Garima

Study of Indian Textile Industry An International Perspective
TABLE OF CONTENTS
1. Introduction 2. Global Scenario 3. Indian textile Industry (Profile) 4. India in the Global Context 5. x!ort Perfor"ance
#. Ste!s ta$en by Go%t. to boost textile ex!orts &. 'he textile (uota !olicy ). *n o%er%ie+ of ,'- and its effect on Indian 'extile Industry. .. S,-' *nalysis 1/. India0s !otential and ca!ability to ex!ort cotton yarn 11. 'he uro!ean 1nion in brief 12. 'he uro!ean 1nion 'extile Industry 13. 1 yarn "ar$et 14. 2e3ulations and !roduct characteristic of 1 15. India4 1 trade 1#. 2eco""endations to the Indian 'extile Ind 1&. Conclusion 1). 5iblio3ra!hy.
By : Garima Minocha
INTRODUCTION
Cotton and 6ute as the do"inant ra+ "aterials7 it utilises a !rocess of "anufacture +hich7 bein3 relati%ely strai3ht4for+ard and less ca!ital intensi%e is ca!able of bein3 !erfor"ed in or3anised as +ell as s"all and tiny units s!read o%er the len3th and breadth of the country and 7 abo%e all it !ro%ides a lin$a3e +ith traditional and cultural %alues that +e cherish. 'his industry touches u!on the li%es of our country "en4fro" culti%ators of cotton and 6ute to serculturists7 artisans7 +ea%ers and +or$ers en3a3ed in or3anised sectors or decentrali8ed sectors or s"all and tiny in the handloo" sector. *lthou3h the Indian textile industry has not been "ar$eted by dyna"is" and had been noted for its lac$adaisical !erfor"ance and co"!lacency and had e%en been re3arded as an ailin3 one7 it has actually dis!layed enou3h self4reliance and %i3our to re3ister co""endable 3ro+th. ,hile the excessi%e re3ulations and controls had been a ne3ati%e factor7 the !rotection and s!ecial su!!ort it had lon3 en6oyed did ha%e a !ositi%e effect. So +hen it +as ex!osed to the se%ere international co"!etition by o!enin3 u! the i"!orts7 thou3h 3radually and in !hases7 by re"o%in3 or that it +ould relaxin3 the earlier restrictions7 there +ere +ides!read and understandable a!!rehensi%e not be able to hold its o+n a3ainst the $een and in "any res!ects the une(ual forei3n co"!etition. 5ut sur!risin3ly and to its credit7 it has not only "ana3ed to sur%i%e but e%en sho+ so"e %i3orous 3ro+th in "any of its sectors +hich beca"e "ore efficient under the i"!etus and co"!ulsions of 3lobal co"!etition. In fact7 so"e are of the %ie+ that had it been ex!osed to the $een +inds of international co"!etition earlier7 it could ha%e beco"e "ore self4reliant and achie%ed 3reater !ro3ress7 li$e its counter!arts in other de%elo!in3 countries7 and this "i3ht +ell ha%e been the case7 by the !ro3ress it has achie%ed in the recent !ast. *t any rate7 it has !ro%ed its ca!ability to +ithstand the co"!etition in the do"estic as +ell as international "ar$ets. 1nli$e before7 it has had to co"!ete +ith i"!orted 3oods7 the 3ates for +hich had been o!ened7 and it has had to contend +ith the
By : Garima Minocha
co"!etition in the international "ar$ets for textiles7 +hich has been beco"in3 $eener. 'his +as not sur!risin3 as7 after all7 in a !rotected "ar$et there +as no need for it to exert "ore and ta$e ris$s +hen thin3s +ere co"fortable in a seller0s "ar$et. In this sense also the liberalisation !rocess can be said to ha%e had a salutary effect on the "anner in +hich the textile industry no+ o!erates. 'here has been a 3eneral realisation that the era of co"!lacency is o%er and co"!etition is a relentless reality that has to be faced. -f course7 e%erybody has not been able to effect the chan3es and ad6ust"ents in their "ind sets and "ethods of +or$in3 and the han3o%er of the !ast still !ersists and those +ho ha%e not "o%ed +ith the ti"es are !ayin3 their !enalty. 'he !rocess of +eedin3 out of the inefficient units is 3oin3 on and it is !art of the 3a"e of liberalisation and the "ar$et econo"y. 'he !ositi%e i"!act of liberalisation has been due both to the direct beneficial effect in ter"s of re"o%al of the re3ulations7 restrictions and controls7 as also the o%erall en%iron"ent +hich has been "ore conduci%e to 3ro+th. 9or exa"!le7 liberalisation has hel!ed the 3ro+th of the "iddle class7 +ith the lot of the +ea$er sections also ha%in3 i"!ro%ed7 resultin3 in the a!!reciable increase in the !er ca!ita consu"!tion of cloth. In turn this has hel!ed the 3ro+th of !roduction beyond that due to the increasin3 !o!ulation and the lar3er nu"ber of consu"ers. * 3reater sence of dyna"is" and readiness to acce!t ne+ challen3es has been 3enerated by the liberalisation in se%eral sectors of industry7 includin3 textiles. 'his accounts for the all round 3ro+th and i"!ro%e"ent in the !erfor"ance thou3h there ha%e been the una%oidable fluctuations in the fortunes due to %arious factors and the different and contrary effects on !articular sectors.
