You are on page 1of 7

TEXTILE INDUSTRY

The textile industry plays a crucial role in the Indian economy. The
presence of textile sector can be felt through its share of contribution
to the industrial output, employment generation and the export
earnings of the country. Currently, it contributes about 14 percent to
industrial production, 4 percent to the GDP and 16 percent to the
country's export earnings. The textile sector is the second largest
provider of employment after agriculture and provides employment to
about 35 million people.

The major sectors forming part of the textile industry include the
organized Cotton/ Man Made Fibre Textile Mill Industry, Man made
fibre/ filament yarn industry, the decentralized powerloom sector,
woolen textile industry, silk industry, handloom industry, handicraft
industry, jute industry and textile exports.

Sector Wise Analysis

1. Readymade Garments: Readymade Garments account for


approximately 44% of the country's total textile exports.
Readymade Garments exports recorded a growth of 15.5% in
2002-03 and 8.5% in 2003-04. During 2004-2005, Readymade
Garment exports were US$ 5.50 billion, recording a drop of
4.9% as compared to 2003-04. During April- November, 2005
the Readymade Garment exports were US$ 4.19billion, recording
an increase of 18.9%, as compared to corresponding period of
2004-05.
2. Cotton Textiles including Handlooms: Cotton textiles i.e. yarn,
fabrics and made-ups (Mill made Power loom/ Handloom)
constitute more than 2/3rd of India's exports of all
fibres/yarns/made-ups. Cotton Textile exports recorded a growth
of 9.1% in 2002-03 and 7.1% in 2003-04. During 2004-2005,
Cotton Textile exports, including Handlooms, were US$ 3.28
billion, recording a decline of 8.8% as compared to 2003-04.
During April- November, 2005 the cotton textiles exports were to
the tune of US$ 2.3 billion, recording a growth of 4.1% as
compared to the corresponding period of 2004-05.
3. Man- made Textiles: The exports of man-made textiles recorded
a growth of 30.2% in 2002-03 and 28.5% in 2003-04. During
2004-2005, manmade Textiles exports were US$ 1.94 billion,
recording a growth of 6.8% as compared to 2003-04. During
April- November 2005 the man-made textile exports were US$
1.14 billion, recording a decline of 12.8% as compared to the
corresponding period of 2004-05.
4. Silk Textiles: The exports of silk textiles recorded 3.3% growth
in 2002-03 and 20.8% in 2003-04. During 2004-05, silk textile
exports were US$ 0.58 billion, recording 7.2% growth as
compared to 2003-04. During April-November, 2005 the silk
exports were US$ 0.398 billion, recording 7.3% increase over
the corresponding period of 2004-05.
5. Woolen Textiles: the exports of woolen textiles declined by 6.8%
in 2002-03 as compared to previous year. However, woolen
textiles have recorded a significant growth of 25.5% in 2003-04
as compared to 2002-03. During 2004-05, woolen textiles
exports were US$ 0.41 billion, recording a growth of 22.2% as
compared to the corresponding period of 2003-04. During April-
November, 2005 the woolen textile exports were US$ 0.29
billion, recording a decline of 1.8% over the corresponding
period of 2004-05.
6. Handicrafts including Carpets: Exports of handicrafts including
carpet recorded a growth of 24.4% in 2002-03 as compared to
the previous year. However, handicrafts exports, including
carpet, have declined by 17.6% in 2003-04 as compared to
2002-03. During 2004-2005, handicrafts exports, including
carpet were US$ 0.94 billion, showing a decline of 13.4% as
compared to 2003-04. During April-November, 2005, the
handicrafts exports were US$ 0.724 billion, recording an increase
of 11.7% over the corresponding period of 2004-05.
7. Coir: The Coir exports had recorded a growth of 18.8% in 2002-
03 and 6.0% in 2003-04 as compared to previous year. During
2004-2005, coir exports were US$ 0.10 billion, recording a
growth of 30.6% as compared to 2003-04. During the period of
April-November, 2005 the coir exports were US$ 0.078 billion
recording an increase of 20.3% over the corresponding period of
2004-05.

Jute: Export of Jute products recorded a growth of 45.9% in 2002- 03


and 29.2% in 2003-04 as compared to the respective previous year.
During 2004-2005, jute exports were US$ 0.27 billion, recording a
growth of 11.4% as compared to 2003-04. During the period of April-
November 2005 the Jute exports were US$ 0.183 billion, recording an
increase of 5.3% over the exports during the corresponding period of
2004-05.
Exports of textiles

The textile products continue to play an important role in total export


basket of the country.

