1 49 CHAPTER III INDIAN GARMENT INDUSTRY -AN OVERVIEW 3.1 HISTORY OF TEXTILE The history of textile is almost as old as that of human civilization and as time moves on, the history of textile has further enriched itself. In the 6th and 7th century BC, the oldest recorded indication of using fibre comes with the invention of flax and wool fabric at the excavation of Swiss lake inhabitants. In India the culture of silk was introduced in 400AD, while spinning of cotton traces back to 3000 BC. In China, the discovery and consequent development of sericulture and spin silk methods got initiated at 2640 BC while in Egypt the art of spinning linen and weaving developed in 3400 BC. The discovery of machines and their widespread application in processing natural fibres was a direct outcome of the Industrial Revolution of the 18th and 19th centuries. The discoveries of various synthetic fibres like nylon created a wider market for textile products and gradually led to the invention of new and improved sources of natural fibre. The development of transportation and communication facilities facilitated the path of transaction of localized skills and textile art among various countries. 3.2 TYPES OF TEXTILES 1) Cotton 2) Wool 3) Silk 4) Nylon 5) Polyester
2 50 A textile is a cloth, which is either woven by hand or machine. 'Textile" has traditionally meant. "a woven fabric". The term comes from the Latin word Iexer', meaning to 'icaie. Fibres are used to weave clothes and these are the raw materials tbr all fabrics. Some fibres occur in nature as fine strands that can be twisted into yarns. These natural fibres come from plants, animals, and minerals. For most of history, people had only natural fibres to use in making cloth. But modern science has learned how to produce fibres by chemical and technical means. Today, these manufactured fibres account for more than two-thirds of the fibres processed by U.S. textile mills. Plants provide more textile fibres than do animals or minerals. Cotton fibers produce soft, absorbent fabrics that are widely used for clothing, sheets, and towels. Fibres of the flax plant are made into linen. The strength and beauty of linen have made it a popular fabric for fine tablecloths, napkins, and handkerchiefs. The main animal fibre used for textiles is wool. Another animal fibre, for example silk, produces one of the most luxurious fabrics. Sheep supply most of the wool, but members of the camel family and some goats also furnish wool. Wool provides warm, comfortable fabrics for dresses, suits, and sweaters. Silk comes from cocoons spun by silkworms. Workers unwind the cocoons to obtain long, natural filaments. Fabrics made from silk fibres have great luster and softness and can be dyed with brilliant colours. Silk is especially popular for saris, scarfs and neckties. Most manufactured fibres are made from wood pulp, cotton linters, or petrochemicals. Petrochemicals are chemicals made from crude oil and natural gas. The chief fibres manufactured from petrochemicals include nylon, polyester, acrylic, and olefin. Nylon has exceptional strength, wears well, and is easy to launder. It is
3 51 popular for hosiery and other clothing and for carpeting and upholstery. Such products as conveyor belts and fire hoses are also made of nylon. Majority textiles are produced by twisting fibres into yarns and then knitting or weaving the yarns into a fabric. This method of making cloth has been used for thousands of years. But throughout most of that time, workers did the twisting, knitting, or weaving largely by hand. With today's modern machinery, textile mills can manufacture as much fabric in a few seconds as it once took workers weeks to produce by hand (fabric on line.com2008)l 3.3 TEXTILE HISTORY IN INDIA Indian textile enjoys a rich heritage and the origin of textiles in India traces back to the Indus Valley Civilization where people used homespun cotton for weaving their clothes. Rigveda, the earliest of the Veda contains the literary information about textiles and it refers to weaving. Ramayana and Mahabharata, the eminent Indian epics depict the existence of wide variety of fabrics in ancient India. These epics refer both to rich and stylized garment worn by the aristocrats and ordinary simple clothes worn by the common people. The contemporary Indian textile not only reflects the splendid past but also cater to the requirements of the modern times (India crafts.com2008) Indian Clothing Like India is famous for its vibrancy and colours so are its range of apparel. Like the culture of India, Indian clothing is popular for it's for its colourfulness and grace. India has been known to have wonderful dresses and costumes. Though the majority of Indian women wear traditional costumes, outfits for women such as sari bring out the essence of feminism. Clothes for men are
4 52 suitable for the warm climate and comfort. The men in India can be found in more conventional Western clothiniz. There are various materials used like cotton, synthetic silk and many others. Clothing in India varies widely and is closely related to local culture, religion and climate. Traditional Indian clothing for women the sari or the salwar kameez and also ghaghra cholis. For men, traditional clothes are the dhothi, lungi or kurta. Mumbai is one of India's fashion capitals. In some village parts of India, traditional clothing is still mostly worn. In Southern India the men wear long, white sheets of cloth called dhothi Over the dhoti, men wear shirts, T-shirts, and other outfits.wornen wear sari, a long sheet of colourful cloth with patterns. This is draped over a simple or fancy blouse. This is worn by young ladies and women. Little girls wear a pavada.a pavada is a long skirt worn under a blouse. Both are often gaily patterned. Indo-Western clothing is the fusion of western and sub continental fashion. Churidar, dupatta, gamchha, kurta, mundum neriyathurn,sherwani are among other clothes. 3.4 TEXTILE INDUSTRY IN INDIA The textile and garment industry fulfils a pivotal role in the Indian economy. It is a major foreign exchange earner and, after agriculture, it is the largest employer with a total workforce of 35 million. In 2005 textiles and garments accounted for about 14% of industrial production and 16% of export earnings. The industry covers a wide range of activities. These include the production of natural raw materials such as cotton, jute, silk and wool, as well as synthetic filament and spun yarn. In addition an extensive range of finished products are made.