By : Garima Minocha
GLOBAL SCENARIO
'he 'extile Industry occu!ies a !lace of !ro"inence across the +orld. 'extile is the "ost international of all industries7 the first truly 3lobal industry. Its role in the econo"ies of "any countries7 both industriali8ed and de%elo!in37 is and re"ains i"!ortant. Considerin3 the +hole textile !i!eline fro" fiber !roduction to a!!arel "anufacturin37 the textile industry !ro%ides li%elihood to hundreds of "illions of !eo!le. Go%ern"ents ha%e reco3nised its !articular econo"ic and s!ecial role by accordin3 s!ecial treat"ent to the industry in the conduct of international trade. International trade in textile continues to re"ain hi3hly !rotected o+in3 to its i"!ortance and i"!act on the national econo"ies. 'he international trade in textile has been for a lon3 ti"e 3uided by the :9* under +hich "any bilateral a3ree"ent i"!osin3 (uantitati%e restrictions on i"!ort of textile and clothin3 fro" other countries ha%e been enforced in the !ast. 'urnin3 fro" the broad as!ects of 3lobal to the "ore s!ecific situation in textile and clothin3 trade7 recent trends are characteri8ed by continued 3ro+th 3lobally and a further ex!ansion in both ex!ort and i"!ort acti%ity. ,orld trade reached a total of ;24) billion in 1..3 (textiles ;115 billion7 clothin3 ;133 billion)7 re!resentin3 a 45 !er cent increase in %alue of 1.)) and a 1#/ !er cent 3ro+th fro" 1.)/. 'his trade has achie%ed a considerably better record than total +orld "erchandise trade +hich increased 31 !er cent bet+een 1.)) and 1..37 and )4 !ercent fro" 1.)/ and 1..3. It is also note+orthy that clothin3 trade has ad%anced at a faster rate than textile trade. 5et+een 1.)/ and 1..37 textiles trade 3re+ by 11/ !er cent7 +hile clothin3 trade ad%anced 22) !er cent. *nother re%ealin3 de%elo!"ent has been the shift in +orld tradin3 !atterns7 !articularly fa%ourin3 a nu"ber of *sian countries. In 1..2 about 34 !er cent of textile ex!orts and about 4& !er cent of clothin3 ex!orts ori3inated in *sian de%elo!in3 countries.
By : Garima Minocha
'extiles and clothin3 account for about ..1 !er cent of +orld "anufactured 3oods ex!orts or of #.5 !er cent of all "erchandise ex!orts. *ccordin3 to an esti"ate in 1..4 by +hat +as then the G*'' Secretariat7 the re"o%al of (uotas and a reduction in tariffs could add 1) !er cent to the %alue of trade in textiles (excludin3 clothin3 ) by 2//5.
By : Garima Minocha
INDIAN TEXTILE INDUSTRY : A PROFILE

'he textile industry in India ran$s second lar3est as far as its i"!act on Indian econo"y (+ith about 2/< share ) and e"!loy"ent o!!ortunities (of about three "illion direct and indirect 6obs) are concerned. 'his ancient and base industry 3a%e a foundation to the Indian industrialisation. ,ith first textile "ill set u! in 1)157 the de%elo!"ent +as so fast and co"!rehensi%e that no business house of i"!ortance did thin$ of an e"!ire +ithout a textile "ill. 'he textile industry is the lar3est industrial subsector ran$in3 second in India7 accountin3 for 2/ !er cent of industrial !roduction and o%er a (uarter of total ex!ort earnin3s. In 1.#/=#17 textiles accounted for 2. !er cent of the "anufacturin3 %alue added. *s +as to be ex!ected7 its share has declined o%er ti"e as India0s "anufacturin3 sector has di%ersified +ith the addition of ne+ fast4 3ro+in3 industries. >e%ertheless textiles still account for about 1/ !er cent of the %alue added in "anufacturin3 and about 1. !er cent of e"!loy"ent in the or3ani8ed sector in total industrial e"!loy"ent is "uch lar3er. If e"!loy"ent in the unor3anised sector is ta$en into account its share. 'he +ea%in3 sector of the industry s!ans the entire ran3e of technolo3y and cor!orate or3anisation fro" or3ani8ed sector "ills at one end to decentrali8ed traditional handloo" sector at the other7 +ith a %ery substantial decentrali8ed !o+erloo" sector in the "iddle7 +here indi%idual units are s"all but use "odern technolo3y in the for" of !o+erloo"s. COTTON TEXTILES 'he textile industry in India continues to be !redo"inantly cotton4based althou3h the share of cotton in the total ra+ "aterial re(uire"ents declined fro" .3 !er cent in 1.&/=&1 to )3 !er cent in 1..3=.4. the share of !olyester fiber in the total
By : Garima Minocha
fiber consu"!tion of the textile industry increased fro" less than 1 !er cent in 1.&/=&1 to 2 !er cent in 1.)/=.1 and further to ) !er cent in 1..3=.4. Cotton is "ainly culti%ated in the states of :aharashtra7 Gu6arat and :adhya Pradesh in the +estern re3ion7 Pun6ab7 ?aryana and 2a6asthan in the northern re3ion7 and *ndhra Pradesh7 @arnata$a and 'a"il >adu in the southern re3ion. India !roduces a %ery +ide ran3e of cotton %arieties and 3enerally has a sur!lus of lon3 and extra lon34sta!le cotton +hich is in hi3h de"and for ex!orts. India0s cotton yields are "uch lo+er than those !re%ailin3 in other "a6or cotton 3ro+in3 countries because of the inefficient use of land for 3ro+in3 cotton in India. Cotton !rices in India are 3enerally lo+er than +orld !rices. Cotton textiles accounts for around fi%e !er cent of the total %alue of !roduction in the or3anised "anufacturin3 sector. It +as the sin3le lar3est industry durin3 the early ei3hties accountin3 for nearly 12 !er cent of the industrial !roduction. ?o+e%er7 the industry 3re+ only by 2.4 !er cent !er annu" durin3 the ei3hties. *s of :arch 1..57 there +ere 173.5 textile hills in the or3anised sector7 of +hich7 2#& +ere co"!osite "ills. Aurin3 1.)/4)17 the country had 415 s!innin3 "ills and 2&) co"!osite "ills. 'he total s!innin3 ca!acity of the 173.5 "ills +as 2.7.1 "illion s!indles in :arch 1..5 as a3ainst 21.23 "illion in 1.)1. -%er one4third of the s!indles +ere in the co"!osite "ills. Boo"a3e in the or3anised sector7 has ho+e%er7 declined fro" 2/& thousand in 1.)1 to 15/ thousand in 1..5 losin3 3round to !o+erloo"s and handloo"s in the decentrali8ed sector. 'he textile industry !ro%ides direct e"!loy"ent to o%er a "illion !eo!le. 'extile industry is !redo"inantly cotton based. Cotton fiber accounts for o%er )/ !er cent of the ra+ "aterial consu"ed by s!innin3 "ills. ?o+e%er7 the share of "an4"ade fibers has been on an increase. 9ro" less than 12 !er cent in 1.)/4 )17 the share of "an4"ade fibers increased to 14 !er cent in 1../4.1 and future to 1. !er cent in 1..44.5.
