Explain the importance of textile industry in India?
Answers
International trade in textiles and clothing has played an important role in the development process of many countries and has also facilitated their integration in to the world economy. In the Developed Countries, the process of industrialization and Subsequent prosperity in a way commenced with the mechanization of textile production in the early 19th Century. In the Developing Countries, on the other hand, the sector has come to occupy an important place in terms of its contribution to national output, employment and exports. Developing countries as a group. account for more than one half of world exports of textiles and clothing.
As the latest WTO report (2006) states "In no other category of manufactured goods do developing countries enjoy such a large net exporting position" as they do in the textile sector.
Importance of Textile Industry in India
Like the other developing countries, the Textile industry in India also occupies an important place in the economy as shown below:
Key Indicators
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$ 52 billion, at present
Expected to reach US$ 110 billion by 2012
Covers the Entire value chain
RAW MATERIAL: Cotton Production estimated at 4.32 million Tons
SPINNING: 37.5 million spindles
WEAVING: 1.93 Million looms (excluding hand looms)
APPAREL: Current level of exports - US$ 10 billion
Emerging trends in World Trade
With the removal of the Quota system, in the year 2005, the textile and clothing industry is undergoing structural changes worldwide with production lines further shifting distinctly towards low cost producing countries with flexible production systems, to match the growing retail power.
Perceived as a "third migration" this shift is seen more towards Asia- away from Europe, US and a large number of small suppliers who were "Quota rich" prior to 2005 and whose rising cost structures are increasingly precluding them from being able to compete.
A noteworthy feature of these emerging trends in international trade is that the developed countries even though exiting from direct manufacturing, continue to dominate it by controlling the retail end of the supply chain. The cost and price structure globally is being characterized by higher potential for profit from innovation, marketing, and retailing rather than production, assembly, finishing and packaging. Multiple store retailers are already selling 70% of the clothing in Western Europe and 85% in the US.
The developing countries on the other hand, are becoming manufacturing hubs for textile products, and are increasingly getting themselves integrated with the global market place and offering capabilities not only in production capacities, but also in product development and efficient Supply Chain management.
Application of Technology
In this emerging scenario, wide spread application of technology is required not only to upgrade the quality of products, determine consumer choices, but also to overcome locational disadvantages and reduce overhead costs on unsold inventories.
The developed countries are already focusing on niche products like protective clothing, clothing for medical use by developing competitiveness in novel "nanotechnology" coatings, greater adoption of Product Life-cycle Management (PLM) Systems, in order to deliver new "fast fashion" paradigms, while at the same time remaining steadfastly committed to lower production costs.