The exports of textiles (including handicrafts, jute and coir) formed


24.6% of total exports in 2001-2002, however this percentage
decreased to 16.24% during 2004-05. The textile exports recorded a
growth of 15.3% in 2002-2003 and 8.7% in 2003-2004. During 2004-
05, textile exports were US$ 13,039.00 million, recording a decline of
3.4% as compared to the corresponding period of previous year.
However, during April-November 2005, the textile exports have shown
a growth of 8.2% as compared to the corresponding period of previous
year.

(Value US$ in million/Rs. in crore)


S. Sector Target April-Nov, Apr-Nov % % Target
No. 2005- (2004) (2005)- Increase/ achieved
06 Provisional decrease (US$)
of 2005
over 2004
US$ Rs. US$ Rs. US$ US$ US$
1 Readymade 6450 16014.7 3519.0 18437.5 4185.2 18.9 64.9
Garment
2 Cotton 4200 10116.5 2223.0 10181.8 2311.2 4.0 55.0
textiles
3 Man made 2200 5956.3 1308.8 5026.2 1140.9 -12.8 51.9
textiles
4 Wool and 400 1343.1 295.1 1277.0 289.9 -1.8 72.5
woolen
5 Silk 625 1686.8 370.7 1752.5 397.8 7.3 63.6
Total 13875 35117.3 7716.5 36675.0 8325.0 7.9 60.0
(excluding
handicrafts,
carpets,
jute and
coir)
6 Handicrafts 1355 2948.8 647.9 3187.1 723.5 11.7 53.4
(a+b)
600 1777.6 390.6 1988.1 451.3 15.5 75.2
a)Carpets
755 1171.2 257.3 1199.1 272.2 5.8 36.1
b) Other
Handicrafts
7 Coir 85 296.5 65.2 345.4 78.4 20.3 92.2
8 Jute 250 790.5 173.7 806.1 183.0 5.3 73.2
Total 15565 39153.1 8603.3 41013.6 9309.8 8.2 59.8
(including
handicrafts,
carpets,
jute and
coir)

Source: Foreign Trade Statistics


of India (PC&C) DGCIS, Kolkata

Export Promotion Measures

In order to encourage upgradation of textiles sector and to give a fillip


to exports of textile products, some of the important initiatives taken
are as follows:

(I) Announcements in the new Foreign Trade Policy:

The new Foreign Trade Policy contains a number of positive features.


The features, which are particularly beneficial to the textile industry
are:

• Handicrafts and Handloom sectors, among others, have been


identified as Special Focus Initiatives.
• Duty free import of trimmings and embellishments for
Handlooms &Handicrafts sectors increased from 3% to 5% of
FOB value of exports
• Import of trimmings and embellishments and samples shall be
exempt from CVD
• Handicraft Export Promotion Council authorized to import
trimmings, embellishments and samples for small manufacturers
• A new Handicraft Special Economic Zone shall be established
• Leftover materials and fabrics of the 100% EOUs upto 2% of CIF
value or quantity of import shall be allowed to be disposed of on
payment of duty on transaction value only.

(II) Announcement of New Textile Policy: One of the main objectives


of the New Textile Policy (NTxP-2000) announced in November 2000 is
to facilitate the textile industry to attain and sustain a pre-eminent
global standing in the manufacture and export of clothing. The policy
endeavors to achieve the target of textile and apparel exports from the
present level to US$ 50 billion by 2010 of which the share of garments
will be US$ 25 billion. Subsequent to the announcement of NTxP-2000,
woven segment of readymade garment sector has been de-reserved
from the ambit of SSI and the announcement has been made for de-
reservation of knitwear from SSI.

(III) Technology Upgradation Fund Scheme: In view of the urgent


need for stepping up the process of modernization and technology.
Upgradation of the Textile industry in India, Ministry of Textiles
launched a Technology Upgradation Fund Scheme (TUFS) for the
Textile and Jute Industry w.e.f. 01.04.1999 for a period of five years
and has since been extended till 31.03.2007, providing for 5% interest
reimbursement in respect of loans availed there under from the
concerned Financial Institutions (FIs) for investments in benchmarked
technology for the sectors of the Indian Textile industries specified
there under. An additional option has been given to power loom units
for 20% capital subsidy under Credit Linked Capital Subsidy (CLCS-
TUFS) up to a cost of Rs.1.00 cr. in eligible machinery with facility to
obtain credit from a credit network that includes all co-operative banks
and other genuine non banking financial companies (NBFC) recognized
by the Reserve Bank of India. Upto 31.12.2005, an amount of Rs.
14,497crore, involving 4248 applications, has been sanctioned.