By : Garima Minocha
Cotton is 3ro+n on o%er &.5 "illion hectares of land. Ca!acities to !roduce "an4 "ade fibers +ere %iscose sta!le fiber. Production of "an4"ade fibers increased substantially at the rate of 12 !er cent annu"7 durin3 the late ei3hties and by & !er cent !er annu" in the first half of nineties. Aurin3 1..14.27 "an "ade fiber !roduction declined by 2 !er cent7 but increased si3nificantly by 13 !er cent durin3 1..34.4. 'he "an"ade fiber industry recorded a 3ro+th rate of 5 !er cent in 1..44.5. 'he textile industry under+ent a "a6or structural transfor"ation durin3 the "id4 ei3hties follo+in3 the !rolon3ed stri$e in 5o"bay bet+een 1.)1 and 1.)3. * 'extile !olicy +as announced in 1.)5 and a 'extile :oderni8ation 9und +as created in 1.)# by the Industrial Ae%elo!"ent 5an$ of India +ith an initial cor!us of 2s. &.5 billion for a !eriod of fi%e years. 'he fund accelerated the !rocess of "oderni8ation of the textile industry. In *u3ust 1..17 the textile industry +as delicensed under the ne+ Industrial !olicy. 'he 'extile Control -rder7 1.)# +as re!ealed in Aece"ber 1..2 and +as re !laced +ith >e+ 'extile (Ae%elo!"ent and 2e3ulation) -rder7 1..3. 1nder the ne+ !olicy7 no !rior a!!ro%al of the 3o%ern"ent is necessary to set u! textile "ills7 includin3 !o+eloo"s. ?o+e%er7 the non4s"all scale industrial units +ere re(uired to obtain locational clearances. Aurin3 the !eriod 1.)54)# to 1..44.57 411 "ills +ere set u! +ith an additional 3.). "illion s!indles. >early #) !er cent of these +ere set u! after the announce"ent of the ne+ industrial !olicy in 1..1. *bout 2.1 "illion s!indles +ere added by 2&) "ills durin3 the three year !eriod. ?o+e%er7 the loo"a3e in the or3anised sector continued to decline. 'he nu"ber of co"!osite "ills co"e do+n fro" 2)2 in 1.)54)# to 2#& by the end of 1..44.5. Aurin3 the !eriod7 loo"s in the or3anised sector fell fro" 2/) thousands to 15/ thousands. 'he +ea%in3 acti%ity +as increasin3ly left to !o+erloo" and handloo" sectors. set u! in the se%enties. :a6or "an4"ade fibers used in "anufacture of textiles are !olyester fila"ent yarns7 !olyester sta!le fibers and
By : Garima Minocha
Production of yarn is "ostly concentrated in the "ill sector. Cotton yarn accounts for about three4fourths of the yarn !roduced in India. 5lended="ixed yarn accounts for about 1# !er cent and the re"ainin3 is 1// !er cent non4cotton yarn. Cotton yarn +hich accounted for o%er )2 !er cent of all the yarn !roduced durin3 the !eriod 1.)/4)1 to 1../4.17 lost 3round to blended and "ixed yarns. 'he share blended="ixed yarn rose fro" 11 !er cent in 1../4.1 to 1#.# !er cent in 1..44.5. In this cate3ory7 !roduction of !olyester=%iscose blended yarn accounts for nearly t+o4thirds of the o$uded yarn !roduction. can be blended +ith synthetic yarn. 'his case bein3 a close substitute for cotton. Cloth !roduction in the or3anised "ill sector declined by &.5 !er cent !er annu" durin3 the nine year !eriod ended 1..44.5. 'he fall in the "ill sector +as offset by 3ro+th in the decentrali8ed sector. ,ea%in3 in the !o+erloo" sector increased si3nificantly by ) !er cent annu" durin3 the nine year !eriod and by 4 !er cent in the handloo" sector. Si"ilarly7 !roduction in the hosiery sector increased 1/ !er cent. *s of 1..47 there +ere 1.3 "illion !o+erloo"s and 12.4 "illion handloo" +ea%ers in the country. Aurin3 1..44.57 the !o+erloo"s !roduced 1#751# "illion s(. "eters of fabrics. *l"ost all the 1// !er cent non4cotton fabrics are +o%en in the !o+erloo"s. Aurin3 1..44.57 the !o+erloo"s !roduced 57.)5 "illion s(. "eters of 1// !er cent non4cotton fabrics of the total #7)/1 "illion s(. "eters by all sector. Po+erloo"s are located in the states of :aharashtra7 Gu6arat7 'a"il >adu and to so"e extent7 in @arnata$a and 1ttar Pradesh. In :aharashtra7 !o+erloo"s are concentrated in 5hi%andi7 :ale3a on and chal$aran6i. In Gu6arat7 they are in Surat.
