Textile industry

Textile industry

1. Textile industry

2. overview The textile industry is one of the earliest industries to have developed in India. Its inherent and unique strength is its incomparable employment potential. This is owing to the presence of the entire value chain from fibre to apparel manufacturing within the country.

3. Process and output: The fundamental strength of the textile industry in India is its strong production base of wide range of fiber / yarns from natural fibres like cotton, jute, silk and wool to synthetic / man-made fibers like polyester, viscose, nylon and acrylic . Process Raw material ginning spinning processing Garment/apparel production

4. output Cotton, Jute,Silk wool fiber yarn fabric Processed fabric Final garments/ apparel Yarn and fiber segment Woolen textile Jute textile Silk textile Technical textiles

5. History of textile industry  In 1725 AD 300 lakh meters of cloth was being exported from India to Europe The 1st textile mills was setup in Mumbai in 1854 by C.N.Dawar • The 1st cotton spinning mills was setup in 1861 by “SETH RANCHHODMAL CHOTALAL ”. • Gradually more textile mills begin to come up in places like Mumbai, Ahmedabad, Chennai & Indore .

6. Key market trends: Increasing Demand for Natural Fibers The abundance of natural fibers, especially cotton, in China, India, and the United States, is contributing significantly to the growth of the global textile market .

7. Shifting Focus Toward Non-woven Fabrics Nonwovens are used in road construction in the form of geotextiles to increase the durability of roads. Low maintenance costs associated with nonwovens are expected to fuel its demand in construction applications . Rapid industrialization and recent innovations in the field of textile technology are other factors fueling demand for non-woven fabrics, globally. 

8. Competitive Landscape The report covers the major players operating in the textile industry. In terms of market share, the companies in the global textile industry do not have a considerable amount of market share, as the market is highly competitive and fragmented.

9. GROWTH RATE OF TEXTILE INDUSTRY ACROSS INDIA OF FY2010 TO FY 2020:

10. Growth rate of textile industry across India FY 2010 - FY 2020  This statistic illustrates the growth rate of textile industry across India from fiscal year 2010 to fiscal year 2020. The growth rate of textile industry across India was estimated to be 8.7 percent from fiscal year 2015 to 2020, up from about seven percent from fiscal year 2010 to fiscal year 2015.

11. Growth drives: Abundance of raw material, presence of entire value chains, competitive manufacturing costs, availability of skilled manpower, large and growing domestic market, rising per capita income, higher disposable incomes and preferences for brands and increase in organized retail landscape and e-commerce are the key growth drivers for the textile industry . The textiles industry in India is experiencing a significant increase in collaboration between global majors and domestic companies.

12. Market structure: The size of India’s textile market as of 2018 was around US$ 102.2 billion. It is expected to touch US$ 223 billion market by 2021. It will be growing at a CAGR of 10.14 per cent between 2009-21 . India’s domestic textile and apparel market is currently worth US$ 106 billion. It is expected to grow at a CAGR of 12% to reach US$ 220 billion by 2025-26.

13. In fact, it is the biggest employer after agriculture. It provides direct employment to 4.5 crore people and another 6 crores in allied sectors. Furthermore, India is the second-largest manufacturer of textiles and clothing in the world. India is also the second-largest exporter of textiles and apparel. In fact, it has a share of 5% in global trade. Besides, various governmental flagship programs further drive growth. These include ‘Amended Technology Upgradation Funds Scheme (ATUFS), North Eastern Region Textile Promotion Scheme (NERTPS) and Scheme for Integrated Textile Parks.

14. Size of Textile Industry in India: • The textile industry in India covers a wide gamut of activities ranging from production of raw material like cotton, jute, silk and wool to providing high value-added products such as fabrics and garments to consumers . • The industry uses a wide variety of fibers ranging from natural fibers like cotton, jute, silk and wool to man made fibers like polyester, viscose, acrylic and multiple blends of such fibers and filament yarn.

15. • The textile industry plays a significant role in Indian economy by providing direct employment to an estimated 35 million people, by contributing 4 per cent of GDP and accounting for 35 per cent of gross export earnings. The textile sector contributes 14 per cent of the value-addition in the manufacturing sector. • Textile exports during the period of April-February 2003-2004 amounted to $11,698.5 million as against $11,142.2 million during the same period in the previous year, showing an increase of around 5 per cent.

16. Role in the economy: Textile industry plays a significant role in the economy. The Indian textile industry is one of the largest and most important sectors in the economy in terms of output, foreign exchange earnings and employment in India . It contributes 20 per cent of industrial production, 9 per cent of excise collections, 18 per cent of employment in industrial sector, nearly 20 per cent to the country’s total export earnings and 4 per cent ton the GDP .

17. The sector employs nearly 35 million people and is the second highest employer in the country. The textile sector also has a direct link with the rural economy and performance of major fiber crops and crafts such as cotton, wool, silk, handicrafts and handlooms, which employ millions of farmers and crafts persons in rural and semi-urban areas. It has been estimated that one out of every six households in the country depends directly or indirectly on this sector.

18. Impact of covid-19: The Indian textile industry has taken a major hit due to COVID-19. This is because most of the Indian yarn exports are to China. The agency assumes that India’s exports will be substantially hit till 1HFY21. In fact, it has already reduced by more than 40% until January 2020 due to the US-China trade war . The majority of downstream players had to incur inventory losses due to the ongoing geopolitical tensions in crude oil. This further lead to the prices declining by more than 40% month on month in March 2020.

