural economy and performance of major fiber crops and crafts such as cotton, wool, silk, handicrafts and handlooms, which employ millions of farmers and crafts persons in rural and semi-urban areas. It has been estimated that one out of every six households in the country depends directly or indirectly on this sector.

India has several advantages in the textile sector, including abundant availability of raw material and labour. It is the second largest player in the world cotton trade.

Favorable factor conditions give India a strong comparative advantage over other competing countries in the textile industry. Specifically, India has the following strengths:

Ð'* India has significantly lower raw material costs, wastage costs and labour costs when compared to other countries.

Ð'* Ample low priced supply of domestically produced cotton - this is a significant advantage that is currently not matched by other key countries with competitive labour costs, including China and Brazil. India not only has the largest acreage under cotton cultivation, but also produces nearly twenty-three varieties of cotton. This diversity makes India capable of catering to various segments in the world trade. Further, this inherent strength in raw material availability prevents any supply side shocks.

Ð'* Predominance of small-scale units with skilled workmen Ð'- provides increased flexibility in production.

Ð'* Availability of low cost skilled labour - provides a significant advantage for the textile industry in India in terms of increased productivity at lower costs.

Indian textile firms have leveraged this advantage to integrate their operations, either forward or backward. For example, Arvind Mills, the largest producer of blends and denim in the country and the third largest denim producer globally, supplies fabric to virtually every major clothing brand in the world, such as Levi's, Gap, Dockers and so on. Three years ago it integrated forward into garment manufacturing (jeans and T-shirts), investing more than $30 million in ten new factories.


There is cut throat competition in the market, many textile brands enter the market and with a short run success they become outdated. This is because consumer tastes are changing fast due to the influence of cultural, psychological and global trends and hence they are less loyal. Many global brands are also entering the Indian market, making Indian brands clueless as to how to survive the competition. This situation necessitates the marketers to strengthen their brands for their stay in the market. This might be possible only when the marketers understand the social cultural backgrounds of the consumers.

To compete in domestic as well as global market place in the long run, the marketers must create and manage strong brands. The brand value will become a vital factor in creating loyal customers which would pose a formidable defence in the competitive market. Society attributes meaning to the products which would eventually become facts about the product over the years. These facts make up the culture of the product.

Consumers often feel the risk of unknown and also they have the tendency to reduce it by some way or other. For example, if the consumers don't know about the quality of the fabric that they intend to purchase, they would perceive the purchase decision as risky. In such situations, bringing the right product in terms of quality offers confidence to the consumers to go ahead with the purchase.

Consumers don't value the product on all parameters. They often jump into conclusion very fast and become regular in buying and using particular



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