By : Garima Minocha
Certain textile ite"s are reser%ed for !roduction only in the handloo" sector. *ccordin3 to a !olicy7 s!innin3 "ills in the or3anised sector "ust su!!ly 5/ !er cent of their yearn dis!atches to the decentrali8ed sector in ban$ fro". *ccordin3 to the *nnual Sur%ey of Industries7 there +ere )7).# factories in the cotton textile industry durin3 1..24.3. 'hese factories incurred a loss of 2s. ) billion durin3 1..24.3. 'he )7).# factories e"!loyed )/& thousands !ersons. 'he "ill sector accounted for 2/ !er cent of the nu"ber of factories in cotton textiles. In ter"s of e"!loyees and %alue of out!ut7 the share of the "ill sector +as &2 !er cent and &3 !er cent res!ecti%ely. Ginnin37 cleanin3 and balin3 acti%ity +as carried on in 37241 factories e"!loyin3 1# !er cent of the +or$ force in cotton textiles. 'he out!ut fro" this acti%ity +as %alued at 2s. 2&.& billion. Char$as $hadi7 handloo" and !o+erloo" accounted for less than 4 !er cent the total %alue of out!ut in the factory sector. 'he "ar$et for fabrics dis!ersed "uch "ore than that of yarn as fabric "anufacture has "o%ed increasin3ly in to the !o+erloo" sector. *s of early Aece"ber 1..57 there +ere #5 !ro6ect includin3 ne+ s!innin3 "ills and ex!ansion of existin3 "ills +ere on hands. the a%era3e en%isa3ed in%est"ent in these !ro6ect is 2s. 2/7 /// !er s!indle. *bout 4) "ills +ith an a33re3ate s!innin3 ca!acity of 1.14# "illion s!indles +ere scheduled for co"!letion durin3 the second half of 1..54.#. 'hese 4) "ills entail an outlay of 2s. 22.5# billion. -f these7 1& "ills +ere 1// !er cent ex!ort oriented units. Aurin3 1..#4.&7 12 "ills +ere scheduled for co"!letion +ith an a33re3ate ca!acity of 244 thousands s!indless. 'he lar3est in%est"ent in ter"s of additional ca!acity bein3 set in Shree @rishna Petro Carns7 a relati%ely ne+ co"!any. It is ex!andin3 its Dalued ca!acity by t+o hundred thousand s!indleds at ca!ital cost of 2s. 1.5 billion.
By : Garima Minocha
'he lar3est in%est"ent in ter"s of ca!ital cost in cotton textiles in by Gonter"ann4Pei!ers (India) Btd. an ls!at (:ittals) 3rou! co"!any. the co"!any is settin3 u! a ne+ s!innin3 "ill at 5al3arh in ?i"achal Pradesh. It +as scheduled for co"!letion in Eune 1..#. 'he "ill ha%e one hundred thousand s!indles +ith an en%isa3ed ca!ital outlay of 2s. 3.5 billion. Gana!ati x!ort is settin3 u! a ne+ unit in lndore +ith a ca!acity to !roduce
137/// tonnes of cotton yarn !er annu" at a ca!ital cost of 2s. 2.&5 billion. 'hirteen deni" !ro6ects are bein3 set u! to install a total ca!acity of 15#.2 "illion "eters at total cost of 2s. 1&.3&/ billion. -f these7 a ca!acity of 42.) "illion "eters +as ex!ected to be co""issioned by :arch 1..# and a future 5/ "illion "eters +ould be added by :arch 1..&. *r%ind :ills is ex!andin3 its deni" ca!acity fro" && "illion tonnes to 1// "illion tonnes at a ca!ital cost of 2s. 2.5 billion7 Suryala$s"hi Cotton is settin3 u! a ne+ unit for a ca!acity of 2/.4 "illion tonnes at a ca!ital cost of 2s. 2./&/ billion. Man-Made Textiles *s "entioned in the earlier section7 the fiber "ix of the textile industry had under3one a si3nificant chan3e since the early ei3hties. 'he 'extile Policy e"!hasi8es increased a%ailability of "an4"ade fibers throu3h additional ca!acity creation and !ro3ressi%e reduction in fiscal le%ies on "an4"ade fibers and inter"ediates. 'here are about fifty co"!anies "anufacturin3 %arious "an"ade fibers and yarns7 etc. Polyester fila"ent yarn is by far the "ost !o!ular synthetic fiber in India. 'his is different fro" the trend else+here in the +orld +here !olyester sta!le fiber is the "ore !o!ular fiber. Production of !olyester fila"ent yarn ex!anded at the rate of 33 !er cent !er annu" durin3 the !eriod 1.&54&# to 1)/4)1. In the first half of the ei3hties7 this 3re+ by 45 !er cent annu" and after a brief slo+in3 do+n to 22 !er cent in the
By : Garima Minocha