19. Major players: 1. Arvind Ltd Revenue:   Rs 7,229 Cr Employees:  42,000 Debt : Rs2,700 Cr Processing Capacity : 240 MMPA Arvind owns 22 global patents for environmental solutions, and is the largest fire protection fabric producer in the country; Also managing 15 global apparel brands of the likes of Tommy Hilfiger, US Polo, CK, GAP, Nautica, and Sephora.

20. 2. Raymond Ltd Market Cap:   3,443  Cr Stock P/E:  22.22 Dividend Yield:  0.53  % Sales Growth (3Yrs):  8.34   % Raymond has also been a leading player in Shirting fabrics and is the No.1 brand in the OTC space. A formidable player in the Denim space, Raymond is also the top producer & preferred supplier of high-quality Ring Denim to world’s leading Jeanswear brands.

21. 3. Vardhman Textiles Ltd Revenue: Rs 6,706 Cr Processing Capacity: 140 MMPA Employees: 22939 (Including contractual manpower) Debt: Rs 1,975 Cr Engaged in the business of manufacturing of Yarn, Fabric, Acrylic Fibre , Garments, Sewing Threads and Alloy Steel, the Group has over the years developed as a business conglomerate with presence in India and in 75 countries across the globe.

22. Exports : India is the world’s second-largest exporter of textiles and apparel, and the textile industry contributes significantly to the country’s economy, making up 7% of industry output, 2% of the national GDP, and 15% of the country’s total exports earnings. A third of India’s textile production is exported. India's Textile Exports was worth US$37.74 billion in 2017-18. The US and the European Union are the two largest markets for Indian textile exporters, followed by various Asian countries and the Middle East.

23. category Value of T&A Export in $million % Readymade garments 13511.7 49.42% Cotton textile 8908.09 32.58% Man made textiles 4454.92 16.29% Wool and woolen textile 292.56 1.07% silk 172.71 0.63% total 27340.07 Below is a breakdown of the various product categories under textiles and apparel exports, and their contribution in FY 2017/18 (data updated as of January 2018):

24. Drivers of exports: Rising outsourcing budgets of retail giants Indian companies evolving from mere converters to vendor partners of global buyers Large outsourcing orders helping Indian companies build capacities, lower their per unit cost and become more competitive Imposition of caps on certain import segments from China by EU and US given the surge in Chinese exports has opened up opportunities for India.

25. Imports: India’s import of textile and apparel from EU 28 has declined at -2% CAGR from 2013 to 2017. The decrease in imports in the previous year has reduced the share of EU-28 in India’s total imports from 8% in 2016 to 6% in 2017. India’s import of fibers and filament from EU-28 have declined at a CAGR of 13% and 12%, respectively. Fabrics and apparel account for over 54% of total imports from EU-28 and their imports have increased by 4% and 3 %, Respectively.

26. EU-27 Textile Imports country Growth % Share% 2013 Share % 2014 China -12.9 29.2 29.8 India -15.6 10.6 11.2 Turkey -15.3 16.7 17.5 Pakistan -9.7 7.8 7.7

27. Government initiative: P rogressive measures have been planned to strengthen the textile sector in India : • Technology Mission on Cotton (TMC) • Technology Upgradation fund Scheme (TUFS) • Setting up of Apparel Training and Design Centres (ATDCs) • 100 per cent Foreign Direct Investment (FDI) in the textile sector under automatic route. • Setting up two design centres in Gujarat in collaboration with National Institute of Fashion Technology.

28. • Setting up two design centres in Gujarat in collaboration with National Institute of Fashion Technology. • Setting up a Handloom Plaza in Ahmedabad with an estimated investment of US$ 24.6 million. • Revival plans of the mills run by National Textiles Corporation (NTC). Already, for the revival of 18 textile mills, US$ 2.21 million worth of machineries has been ordered for the upgradation and modernisation of these mills. • Setting up a handloom mall with an investment of US$ 24.6 million at Jehangir Mill in Ahmedabad. • Scrapping of the Textile Committee cess being collected from the textile and textile machinery industry under the Textile Committee

29. Opportunity: » Low per-capita domestic consumption of textile indicating significant potential growth. » Domestic market extremely sensitive to fashion fads and this has resulted in the development of a responsive garment industry. » India's global share is just 3% while China controls about 15%. In post-2005, China is expected to capture 43% of global textile trade. » Companies need to concentrate on new product developments. » Increased use of CAD to develop designing capabilities and for developing greater options.

30. Recent development: In Feb 2021, The Indian Government has announced the setting up of seven mega textile parks in the next three years. The government has also decided to rationalize the duties on raw material inputs to manmade textiles by reducing the customs duty rate on nylon chips, and nylon fiber and yarn to 5 %. In Feb 2021, Paraguay’s Ministry of Industry and Commerce announced that it will be investing USD 1.1 million in the manufacturing sector, mainly benefiting the clothing, textiles, and footwear industries, among other areas related to assembly operations.

31. Conclusion: A huge window of opportunity has opened up for the Indian textile industry which is fast closing up. Various players need to get act together. It’s now for players to make investments in building the capacities and making them integrated manufacturers. They need to invest more in R&D. This is the only way they can compete with the Chinese dragon . Despite the industry grows in the positive trend with the negligible R&D Expenditure, the Ministry of Textiles may focus on low-cost superior quality textile products since India is the destination of cheaper cost with superior Quality. The existing firms should plan in the long-run to enjoy the benefit of market opportunity by realizing the nearest competitors China whose R&D of the Textile industry is 5.4% average.

32. Thankyou - Prika P atel