SUMMARY OF INDUSTRY

Indian Scenario
The textile industry occupies a unique position in the Indian economy as it contributes significantly to the
industrial production, employment generation and foreign exchange earnings. Currently, it adds about 14
per cent to the industrial production and about 4 per cent to the GDP. 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. It provides direct employment to about 35 million people. In fact, the textile
industry is the second largest provider of employment after agriculture. The contribution of this industry to
the gross export earnings of the country is about 21 per cent. It is the only industry, which is self–reliant
and complete in value chain i.e. from raw material to the highest value added products – garments / madeups.
Therefore, the growth and development of this industry has a significant bearing on the overall
development of the Indian economy. The Indian textile industry is extremely complex and varied. This
industry uses natural fibres – cotton, jute, silk and wool, as well as synthetic / man–made fibres – polyester,
viscose nylon, acrylic and their multiple blends. The complex and varied structure of the industry coupled
with its close linkage with our ancient culture and tradition provides it with the unique capacity to produce,
with the help of latest technological inputs and design capability, a wide variety of products suitable to the
varying consumer tastes and preferences, both within the country and overseas. The textile industry has
shown remarkable resilience and has grown considerably in terms of installed spindleage, yarn production
and output of fabrics and garments.
[Source: www.texmin.nic.in]
Indian textile and apparel industry is one of the largest in the world with US$ 19 billion of export and US$
30 billion of domestic textile and apparel during 2006-07 (P). The industry has, over the years, contributed
significantly to national output, employment and exports. At present, industry accounts for about 14% of
our total industrial production and contributes nearly 15% of total exports. It provides direct employment to
about 35 million people and another 56 million are engaged in allied activities. The textile export has
registered a growth of 10 percent to 19.24 billion during 2006-07 (P) from US$ 17.85 billion during 2005-
06. The Industry has a potential to reach a size of US$ 85 billion by 2010. With its consistent growth
performance and abundant cheap skilled manpower, there are enormous opportunities both for domestic
and foreign investors to make investments in textile sector in India.
[Ministry of Textiles, Government if India]
Growth and development of this industry has a significant bearing on the overall development of the Indian
economy.
World Scenario:
The global textile and clothing industry is worth over US$ 4,395 billion, with clothing accounting for 60%
of the market and textiles the remaining 40%. Global trade in textile and clothing is currently at US$ 356
billion and is expected to grow to US$ 600 billion by 2010. The bulk of the increase is expected to be in
clothing. The global textile trade in 2003 was USD 395 billion consisting of global exports of textile and
garments at USD 169 billion and USD 226 billion respectively. At US$ 395 billion, global textile trade
contributes 5.4% of the total international trade. The industry is highly fragmented in terms of geography
and size. There has also been a traditional divide between the various segments of the Industry.
[Source: WTO International Trade Statistics Book-2004]
2
In view of labour intensive nature of the textile industry, in the last fifty years the industry has shifted its
base several times and concentrated to those countries, which offered most competitive labour cost
structure. Developed countries such as USA and the EU have started downsizing capacities in view of their
higher cost of manufacturing compared to countries such as India, Pakistan, China and Indonesia. The
relocation is also on account of environmental concerns. This is expected to provide developing countries
with an opportunity to penetrate US and EU markets and enhance their export share in these markets.
However, the migration of textile capacity will be influenced by objective competitive factors and will be
hampered by presence of distorting domestic measures and weak infrastructure of the developing countries.
India is the second most preferred textile destination after China. Our major advantages in textile are easy
availability of raw material, spinning, weaving and garmenting capabilities. The major importers of Indian
textiles are USA, UK, UAE, Germany and many more. Almost 80% of shipments are sent to the US and
the European countries. Though these products are gaining importance in the US but competition faced
from China can not be ignored.
Structure of the Textile Industry
Textile Industry is unique in the sense that it is an independent industry, from the basic requirement of raw
materials to the final products, with huge value-addition at every stage of processing. Textile industry in
India has vast potential for creation of employment opportunities in the agricultural, industrial, organised
and decentralised sectors & rural and urban areas, particularly for women and the disadvantaged. Indian
textile industry is constituted of the following segments: Readymade garments, cotton textiles including
handlooms, man-made textiles, silk textiles, woolen textiles, handicrafts, coir and Jute.
The textile industry is one of the oldest and largest industry in India and is highly fragmented. It is divided
in four segments spinning, weaving, processing and garmenting. Indian textile industry comprises of two
sectors, the organized sector consisting of modern and highly mechanized mills and the unorganized sector
consisting of the small-scale powerloom sector and the highly fragmented handloom (hand spinning and
hand weaving) sector.
Indian textile industry can basically be categorized into two sections:-
• Organized Textile Industry
• Unorganized Textile Industry
Unorganized sector primarily uses the orthodox practices (woven or spurn) in cloth production and is
labour intensive in nature. The industry is characterized by the production of clothes either through
weaving or spinning using hands. The decentralised nature is another significant characteristic of the
unorganized textile industry in India.
• Sub-sectorial categorization of Indian textile industry : -
• Textile industry based on fiber produced through man made means or natural cotton.
• Yarn industry utilizing fiber or filament of man made type.
• Textile industry involved in production of wool, its derivatives and final woolen products.
• Production, processing of Jute and the textile industry based on it.
• Textile industry involved in the mass production of natural silk along with derivative and final
products from silk
• Handloom industry - Handicrafts industry which is basically unorganized in nature

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