second half of the ei3hties7 the 3ro+th shot u! to 5) !er cent in the early nineties a3ain. Polyester fila"ent yarn is used lar3ely in the !o+erloo" sector. Production of !olyester sta!le fiber +hich is used for blendin3 +ith cotton and %iscose yarn7 increased at the rate of & !er cent annu" durin3 se%enties 14< !er annu" durin3 the early ei3hties7 2# !er cent in the late ei3hties7 and early &/ !er cent annu" in the early nineties. 'he !roduction of "an4"ade fibers and yarns (excludin3 try yarns) increased "ore than four ti"es7 fro" 1)&7.// tonnes in 1.)/=)1 to &)&7#// tonnes in 1..3=.47 'his 3rou! includes both cellulosic and synthetic fibers and yarns. 'he !roduction of cellulosic fiber and yarn increased relati%ely slo+ly fro" 1247/// tonnes to 2257/// tonnes. ?o+e%er7 the !roduction of synthetic fibers and yarns increased "uch faster fro" #37.// tonnes to 5#25// tonnes. In Aece"ber 1..47 India si3ned an *3ree"ent on 'extiles and Clothin3s +ith the 1S* and the C. India a3reed for a 3radual reduction in tariffs and re"o%al of i"!ort restrictions in bar3ain of additional access for Indian textiles in these t+o "ar$ets. India has a3reed to reduce the tariff rates on yarns and fibers and 4/ !er cent in the case of yarns by 1..). 5y 2///7 the duty on both the ite"s is en%isa3ed to decline to 2/ !er cent. :ost lar3e "an4"ade fiber "anufactures are di%ersified co"!anies. 2eliance Industries7 the lar3est "anufacturer of !olyester fila"ent yarn and !olyester sta!le fiber is also a "a6or !roducer of fiber inter"ediates7 !oly"ers and textiles. Si"ilarly7 the 5irla 3rou! co"!anies7 Grasi" and Century 'extiles7 the lar3est !roducers of %iscose sta!le fiber and %iscose fila"ent yarn rece!ti%ely are hi3hly di%ersified co"!anies. Substantial ne+ ca!acities ha%e been established in the !olyester fila"ent yarn industry since 1../4.1. San3hi Polyesters7 2ay"onds7 Synthetics and Eindal Polyesters are a"on3 the lar3er ne+ ca!acities set u! in the early nineties. 2eliance Industries continues to re"ain the lar3est P9C !roducer. *lthou3h its "ar$et share has reduced fro" 3) !er cent in 1../4.1 to 32 !er cent in 1..44.57
By : Garima Minocha
it is "iles ahead of its nearest ri%al4San3hi Polyester +hich has a share of only #.4 !er cent. 2eliance Industries has a !redo"inant share of the !olyester sta!le fiber "ar$et. Its share has increased fro" 25 !er cent in 1../4.1 to 43 !er cent. 'he co"!any0s !roduction nearly doubled bet+een 1../4.1 and 1..44.5. *lthou3h the !roduction of "an4"ade fibers and yarns ha%e increased (uite i"!ressi%ely o%er the !ast t+o decades or so7 do"estic !roduction is still not enou3h to "eet de"and. Aurin3 1..34.47 1.&&/ tones of !olyester fila"ent yarn7 1&.5&. tonnes of !olyester sta!le fiber7 #.22# tonnes of acrylic sta!le fiber7 173## %iscose sta!le fiber as +ell so"e %iscose fila"ent yarn and nylon fila"ent yarn +as i"!orted. Aurin3 1..44.57 i"!ortance of !olyester sta!le fiber +as ta$en off the -!en General Bicence list but has since been restored. I"!orts of PS9 and P9C +ere 3reater than 2/7/// tonnes each in the year. I"!orts of DS9 had increased substantially durin3 the year as +ell. *s of Eanuary 1..#7 there +ere fifty4fi%e in%est"ent !ro6ects under
i"!le"entation to set u! ca!acities in the "an4"ade fibers industry. 'hese !ro6ects en%isa3ed a total in%est"ent of 2s. 547)5/ billion. 5esides7 in%est"ents +orth 2s. 52.35/ billion in ca!ital costs in 23 !ro6ects +ere ex!ected to be co""issioned in 1..54.#. *nother 2/ !rofiles +ith about 2s. 34.12/ billion +ere scheduled to co"!leted in 1..#4.&. GRO T! IN T!E CAPACITY IN T!E ORGANISED MILL SECTOR
Yea" 1.#1 1.&1 1.)/4)1 1.)54)# 1../4.1 1..14.2 S#$-Mills 1.2 3&3 415 &/2 &&& )42 C%&' Mills 2)& 2.1 2&) 2)2 2)5 2&1 T%tal 4&. ##4 #.3 .)4 1/#2 111& S#indles (Mn) 13.## 1&.)) 21.23 2#./2 2#.#& 2&.)2 R%t%"s (*+++,) 4 4 5 11.51 ##..2 12... L%%&s (*+++1.. 2/).4/ 2/&.. 2/).44 1&&.)1 1&2.)4
By : Garima Minocha

1..24.3 1..34.4 1..44.5 1..54.# 1..#4.& )&4 ./. 114) 12.4 1322 2#) 2## 2#) 2&5 2)1 1142 11&5 141# 15#. 1#/3 2)./. 2).#/ 3/.& 31.&5 32.1 12#.#) 13..3 1)5.). 22#./3 23/.// 1#2.4. 14...2 13..45 132.1) 13/.11
CLOSURE OF COTTON.MAN-MADE FIBER TEXTILE MILLS