5 53 The Indian textile industry accounts for about 23% of the world's spindle capacity, making it the second highest after China, and around 6% of global rotor capacity. Also, it has the highest loom capacity including hand looms with a 61% share. India accounts for about 12% of the world's production of textile fibres and yarns. This includes jute, of which it is the largest producer. The country is the second largest producer of silk and cellulose fibre and yarn, and the fifth largest producer of synthetic fibre and yarn Textiles and Apparel Trade in India The global textiles and apparel trade is estimated at US 450 billion and is expected to touch US$ 700 billion by Of the US 52-billion Indian textile and apparel industry, the domestic industry accounts for US$ 30 billion and the remaining is accounted for by exports. Total exports increased to US$ billion in from US billion in Currently, India has a 3.5 to 4 percent share in the world's export of textiles and 3 percent in clothing exports (trade India.com2008)3. As per the latest figures available with the Ministry of Textiles, India exported textiles worth US$ billion during the first six months (April- September) of , an increase of 7.15 percent over the corresponding period last year. Indian textiles, handlooms and handicrafts are exported to more than a 100 countries. As per the latest figures available with the Ministry of Textiles, during the April-September period of , the US continued to be the single largest buyer of Indian textiles with a percent share. The US is followed by UAE with 8.27 percent share, UK with 7.53 percent, Germany with 6.11 per cent and France with 3.80 percent. The other countries that make the top 10 include Italy (3.76 per cent), China
6 54 (2.54 per cent). Spain (2.76 per cent). Bangladesh (2.45 per cent) and Netherlands (2.44 per cent). Readymade garments (RMG) are the largest export segment, accounting for almost 45 percent of total textile exports and 8.2 percent of India's total exports. This segment has benefited significantly with the termination of the Multi-Fibre Arrangement (MFA) in January RMG exports from India were worth USS 8.87 billion in During April-May RMG exports were worth US$ billion, an increase of %over the corresponding period of ( Another segment in which India has excelled in the export market is carpets. Exports of carpets have increased from US$ million in to USS million in During April-May carpet exports (including silk carpets) stood at US$ million, an increase of nearly 25 per cent over the corresponding period last year. Exports of cotton textiles have increased by nearly 42 per cent to US$ billion in April-May , up from US$ million in the corresponding period of the previous fiscal. Moreover, export of manmade textiles has increased by almost 47 percent to US$ 604 million in April-May from US$ 410 million in the corresponding period last fiscal. During April-May , exports of silk increased by percent to US$ million, export of wool increased by percent to US$ 75 million and exports of jute increased by percent to US$ million. Significantly, apparel is the second largest retail category in India. It accounts for about 10 percent of the US$ 37 billion Indian retail market, and with
7 55 the continuing boom in consumer demand, is estimated to grow at the rate of percent annually. In fact, reflecting the huge opportunity in this segment, AT Kearney's 'Retail Apparel Index' ranks India as the third most attractive market for apparel retail Benefits of Indian Textile Industry India covers 61 percent of the international textile market. India covers 22 percent of the global market. India is known to be the third largest manufacturer of cotton across the globe.. India claims to be the second largest manufacturer as well as provider of cotton yarn and textiles in the world. India holds around 25 percent share in the cotton yarn industry across the globe.. India contributes to around 12 percent of the world's production of cotton yarn and textiles Textile Industry in India's GDP India holds 22 percent share in the textile market in Europe and 43 percent share in the apparel market of the country. USA holds 10 percent and 32.6 percent shares in Indian textiles and apparel. Few other global countries apart from USA and Europe, where India has a marked presence include UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan Ready made garments accounts for 45 percent share holding in the total textile exports and 8.2 percent in export production of India.
