A STUDY ON GARMENT EXPORTERS PERCEPTION ON TECHNOLOGY UPGRADATION IN TIRUPUR CITY

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1 A STUDY ON GARMENT EXPORTERS PERCEPTION ON TECHNOLOGY UPGRADATION IN TIRUPUR CITY Dr P RADHAMANI Associate Professor in Commerce, Tiruppur Kumaran College for Women, Tiruppur. 1.1 INTRODUCTION In Indian economy, garment industry plays a vital role in the country s GDP. The Indian garment industry is a labour intensive industry that spread over the entire subcontinent. The two main apparel sectors are knitted and woven sector which is about units and units spread over the sub continent. Versatility in manufacturing process, strong fabric base, lower labour cost and value added ethnic wear are the strengths of Indian apparel manufacturers. Inconsistent quality, low productivity, limited efforts of manufacturing value added products, high level of fragmentation, lack of supportive human resources are the weakness of Indian apparel manufacturers. The Indian garment industry is one of the largest in the world with a massive raw material and garments manufacturing base. Our economy is largely dependent on the garment manufacturing and trade in addition to other major industries. About 27% of the foreign exchange earnings are on account of export of garments and clothing alone. The garments and clothing sector contributes about 14% to the industrial production and 3% to the gross domestic product of the country. Around 8% of the total excise revenue collection is contributed by the garment industry. So much so, the garment industry accounts for as large as 21% of the total employment generated in the economy. Around 35 million people are directly employed in the garment manufacturing activities. Indirect employment including the manpower engaged in agricultural based raw-material production like cotton and related trade and handling could be stated to be around another material. A garment is the largest single industry in India (and amongst the biggest in the world), accounting for about 20% of the total industrial production. It provides direct employment to around 20 million people. Garment and clothing exports account for one-third of the total value of exports from the country. There are 1,227 garment mills with a spinning capacity of about 29 million spindles. While yarn is mostly produced in the mills, fabrics are produced in the power loom and handloom sectors as well. The Indian garment industry continues to be predominantly based on cotton, with about 65% of raw materials consumed being cotton. The yearly output of cotton cloth was about 12.8 billion m (about 42 billion ft). The manufacture of jute products (1.1 million metric tons) ranks next in importance to cotton weaving. Garment is one of India s oldest industries and has a formidable presence in the national economy inasmuch as it contributes to about 14 per cent of manufacturing value-addition, accounts for around one-third of our gross export earnings and provides gainful employment to millions of people. They include cotton and jute growers, artisans and weavers who are engaged in the organized as well as decentralized and household sectors spread across the entire country. The Global Garment Industry, particularly the Apparel Industry has seen remarkable changes in the past few years. The Garment Manufacturing Industry and the Garment Companies in developed countries are now always on a lookout for cheap source of garment production. The clothing wholesale supply is increasing worldwide in all the sectors of the industry, whether it be men s clothing, women s clothing, kids wear or infant wear. The elimination of global export quotas has led to a shift towards low cost countries having strong and established Clothing Industry especially the Asian countries. 1

