TS005-Competitiveness of Indian Textile Industry

Competitiveness of Indian Textile Industry
Shrushti Biradar
Department of Textile Technology
DKTE Engineering College, Icchalkaranji, India
The textile industry employs about 105 million people directly and indirectly. India’s overall textile exports during FY 2017-18 stood at US$ 37.74 billion. The Indian textiles industry is extremely varied, right from fiber to fashion. The Indian textiles industry, currently estimated at around US$ 150 billion, is expected to reach US$ 230 billion by 2020. The Indian Textile Industry contributes approximately 2% to India’s Gross Domestic Product (GDP), 10% of manufacturing production and 14% to overall Index of Industrial Production (IIP). The industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 2.82 billion during April 2000 to December 2017. Indian Textile Industry is performing very well although there is huge competitiveness of Indian Textile Industry.

Industry Competitiveness of Indian Textile Industry is very high because, there is a high threat of substitutes, higher bargaining power of buyers, high competitive rivalry, and high threat of new entrants. All of these situations are creating a negative impact on the textile industry. Only positive things are there is low bargaining power of suppliers.

Opportunities for Indian textiles:
Technical textiles: The Technical Textile Industry in India has witnessed one of the fastest growing rates in the recent years and is expected to reach USD 32 billion by 2023, representing CAGR of 9.6% during 2014-2023.
Apparel: The global apparel market size is expected to reach $2.6 trillion in 2025 growing by a projected rate of 4%. By 2025, India will be the second most attractive apparel market adding Around $121 bn in the world.
Machine manufacturing: According to the report of Textile Ministry of India till the year 2012-13 the production of textile machinery was Rs5280 Cr. Indian Market has a lot much potential to be in the machine manufacturing field and has a great future in it.
E-commerce: The growth of Indian E-Commerce companies provides opportunities for the Indian textile industry in the domestic as well as international market. Amazon, Flipkart, Jabong, and Myntra are some of the examples of E-commerce.

Challenges faced by Indian textiles:
Scale : Except for spinning, all  other sectors suffer from the problem of scale .Indian firms are typically smaller than their Chinese or Thai counter parts and there are fewer large firms in India .Some of the Chinese large firms have 1.5 times higher spinning capacity ,1.25 times denim (and 2 times gray fabric) capacity and about 6 times more  revenue in garment than their counter parts in India there by affecting the cost structure  as well as ability to attract customers with large orders .
Skills : 
Three issues must be mentioned here:
  • There is a paucity of technical manpower –there exist barely 30 programmes at graduate engineering (including diploma) levels graduating about 1000 students this is insufficient for bringing about technological change in sector.
  • Indian firms invest very little in training its existing workforce and skills are limited to existing processes.
  • There is acute shortage of trained operators and supervisiors in india.

Cycle : Cycle time is the key to competitiveness of firm as it affects both price and delivery schedule.Cycle time reduction is strongly correlated with high first pass yield, high throughput times, low variability in the process times.
Innovation and technology: A review of the products imported from china to USA during January –April 2005 reveals that the top three products in terms of percentage imports were tire cords and tire fabrics .none of these items exported from India has gained profit. Hence entry of newer application domains of industrial textiles, nano textiles, home furnishings, etc. becomes imperative we are to grow beyond 5-6% of global market.
Domestic market: the Indian domestic market for all textile and apparel products is estimated at  $26 bn and growing. while the market is very comparatitive at the low end of the value chain, the mid or the high ranges are over priced. However the firms are not taking advantage of large domestic market in generating economics of scale to deliver cost advantage in export markets.

India in world textiles:
  • High interest rates, lack of credit, high raw material prices and recession in the US and Europe have hurt the countries cotton textile industry according to the economic survey. Hence these factors lead to decline in textile fabric production by 1.9 percent to 54,966 million square meters in 2008-2009.
  • The power loom sector and the handloom sector saw a decline in production by 3.1 percent and 3.9 percent respectively in 2008-09 over year .
  • The hosiery industry saw the modest increase of 2.3 percent and mill sector registered a marginal growth rate of 0.8 percent in last fiscal compared to the previous years.
  • The textile export declined by about 10 percent in 2008-09 to about $20 billion in demand in economies like US and Europe .the textile industry suffered a lot due to increase in the raw material cost. Among the textile export the worst hit was handicrafts, which saw decline of 48%in 2008-09 followed bycotton yarn and jute products which fell by 11.8 percent and 9.5 percent.
  • Indian textile exports declined marginally to $36.26billion from $37.14 billion recorded in the year 2014-15. In apparel, Bangladesh’s export to the US grew by whopping 12% in 2015 while the Vietnam did even better as its exports rose by 14% . India ,on the other  saw its export grow just by 8%

How to Deal with Industry Competition?
  • To deal with extensive industrial competition, the textile industry in India needs to focus on the following matters:
  • There is need to learn how to handle the competition.
  • Knowing your costumer is one of the basic requirements of the industry. By knowing your costumer, you can build a relationship between them and your company.
  • To understand your competition, it is most important to begin by examining the market place.
  • Branding and messaging are the two important criteria in building the industry. Your branding should support all messaging, leaving no question.
  • There is need in exploring the new market for maintaining the place in the competition.
  • The industry must be simultaneously concentrating on bringing the innovative ideas.

Hence, the Indian textile industry lacks behind in the world competition. The measures should be taken so that the Indian textile to be developed among the other countries. To be a developed country the textile industry should have some innovative ideas, working culture, costumer focus and local market inculcated in the process. The several measures should be taken to raise the economy of the country.


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    1. This comment has been removed by the author.

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