/ea" M%nt$ End 1.)#4)& 1.)&4)) 1.))4). 1.).4./ 1../4.1 1..14.2 1..24.3 1..34.4 1..44.5 1..54.# Aec. .# S#innin2 4. )1 )3 ## 5/ #) #4 &5 &4 1// 1/) N% %0 Mills C%&#%site 41 52 5. 55 55 #2 5. 5& 5) &1 .1 T%tal ./ 133 142 121 1/5 13/ 123 132 132 1&1 1.. Installed Ca#a1it/ S#indles (+++) 23)4 335) 3354 33.4 312# 3)23 352/ 35./ 3#52 4##) 52&# R%t%"s (N%s)' 4 4 4 4 4 ))) 1&&# 3232 3./4 #5). ##44 L%%&s (++) 25. 332 3&. 34. 352 4/. 3## 3#2 3## 45/ 53. E&#l%/ees %n R%ll (+++) 12& 1#1 1)# 15) 1#1 1.4 1&) 1&3 1&) 22) 244
By : Garima Minocha
NO' OF MILLS IN SELECTED STATES

>a"e of the State=1nion F 'erritory Gu6arat 'a"ilnadu *ndhra Pradesh >o. of "ills >a"e of the State=1nion 'erritory :aharashtra 1ttar Pradesh @arnata$a >. of "ills
#2 35 1&
5# 35 15
By : Garima Minocha
INDIA IN T!E GLOBAL CONTEXT

It is of si3nificance that +hile the +orld ex!ort of textiles and clothin3 bet+een 1.). and 1..37 increased by around 3# !er cent7 India0s ex!orts of textiles and clothin3 increased by al"ost #) !er cent durin3 this !eriod. 'he textile sector also ha!!ens to be net forei3n exchan3e earner since the i"!ort content in the 3oods ex!orted is %ery s"all co"!ared to other "a6or ex!ort !roducts. India0s "ar$et share in the +orld ex!orts of textiles and clothin3 is around 2.5<. 'he "a6or ite"s of ex!ort fro" India include cotton textiles and ready"ade 3ar"ents includin3 hosiery and $nit+ears. ,hile the share in +orld ex!ort of ready"ade 3ar"ents in 1../ for ?on3 @on3 13.5< China ).5<7 South @orea &<7 and 3< each for 'hailand and 'ur$ey. 'he share of 3ar"ents in the total ex!orts trade of India sho+ed a substantial increase fro" &< in 1.)/ to o%er 15< as on today. 'he trends in textiles and clothin3 ex!ort fro" %arious *sian countries includin3 India indicate that *sian countries +ould ha%e to !lay a "a6or role in the areas of cotton and cotton blended textiles and ready"ade 3ar"ents for +hich there exits a tre"endous sco!e. :an4"ade fabric 3ar"ents share in India0s 3ar"ents ex!orts increased fro" 15.2#< in 1.)/ to 34.2&< in 1../7 +hile the share of cotton 3ar"ents decreased fro" )1.12< to #3...<. 'he other i"!ortant trend in India0s 3ar"ents ex!orts is the substantial increase in ex!orts of $nit+ears fro" 1..5< of total 3ar"ents ex!orts in 1.)& to 2#< in 1..2. India0s share in +orld trade7 ho+e%er7 is belo+ 3< (ran$ed 13th) +hereas her "ain co"!etitors are "uch ahead7 the G5i3 9our0 na"ely ?on3 @on37 South @orea7 'ai+an and China fi3ure +ithin the to! & leaders to3ether co%erin3 nearly 3&< of the total +orld trade. *!art fro" these countries7 so"e of the uro!ean countries li$e Italy7 Ger"any7 9rance7 Portu3al7 'ur$ey7 1@ and >etherlands co%er 2)< of the +orld trade. >e+ly e"er3in3 ex!ortin3 countries in the *sian re3ion such as 'hailand7 Indonesia7 :alaysia and Sin3a!ore co%er nearly ).1< of the +orld trade. India0s nei3hbourin3 countries na"ely Pa$istan7 5an3ladesh
By : Garima Minocha
and Sri Ban$a ha%e also "ade dent into the +orld "ar$et by ha%in3 a share 2.&<. EXPORTS OF TEXTILES 3 CLOT!ING Yea" Textile Ex#%"t (In 4illi%n Us5) ,orld India0s < share of x!orts x!orts India0s x!orts 1/..31 2.53 2.31 11&.42 2..3 2.5/ 112.#& 2..2 2.5. 12..// 3.45 2.#& 1)2.// 3.2 4
ORLD AND INDIA
1..1 1..2 1..3 1..4 1..5
Cl%t$in2 Ex#%"ts (In Billi%n US5) ,orld India0s <Share of x!orts x!orts India0s x!orts 115.&1 2.53 2.1. 13/.5# 3.1/ 2.3& 12).4/ 2..& 2.31 13..&/ 3.4/ 2.43 4 4 4
LEADING EXPORTERS OF TEXTILES IN 6778 3 6779

C%:nt"/ Ex#%"ts in Billi%n US5 1..4 ?on3 @on3 Ger"any China Italy @orean 2e!ublic Chinese 'ai!ei 5el3iu"4Buxe"bour3 Ea!an 1nited States 9rance 1@ Pa$istan India >etherlands Indonesia 12.5& 12.5& 11.)2 1/.)# 1/.#. 1/.2/ #.)/ #.&) #.54 #.22 4.3& 3... 3.45 2.#. 2.5/ 1..3 11.21 11.#3 ).&/ 1/./4 )..5 ).1) #.22 #.&2 #./2 5.43 3.)/ 3.51 2..2 2.4) 2.#4 1..4 1 2 3 4 5 # & ) . 1/ 11 12 13 14 15 Ran; 1..3 2 1 5 3 4 # ) & . 1/ 11 12 13 14 15
RECENT TRENDS -ur textile ex!orts durin3 the current year till Eanuary7 G.&7 a"ounted to a!!roxi"ately )21...) "illion 1S dollars (e(ui%alent to 2s. 2.11&.5& crores) +hich re!resents an increase of 11.2< in dollar ter"s and 1..2< in 2u!ee ter"s o%er the achie%e"ent durin3 the corres!ondin3 !eriod of the !re%ious year.