2 1.2 STATEMENT OF THE PROBLEM The most important problem in the adoption of improved technology is the lack of financial resources to the unit. In several instances, the cost of technology makes it difficult to be adopted. A large number of small and medium enterprises (SME s) units reported difficulty in obtaining sufficient funds from banks and financial institutions. There was also lack of awareness about the credit guarantee scheme, other barriers like availability of requisite technology, lack of skilled human resource, desire to avoid risk of adoption of improved technology, low level of indigenous R&D, inadequate management skills and non-availability of technically qualified persons to operate the new technology. Hence the present study made an attempt to analyze the attitude of exporters in technology upgradation. 1.3 OBJECTIVES OF THE STUDY 1. To study the factors that influences the garment exporters for technological upgradation. 2. To study the exporters opinion with regard to the establishment of technology. 3. To analyze the benefits and problems faced by the exporter while implementing technology upgradation. 4. To know the level of satisfaction of exporters towards technology upgradation. 1.4 REVIEW OF LITREATURE Panthaki (2010) 1 stated that the future of garment export from India predicts bright future and outlines the future course of action for the garment industry. The garment industry needs to pay greater attention to evolve markets favorably disposed to India for historic reasons, such as, South Africa, C.I.S., Venezuela, Chile, and Columbia, where Indian garments are yet to take a foothold. The industry has to take advantage of the availability of special fabrics on OGL/SIL to manufacture and export industrial/institutional/sportswear of all types and also to enter into collaboration arrangements with manufacturers in West Europe to obtain the necessary know-how for benefit in the future export growth. Koshy (2011) 2 examined that the perceptions of 107 exporters regarding the progress of overseas importers with respect to garments and fashion garments. The study pointed out that for basic garment sourcing; the exporters believed that production capability had an important generic value, forming the basis of value chain match in the eyes of the overseas buyers. According to this study, Indian garments exporters perceive that the importer segments expect many additional dimension in fashion garments which distinctly different from basic garments. These factors can be termed as production, product specialization and development function and quality and quick response. The exporters realized that the capability to design and develop fabrics, specialize in product categories, give the final finish and presentation of garments, deal with a short lead time and speed of response were some of the dimensions of the buyer expect from exporters of fashion garments. Roy (2012) 3 stated that garment industry worldwide was undergoing significant restructuring since the final phase out of the Multi fiber Arrangement. The changes were taking place in terms of relocating production sites on the one hand and coping with the new competition on the other. In this context, the paper tried to look into the status of garment industries in India and see how the assumed release of constraints in demand both through liberalization in domestic trade policies and by phasing out of Multi fiber Agreement had impacted upon the growth and size distribution of firms in the sector. The paper focused on how the responses of individual firms were embedded in the evolving 2

3 patterns of production organization, labour processes and institutional arrangements related to respective industrial sites. Verma (2013) 4 did a comprehensive study with objective to evaluate the export competitiveness of Indian textile and clothing sector. The Study concludes that Indian exports to US and EU are export competitive as a whole. Sector wise analysis of export performance of Indian textile and clothing sectors to US and EU reveal that so far apparel or clothing and made-up is concerned; quota is the major constraint in the growth, while it is not true in case of yarn exports. Indian textile and clothing sector has tremendous potential and only a portion of which is explored till now and this shortcoming is due to policy constraints. Meenakshi (2014) 5 did a comprehensive study on the opportunities that would be provided by WTO to Indian Textile industry. This paper gives a lot emphasis on new capacity installation to take the benefits to the fullest extent in India has to be a true gainer in competition to other nations. Since India s own consumption per capita is also on the rise with the rise of income and consumption habits, the profit margins available to Indian textile and clothing producers will be more. But in export market, the prices will be driven by international factors and profits will be under pressure. So the exporters might have to go for strategy of partial exports and partial domestic sale. Pandey (2015) 6 in his article expected that Indian textile exporter would be benefited with quota elimination. It discusses on various sectors of textile and clothing. Also he expects that hosiery industry will be one of the gainer and small scale exporters will be more competitive due to small size and controlled cost and lower overheads. 1.5 RESEARCH METHODOLOGY Research methodology is a systematic way to solve a problem. It is a science of studying how research is to be carried out. DATA COLLECTION METHOD Data can be collected in two ways 1. Primary data 2. Secondary data SAMPLING TECHNIQUE Convenience sampling is used for the study. SAMPLING SIZE Size of the sample refers to the numbers of items to be chosen from the universe to form a sample. For a researcher, this constitutes a major problem. The size of sample must be optimum. An optimum sample may be defined as the one that satisfies the requirements of representativeness, flexibility, efficiency, and reliability. While deciding the size of sample, a researcher should determine the desired precision and the acceptable confidence level for the estimate. It refers to the number of respondents of the study. The sample size of this study is