8 56 Export production of carpets has witnessed a major growth of percent, which apparently stands at USD million during to USD million in the year India holds 36 percent share in the global textile market as has been estimated during April-October 2007 The technical textiles market in India is assumed to touch USD billion by from USD 5.09 billion during , which is approximately double. It is also assumed to touch USD billion by the year By 2010, India is expected to double its share in the international technical textile market The entire sector of technical textiles is estimated to reach USD 29 billion during (business maps of India.corn2009) Current Scenario Textile exports targeted to reach $50 billion by 2010, $25 billion of which will go to the US. Other markets include UAE, UK, Germany, France, Italy, Russia, Canada, Bangladesh, and Japan. The name of these countries with their background can give thousands of insights to a thinking mind. The slant cut that will be producing a readyrnade garment will sell at a price of 600 Indian rupees, making the value addition to be profitable by 300 %. Currently, because of the lifting up of the import restrictions of the multifibre arrangement (MFA) since 1st January, 2005 under the World Trade Organization (WTO), Agreement on Textiles and Clothing, the market has become competitive; on closer look however, it sounds an opportunity because better material will be possible with the traditional inputs so far available with the Indian market.
9 57 At present, the textile industry is undergoing a substantial re-orientation towards other than clothing segments of textile sector, which is commonly called as technical textiles. It is moving vertically with an average growing rate of nearly two times of textiles for clothing applications and now account for more than half of the total textile output. The processes in making technical textiles require costly machinery and skilled workers. The application that comes under technical textiles are filtration, bed sheets and abrasive materials, healthcare upholstery and furniture, blood-absorbing materials and thermal protection, adhesive tape, seatbelts, and other specialized application and products. 3.5 STRENGTHS OF TEXTILE INDUSTRY India enjoys benefit of having plentiful resources of raw materials. It is one of the largest producers of cotton yarn around the globe, and also there are good resources of fibres like polyester, silk, viscose etc. There is a wide range of cotton fibre available, and has a rapidly developing synthetic fibre industry. India has great competitiveness in spinning sector and has presence in almost all processes of the value chain. Availability of highly trained manpower in our country. The country has a huge advantage due to lower wage rates. Because of low labour rates the manufacturing cost in textile automatically comes down to very reasonable rates.
10 58 The installed capacity of spindles in India contributes for 24% share of the world, and it is one of the biggest exporters of yarns in the global market. Having modern functions and favourable fiscal policies, it accounts about 25% of the world trade in cotton yarn. The apparel industry is the largest foreign exchange earning sector, contributing 12% of the country's total exports. The garment industry is very diverse in size, manufacturing facility, type of apparel produced, quantity and quality of output, cost, requirement for fabric etc. It comprises suppliers of ready-made garments for both, domestic or export markets. 3.6 WEAKNESS OF TEXTILE INDUSTRY Massive Fragmentation A major loop-hole in Indian textile industry is its huge fragmentation in industry structure, which is led by small scale companies. Despite the government policies, which made this deformation, have been gradually removed now, but their impact will be seen for some time more. Since most of the companies are small in size, the examples of industry leadership are very few, which can be inspirational model for the rest of the industry. The industry veterans portray the present productivity of factories at half, as low as one-third of levels, which might be attained. In many cases, smaller companies do not have the fiscal resources to enhance technology or invest in the high-end engineering of processes. The skilled labour is cheap in absolute terms; however, most of this benefit is lost by small companies.
11 59 The uneven supply base also leads barriers in attaining integration between the links in supply chain. This issue creates uncontrollable, unreliable and inconsistent performance. Political and Government Diversity The reservation of production tor very small companies that was imposed with an intention to help out small scale companies across the country, led to substantial fragmentation that distorted the competitiveness of industry. However. most of the sectors now have been de-reserved, and major entrepreneurs and corporate are putting-in huge amount of money in establishing big facilities or in expansion of their existing plants. Secondly, the foreign investment was kept out of textile and apparel production. Now, the Government has gradually eliminated these restrictions, by bringing down import duties on capital equipment, offering foreign investors to set up manufacturing facilities in India. In recent years, India has provided a global manufacturing platform to other multi-national companies that manufactures other than textile products; it can certainly provide a base for textiles and apparel companies. Despite some motivating steps taken by the government, other problems still sustains like various taxes and excise imbalances due to diversification into 35 states and Union Territories. However, an outline of VAT is being implemented in place of all other tax diversifications, which will clear these imbalances once it is imposed fully.