By : Garima Minocha
*3ainst an ex!ort tar3et of 1/7/2/ "illion dollars fixed for the ex!orts of textiles durin3 1..#4.&7 the achie%e"ent durin3 the first ten "onths has been )2<7 +hich is sli3htly less than the ex!ected !rorate achie%e"ent. It is ex!osed that the tar3et +ould be achie%ed by the end of the financial year. SECTOR ISE ANALYSIS OF TEXTILE EXPORTS
C%tt%n Textiles Cotton 'extiles i.e. cotton yarn7 fabrics and "ade4u!s
("ill"ade=!o+erloo"=handloo")7 co"!rise rou3hly 2=3rds of our ex!orts of cotton7 sil$7 +oollen and "an4"ade fiber textiles !ut to3ether. * tar3et of 35&/ "illion 1S dollars has been fixed for the ex!orts of cotton textiles durin3 1..#4.&. Aurin3 the current year(u! to Eanuary G.&) ex!orts of cotton textiles a"ounted to 3125.2. "illion 1S dollars and re3istered a 3ro+th of 21< as co"!ared to the achie%e"ent durin3 the corres!ondin3 !eriod of last year. 'he subsector+ise ex!orts of cotton textiles ha%e been as follo+s. 6' C%tt%n Textiles (Mill&ade.P%<e"l%%&)
x!orts of :ill"ade and Po+erloo" Cotton 9abrics and :ade4u!s durin3 *!ril Eanuary G.& a"ounted to 153&.#. "illion 1S dollars (e(ui%alent to 2s. 544#..4 crores)7 re3isterin3 an increase of 1/.)< as co"!ared to the achie%e"ent of 13))./4 "illion 1S dollars durin3 the sa"e !eriod of last year. =' C%tt%n Textiles (!andl%%&)
x!orts of Cotton ?andloo" 9abrics and :ade4u!s a"ounted to 3&/.## "illion 1S dollars (e(ui%alent to 2s. 1312... crores) durin3 *!ril 4 Eanuary G.& a3ainst 3#..54 "illion 1S dollars achie%ed in the sa"e !eriod of the !re%ious year7 sho+in3 a "ar3inal 3ro+th. 'he reason for the co"!arati%ely slo+ 3ro+th +as the continued recession in the "a6or i"!ortin3 countries %i8. the 1S*. 8' C%tt%n Ya"n : 1 and the
By : Garima Minocha
x!orts of cotton yarn ha%e traditionally been re3ulated +ithin a (uantitati%e ceilin3 fixed on a year to year basis +ith a %ie+ to chec$in3 unusal !rice fluctuations and ensurin3 that ade(uate su!!lies are a%ailable for the +ea%ers of the decentralised sector. *fter careful consideration of all rele%ant factors such as !roduction and do"estic de"and in res!ect of ra+ cotton7 !roduction and !rices of cotton yarn7 re(uire"ent of yarn for the decentralised handloo" sector etc7 the Go%ern"ent had announced a ceilin3 of )/ "illion $3s. for ex!orts of coton yarn in the count 3rou! 144/s durin3 the calender year 1..#. 'he ceilin3 li"it had been enahnced to 11/ "illion $3s for 1..#. 'he "inistry has also been follo+in3 an increasin3ly liberal a!!roach in ter"s of exe"!tin3 certain cate3ories of yarn ex!ots fro" the !re%ie+ of ceilin37 based on considerations such as co"!arati%ely hi3her ex!ort earnin3s for final counts and !rocessed yarn7 ex!ort obli3ation to be co"!ulsorily dischar3ed on account of the ex!ortin3 units bein3 1//< -1s= PCG licensees etc. 'he cate3ories of ayrn ex!orts exe"!ted fro" the ceilin3 for 1..& are as belo+ H i) ii) iii) i%) %) %i) x!orts by 1//< -1s x!orts of cotton yarn of 41s and abo%e counts. x!orts a3ainst i"!orts of ra+ cotton x!orts to the extent of obli3ation under the PCG Sche"e x!orts to (uota countries x!orts of !rocessed yarn
* ceilin3 of 12/ "illion $3s. has been fixed for ex!orts fo cotton yarn durin3 1..&. Ga"&ents
By : Garima Minocha
*3ainst a tar3et of 4&5/ "illion 1S dollars fixed for the year 1..#4.&7 3er"ent ex!orts durin3 *!ril4Eanuary G.&7 a"ounted to 3)##.4# "illion 1S dollars (e(ui%alent to 2s. 13#.#.12)7 sho+in3 an increase of &.&< o%er the !erfor"ance durin3 the corres!ondin3 !eriod of the last year. In ter"s of 2u!ees7 ex!orts re3istered a 3ro+th of 15.5< durin3 this !eriod. 'he "a6or i"!orters of our ready"ade 3ar"ents are the .1. the 1.S.*. Canada7 the 1.*. . and Ea!an. %%len Textiles x!orts ,ollen 'extiles a"ounted to 23..)5 "illion 1S dollars (e(ui%alent of 2s. )4..#2 crores) durin3 *!ril Eanuary G.&7 sho+in3 an encoura3in3 3ro+th of 44< o%er the !erfor"ance durin3 the corres!ondin3 !eriod of the last year. Man-&ade 0i4"e(MMF)Textiles x!orts of "an4"ade fibre textiles7 a"ounted to &3#.2# "illion 1S dollars (e(ui%alent to 2s. 2#/)./# crores) durin3 *!ril4Eanuary 0.& sho+in3 a decline of #.4< . 'he "a6or i"!orters of our "an4"ade fibre textiles are the 1nion and the 1.*. . uro!ean
Sil; Textiles
Sil$ ex!orts a"ounted to 2/4.3. "illion 1S dollars (e(ui%alent to 2s. &24./1 Cores) durin3 *!ril4Eanuary 0.& as co"!ared to the !erfor"ance of 214.#2 "illion 1S dollars durin3 the sa"e !eriod last year and sho+ed a ne3ati%e 3ro+th of 4.)<.. 'he ne3ati%e 3ro+th in ex!orts +as !ri"arily attributed to the continued recession in uro!e and the 1.S.*.
C%i"
Coir ex!orts a"ounted to 4&.&3 "illion 1S dollars (e(ui%alent to 2s. 1#../. crores) durin3 *!ril 4 Eanuary G.& a3ainst 52.44 "illion 1S dollars in the sa"e !eriod of the !re%ious year and sho+ed a ne3ati%e 3ro+th of .<.