4 STATISTICAL TOOLS USED The tools used are, 1. Simple percentage. 2. Rank analysis. 3. Chi-square test. 4. Point analysis. 1.6 LIMITATIONS OF THE STUDY 1. The geographical scope of the study is confined only to Tirupur city. 2. The time are the factors that limiting the study. 3. The study mainly depends on respondent s view which may be biased in nature 4. Chances of human errors are possible. 1.7 CHAPTER SCHEME Chapter 1: It deals with Introduction, Statement of the problem, Objectives of the study, Review of the literature, Research methodology, limitations of the study, Chapter scheme. Chapter 2: It deals with Overview of Technology upgradation of garment industry. Chapter 3: It deals with Analysis and Interpretation of the study. Chapter 4: Findings, Suggestions and Conclusion are dealt under this chapter. FINDINGS INTERCONTINENTAL JOURNAL OF HUMAN RESOURCE RESEARCH REVIEW 45% of the respondents are under years of age. Majority of the respondents are male. Most of the respondents (i.e46%) belong to partnership firm. Majority of the respondents belong to above 3-6 years of experience. Majority of the respondents (34%) produced pieces per month. 40% of the respondents invested 1-3 crores for their business. Majority of the respondents (50%) get finance from commercial banks. Majority of the respondents (33%) pay 13.5% of interest. Most of the respondents export their products to Europe. 28% are importing machineries from Germany. Majority of the respondents (70%) avail tax concessions for machineries. 30% of respondents get awareness of latest technology through journals and magazines. 75% of the respondents states their labour union supports to technology upgradation. Most of the respondents (36%) states that, the Government should concentrate on economic development. 50% of the respondents moderately accept latest technology helps to eco friendly products. Majority of the respondents (47%) expect subsidies from Government. 43% of the respondents satisfied with technology upgradation. Most of the respondents states that, the major influencing factor for technology upgradation is to meet high demand hence it ranked 1 st. 4

5 Majority of the respondents states that satisfaction of exporters is the factors that help the firm for upgrading technology. (1 st rank). Majority of the respondents faced the major problems were delay in availing loan. Majority of the respondents were strongly agreed with less cost of production on technology upgradation. Majority of the respondents were strongly agreed that, the commercial bank provides excellent support for technology upgradation. There is no significant association between latest technology and age. There is no significant association between latest technology and gender. There is no significant association between latest technology and organization. There is no significant association between latest technology and year of experience. There is no significant association between latest technology and investment. There is no significant association between latest technology and monthly production. SUGGESTIONS The governments can extent credit facility for technology upgradation to meet the competition at global level Government can take more initiative steps on upgrading technology by means of reducing interest rate. The exporters can look forward for the trade fairs and exhibitions which are conducted within the country and outside the country to know the latest technology. The exporters are suggested to upgrade technology which helps them in improving the quality of the product (garment) that indirectly increases the export. CONCLUSION Tirupur have the ability to take up small orders to large orders at short notice. It is also to produce the entire range of woven wear and knitwear at low cost with reasonably good quality within specified schedules. It also suffers from failures to meet standards demanded by higher price niche markets and inability to compete with the technology. If India has to globalize its garment trade, the industry will have to work the way the world does. The need for technology upgradation of the garment industry is extremely urgent on account of quality as well as productivity. Installation of sophisticated machines and better skills would enable to gain a competitive edge in the global trade. REFERENCES 1. Panthaki.M.K. (2010). Analysis and Future of Garment Exports from India, Texincon, 7(2), Koshy, D.O. (2011), Garment Exports: Winning Strategies, New Delhi : Prentice Hall of India Private Ltd 3. Roy, S. (2012). Garments Industry In India Lessons from Two Clusters. ISID Working Paper No. 2009/01,Institute for Studies in Industrial Development, New Delhi 4. Verma, S. (2013). Export competitiveness of Indian textile and garment industry. Working paper no.94, Nov, ICRIER. 5. Meenakshi (2014).Study on the Government Role In Promotion of Apparel Exports From India. National Monthly Refereed Journal Of Research In Commerce & Management, 2(7),

6 6. Pandey (2015).Performance Evaluation of Indian Textile Industry.International Journal for Management Research. 1(3), Uraiwan (2016).An Analysis of Performance of the Indian Textile Industry after Phase of Quota System.IJCSMS International Journal of Computer Science and Management Studies, 12(9), Nanda and Raikhy(2017)Tirupur Exporters and Their Strength.Global Research Analysis, 1(5), Rajasekaran and Gokilavani (2017) Overview of India export performance: Trends and Drivers, Working paper No.363, Economics & Social Science, Indian Institute of Management, Bangalore Nikaido(2018) Performance of Indian Textile & Clothing Industry In The United States Market: A Post ATC Analysis. National Monthly Refereed Journal of Research In Commerce & Management, 2(3),

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