(IV) Liberalization of FDI Policy: the Government has been taking


measures from time to time to liberalize policy for foreign direct
investment inter-alia in the textile sector. Recently, Government has
allowed foreign equity participation upto 100 percent through
automatic route, in the textile sector with certain exceptions.

(V) Export Promotion Capital Goods Scheme (EPCG): Import duty in


respect of 387 textile machinery listed under list 30, 31, 32, 45 and 46
of Customs Tariff has been reduced to 5% BCD. This will help Indian
textile industry to import sophisticated machinery which will enhance
the quality and cost competitiveness of the industry in the domestic as
well as export market.

(VI) Advanced Licensing Scheme: With a view to facilitate exporter's


access to duty-free inputs under the scheme, Standard Input-Output
Norms (SION) for about 300 textiles and clothing export products have
been prescribed. The SION for a number of apparel items have been
revised upwards, based on large garment size. Additional items such
as zip fastners, inlay cards, cyclets, revets, eyes, toggles, Velcro tape,
cord and cord stopper are included in input-output norms for garment
exports under Advance Licensing Scheme.
(VII) Duty Exemption Pass Book (DEPB) Scheme: DEPB credit rates
have been prescribed for number of textiles and clothing products (The
DEPB credit rates cover about 150 textile and clothing products, for
which SION are prescribed). The nomenclature and rates for DEPB
entries pertaining to certain textile products have been rationalized.

(VIII) Duty Drawback Scheme: The objective of the system is to


reduce the burden of indirect taxes on exports and therefore, the
exporters are allowed refund of the excise and import duty suffered on
raw materials etc. under the scheme so as to make them more
competitive in the international market.

(IX) Construction of Apparel international Mart: Apparel Export


Promotion Council has constructed an Apparel International Mart (AIM)
at Gurgaon with assistance from Government. The mart will house
centrally air-conditioned showroom, which will be given on lease and
license basis to the established garment exporters in India. This will
provide a world-class facility to the apparel exporters to showcase
their products and will serve as one stop shop for reputed international
buyers.

(X) Setting up of Modern Laboratories: The Ministry of Textiles has


assisted the Textile Committee in setting up of modern textile
laboratories to ensure that the textiles exported from the country meet
all international environmental standards.

(XI) Apparel Park for Exports Scheme: With the objective of imparting
a focused thrust to set up apparel units of international standards and
to give a fillip to exports, the Government had launched the Apparel
Park for Exports Scheme (APES), a centrally sponsored scheme.
Twelve Project Proposals have been sanctioned for setting up Apparel
Parks at Tronica City & Kanpur (U.P.), Surat (Gujarat),
Thiruvananthapuram (Kerala), Visakhapatnam (Andhra Pradesh),
Ludhiana (Punjab), Bangalore (Karnataka), Tirupur & Kanchipuram
(Tamil Nadu), SEZ, Indore (Madhya Pradesh), Mahal (Jaipur,
Rajasthan) and Butibori-Nagpur (Maharashtra).

(XII) Human Resource Development: attention has also been paid to


human resource development in the textile sector. National Institute
of Fashion Technology (NIFT) is imparting training to fashion
designers and fashion technologists to cater to the human resource
requirements of the garment industry. Further, Apparel Export
Promotion Council has been running Apparel Training and Design
Centres (ATDCs) at important apparel centres located at Chennai,
Delhi, Kolkata, Hyderabad, Jaipur and Bangalore in order to impart
training at shop floor level to meet the growing needs of apparel
industry.

Policy Initiatives

The Government has formulated a National Textile Policy (NTP) 2000


with the objective of facilitating the industry to attain and sustain a
pre-eminent global standing in the manufacture and export of clothing.
Through NTP 2000, the Government would endeavor to achieve the
target of textile and apparel exports from the present level of U.S. $11
billion to U.S. $50 billion by 2010. The policy provides for setting up a
venture capital fund for tapping knowledge-based entrepreneurs and
assisting the private sector to set up specialized financial
arrangements to fund the diverse needs of the textile industry.

• The Government has announced comprehensive National Jute


Policy 2005 with a view to develop a strong and vibrant jute
sector. The policy enunciates that the approach for the jute
sector will be directed towards reviving the jute economy
through supportive measures such as research and
development, technology upgradation, creation of infrastructure
for storage and marketing of raw jute and product and
marketing development activities for jute and diversified jute
products.
• FDI Policy: As per the present policy of Government of India,
100 percent FDI is freely allowed in spinning, weaving,
processing, garments and knitting sector under the automatic
route for both new ventures and existing companies except in
cases where industrial license is required on account of location
of such units falling in a locatioanlly restricted area. In respect of
such proposals, government approval is required.

******

You might also like