12 60 Labour Laws In India, labour laws are still found to be relatively unfavorable to the trades, with companies having not more than ideal model to follow a 'hire and fire' policy. Even the companies have often broken their business down into small units to avoid any trouble created by labour unionization. In past few years, there has been movement gradually towards reforming labour laws, and it is anticipated that this movement will uphold the environment more favorable. Distant Geographic Location There are some high-level disadvantages for India due to its geographic location. For the foreign companies, it has a global logistics disadvantage due the shipping cost is higher and also takes much more time comparing to some other manufacturing countries like Mexico, Turkey, China etc. The inbound freight traffic has been also low, which affects cost of shipping - though, movement of containers are not at reasonable costs. Lack of trade memberships India is serious lacking in trade pact memberships, which leads to restricted access to the other major markets. This issue made others to impose quota and duty, which put scissors on the sourcing quantities from India. 3.7 FORECAST OF TEXTILES MARKET IN INDIA Women's wear market The Indian women apparel market has undergone a transformational phase over the past few years. Growing number of working women, changing fashion
13 61 trends, rising level of information and media exposure, and entry of large number of Rreign brands have given the industry a new dimension. As a result, various industry majors operating in men apparel segment have now started to diversify themselves into women wear in order to exploit the highly lucrative market that was estimated at more than Rs. 37,000 Crore in The market, in the past five years, posted a growth rate of good 14%. Increasing at a growth rate of over 1 7%per annum, women apparel market is expected to cross Rs.61,000 Crore by randed women apparel market is projected to rise at a rate close to 25% and surpass Rs. 18,000 Crore by Premium segment apparel is forecasted to account for close to 20% of total women apparel market by Western wear, along with lingerie, will emerge as the fastest growing segment. Organised players are expected to account for over 40% lingerie market by Demand for textile and apparel machinery is anticipated to increase at more than 100% till Demand for ready-made garments in rural market is projected to grow around 16.50%per annum by 2010 (market moniter.com2009)6. Men's wear market The menswear market includes all garments made for men and boys. It includes both outer and under garments, but excludes infants wear, which is defined as clothing for children under two years of age. The market comprises the coats, suits, trousers, shirts (including T-shirts, jumpers, etc.) and underwear sectors. The market's value is calculated at retail selling price (RSP), and includes all taxes and levies. Men's apparel industry will increase at a growth rate of 14.86% during the two-year period from 2008 to The demand for ready-made garments in rural
14 62 India will surge at a rate of 16.50%per annum to reach Rs Crore by 2010.lncreasing at a growth rate of 24%, branded apparel industry for men will cross Rs. 25,000 Crore by Per capita GDP spending on apparel increased to 5.8% in 2006 from 4.9% in In men's apparel industry was mainly dominated by shirts (in value terms) accounting for 36.5% of total mens segment. The Indian fashion industry is expected to rise at a stupendous pace of 22.67% through 2012 from Children wear market Children's apparel is a market that is growing rapidly today. Trends in the market are fast changing. The market for kids' apparel in India exceeds Rs Crore, of which around Rs Crore is constituted by branded kids' wear. The kids' wear market is growing at the rate of 10% per annum, which makes it one of the fastest growing markets. Some major changes in trends are taking place in the market for kids' apparel. One of the important changes is the increasing preference for branded apparel. This shift is taking place on account of changes such as a rise in the disposable income of the people and the increasing influence of foreign culture. The other important change that is taking place in this area is the emergence of kids as an independent buyer group. Influenced by mass media and peer pressure, today's kids are more informed and self-conscious. According to a recent study conducted, out of the total Indian population, 30% are under the age of 12. The market for Kids apparel in India exceeds Rs. 14,000 crore, of which Rs. 3,000 crore is constituted by branded kids wear. It's growing at 20% per aimum which makes it one of the fastest growing markets. (fibre to fashion.com2009) 7
15 REFERENCES Fabric on line India crafts.com Trade India.corn Ihef, org Business maps of India.com Market moniter.com Fibre to fashion.com2009