Textile Industry.ppt

Indian Textile industry – A Comparison with China

Kavitha. R

Monisha Gayathri. R

Priyadharshini. G

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Ministry of Textiles - INDIA

• The Ministry of Textiles came into existence in 1989 after its separation from the Ministry of Commerce.

• The Ministry of Textiles is responsible for policy formulation, planning, development, export promotion and trade regulations of the textile industry.

• These include all natural and man-made cellulosic fibres that go into the making of textiles, clothing and handicrafts.

• Source: http://texmin.nic.in/

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Importance of Indian Textile industry

• Contributes 4% to the Gross Domestic Product (GDP)

• Accounts for 17% of total Exports• Is the largest employment provider after Agriculture

(82 million people direct/indirect)• Market size of the Textile industry (exports &

domestic) is US$ 89 billion.

• Source: http://www.ibef.org/industry/textiles.aspx

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Indian Textile Industry - SWOT

Strengths:•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.

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Weakness:•Lack of Technological Development that affect the productivity and other activities in whole value chain. •Lack of large production capacities, thereby comparatively high cost•Higher Power and Interest costs and inadequate power capacity

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Opportunities:•Growth rate of Domestic Textile Industry is 6-8% per annum. •Elimination of Quota Restriction leads to greater Market Development. •Greater Investment and FDI opportunities are available.•Disposable Income of Indian Customer opens New Market Development.

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Threats:•Threat for Traditional Market for Powerloom and Handloom Products and forcing them for product diversification. •Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world.

•Source: http://businessinindiaguide.blogspot.in/2012/06/indian-textile-industry-swot-analysis_30.html

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The Ministry of Textile - CHINA

• China Textile Academy (CTA) was founded in 1956 originally affiliated to the Ministry of Textile Industry.

• CTA was transformed into a large-scale high-tech enterprise directly by central government and approved by the State Council to join in GENERTEC in 2009.

• CTA provides enterprises with technical support and technical consulting, promote the transfer of technological achievement, textile standards, metrology and testing.

• Source: http://www.cta.com.cn/english/enindex.htm

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Importance of Chinese Textile Industry

• China’s garment and textile exports are value at $247.8 billion.

• China’s textile industry has been crowned as the world’s largest in terms of output, due to the condition of plenty of resources and cheap labour force in this industry.

• China’s textile production accounts for over 29% of total industrial output.

• Source: http://www.businessvibes.com/blog/china-king-textileindustry#sthash.zD6q53Sp.dpuf

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Chinese Textile Industry - SWOT

Strengths: •Chinese textile industry has the most complete value chain. •China has a good infrastructure to provide efficient service for textile.•Chinese textile enterprises have high efficiency operation, rapid response.

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Weakness: •Only large orders are encouraged and not small customized orders •Lack of flexibility of management and operations. •Lack of creative spirit and technical equipment.

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Opportunity: •Tariff of import raw materials is gradually reducing. •For some developed countries, import tariff for textile products has declined. •Elimination of quota restrictions.

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Threats: •Raising labor costs lead to high cost of production and narrower profit margins for Chinese manufacturers•Buyers focus is fast shifting to low labor cost countries•With the development of economics in China, low labor strategy is gradually washed out.

•Source:http://www.theseus.fi/bitstream/handle/10024/16868/He_Yi.pdf?sequence=1

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Indian Government Subsidies and Supports to Textile Industry

• Technology Fund Up gradation Scheme (TUFS)– Technical textile machinery is covered under the Technology

Up gradation Fund Scheme (TUFS) and eligible for 5% interest reimbursement & 10% capital subsidy.

• Scheme for integrated Textile Parks (SITP)– Under the Scheme for Integrated Textile Parks (SITP), the

Government provides assistance for creation of infrastructure in the parks to the extent of 40% limited to Rs.40 crore (US$ 8.82 million).

• Group Work shed Scheme (GWS)– for power loom industry

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• Major machinery required for the technical textiles has been placed in the concessional custom duty list of 5 %

• Specified technical textile products are covered under focus product scheme/green technology products/hi-tech products of Exim policy and are entitled for duty credit scrip equivalent to 2% of FOB value of exports

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• Under Integrated Skill Development Scheme (ISDS), it is proposed to train 22,000 personnel in technical textile sector during the year 2010-11 & 2011-12

• In Textile sector FDI is permitted through automatic route without any limit on the extent of foreign ownership. Thus there is no restriction on any amount of FDI , with or without local partner. Government incentives are equally applicable to FDI units

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Comparison between Indian and Chinese Textile Industry

Advantages of Indian textile industry•India is the third largest producer of cotton•Average wage rates in India are 50-60 per cent lower than that in developed countries•Fast paced infrastructure development•Skilled and qualified manpower•Increasing technology adoption.

•Source:http://www.indiantextilejournal.com/articles/FAdetails.asp?id=4802

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Opportunities for India

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Comparison between India – ChinaImports and Exports

Country 2011 Exports (Values in US$ Bn.)

China 258

Italy 38

Hong Kong

37

Germany 36

India 34

USA 29

Turkey 22

Country 2011 Imports (Values in US$ Bn.)

USA 118

Germany 56

Japan 46

China 36

UK 35

France 34

Italy 30

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Expected Future Trend in Indian Textiles

The government also supported small and medium players in segments such as weaving, garments and knits for creating job opportunities. This led to growth of small and fragmented units

The textiles scenario has changed significantly in the last decade and more after removal of quota from December 2004.

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Expected Future Trend in Indian Textiles

Government has liberalized the textiles sector and has taken several measure like TUFs, to promote large and integrated textile units

The future growth in textiles would be driven by organized players and their share is expected to increase from the present 5-6% to about 15-20% by 2020

Source: http://www.alokind.com/Downloads/Indian%20Textile%20Trade%20-Golden%20Period-%20March%202012.pdf

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Conclusion

The traditional players like China are going into the stagnation phase of the business cycle, which presents an opportunity for India to improve competency and capture world markets. The strong manufacturing base and with policy reformations the capacity of Indian textile industry can be improved drastically. The country’s inert strength in information technology will also help in the transformation.

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Textile Industry.ppt