By : Garima Minocha
MA>OR MAR?ETS FOR INDIAN EXPORTS

D:ali : India has e"er3ed as the third lar3est ex !orter to Aubai in 1..57 after Ea!an and China. Aubai0s "ain i"!orts fro" India include textiles7 Ea+ellery7 che"icals7 en3ineerin3 3oods and leather articles. 'hus India if ado!ts the !ro!er strate3y for Aubai0s textile "ar$et7 then Aubai can e"er3e as one of the "a6or "ar$ets for India. E:"%#ean E1%n%&i1 C%&&:nit/ : ,ith C beco"in3 a sin3le "ar$et
dis!arities in i"!ort arran3e"ents for !roducts arri%in3 fro" third countries ha%e been abolished. 'hus7 there is a tre"endous sco!e for India to occu!y a "a6or share in ex!orts of textiles to ter"s of (uality. United States and E:"%#ean Uni%n: Go%ern"ent has entered into t+o se!arate a3ree"ents at ,ashin3ton and 5russels +ith its "a6or tradin3 !artners7 1S and C. *s !er a3ree"ents7 entire textile "ar$et +ould be o!en by the year 2/// and the Centre has "ade co""it"ents not only on tariff cut but also on further reduction in 1..) and 2///. 'he tariff on fibres +ill not be "ore than 2/ !er cent in 2///7 bet+een 2/ and 3/ !er cent for different yarn cate3ories and 3/435 !er cent for fabrics. 'he !ea$ duty on a!!arels +ill be 4/ !er cent. 9ollo+in3 the a3ree"ent7 the 3o%ern"ent7 has already allo+ed i"!ort of all ty!es of fabric7 "ade4u!s and 3ar"ents throu3h S!ecial I"!ort Bicence (SIB). :oreo%er7 the ite"s li$e !olyester sta!le fibre7 cotton yarn7 +oollen yarn and different industrial fabrics ha%e been !ut under -!en General Bicence (-GB). este"n E:"%#e : 5et+een 1.)5 and 1..27 i"!orts of yarn and fabrics into ,estern uro!e rose by bet+een 4< and )< yearly and i"!orts or a!!arel durin3 the sa"e !eriod ex!anded by bet+een 15< and 2/<. 'he other "ar$ets for Indian textiles ex!orts include 5ritain7 'ai+an7 Sin3a!ore7 'ur$ey7 ?on3 @on3 7 South @orea7 5an3ladesh7 >or+ay7 9inland7 *ustralia7 C7 !ro%ided India fulfills the de"and of C in
By : Garima Minocha
Canada7 Ea!an7 :auritius7 Saudi *rabia7 'hailand7 5ra8il7 South *frica7 S!ain7 S+it8erland7 C8ech 2e!ublic7 ?un3ary7 ?oland7 2o"ania7 and Batin *"erica. 3ra!h44
By : Garima Minocha
EXPORT PERFORMANCE
'he Indian textile industry has e"er3ed as a "a6or forei3n exchan3e earner for the country. It accounts for about one third of the total country0s ex!ort earnin3s. 'he "a6or "ar$ets for Indian textile !roducts are uro!e and 1S* i"!ortin3 lar3e !art of their re(uire"ents fro" India. *"on3 the total ex!orts of textile ite"s fro" India7 Ger"any alone accounts for 31< +hich is li$ely to be doubled by turn of the century. In s!ite of hi3h installed ca!acity=!roduction7 a"!le a%ailability of ra+ "aterial s$illed and abundant "an !o+er and %ery lon3 history of Indian textile industry7 its share in total +orld trade in textiles is "ere 2.3< on 1S; ter"s. 'his is "ainly due to %ery lo+ %alue=unit relation on account of the lo+er (uality of the !roduct. Generally India is %ie+ed as a chea! and lo+ %alue !roduct su!!lier and lot needs to be done for chan3in3 this i"a3e. ?o+e%er7 recent liberalisation !olicy ado!ted by the Go%ern"ent o!ened u! ne+ a%enues for settin3 u! ex!ort oriented units +ith latest state4of4the art technolo3y and ho!efully the sa"e +ould be able to su!!ly (uality !roducts of international standard for the ex!ort "ar$et. Cet7 threats are not o%er. 'he !hasin3 out of G:9*0 and entry of GG*''0 shall "a$e Indian !roducts susce!tible to the co"!etition fro" !roducts of other de%elo!ed as +ell as de%elo!in3 countries li$e China7 Indonesia7 5an3ladesh7 Sri Ban$a7 Pa$istan7 etc. 'he :inistry of 'extile deals interalia7 +ith textile ex!orts. 'extile ex!orts (excludin3 6ute and handicrafts) can be broadly classified as follo+s. 1) 'extiles. a) Carn b) 9abrics c) :ade4u!s 2/) Clothin3 (also $no+ns as ready "ade) 3ar"ents or a!!arel of Cotton ,ool7 :an "ade 9ibres and Sil$
By : Garima Minocha
3)
Coir
9ro" the !ea$ share of 5) !er cent of all de%elo!in3 country ex!orts of textiles (includin3 3ar"ents) in 1.537 India0s share fell !reci!itously to a "ea3er ) !er cent by 1.#.. *t !resent7 it is around 2 !er cent. 'he ex!ort !erfor"ance of textiles i"!ro%ed in the 1.)/s7 +ith ex!orts 3ro+in3 at the rate of 15.) !er cent annu" bet+een 1.)3=)4 and 1..3=.4. In the fourfold increase in earnin3s fro" textile ex!orts in the decade endin3 1..3=.47 the do"inant contribution +as "ade by cotton textiles. ?o+e%er7 ex!orts of textiles fro" "an4"ade fibres also increased in i"!ortance so as to increase their share fro" less than & !er cent in 1.)3=)4 to al"ost 2/ !er cent in 1..3=.4. In the s!here of ex!orts7 the textile industry "a$es a "a3nificent contribution to the extent of 3/ !ercent of the total forei3n exchan3e earnin3s of the country. >o doubt7 but for the ex!orts of textiles7 the country0s balance of !ay"ents !osition +ould be !recarious. x!orts7 +hich ha%e reached the fi3ure of so"e ;. billion7 +hich e%en the o!ti"ists +ere findin3 it difficult to i"a3ine a decade a3o7 are increasin3 Go%ern"ent of India7 has fixed a tar3et to ex!ort textiles +orth ;2/ billion for the year 2/// *.A. +hich7 thou3h a"bitious is not unrealistic and is %ery li$ely to be attained if so"e constraints are re"o%ed.
By : Garima Minocha
EXPORTS OF TEXTILES@ 67A6.A=-6778.79 (5 MILLION)
Yea"
C%tt%n textiles (&an -&ade.#%<e"l%%&) in1l:din2 /a"n 31#.) 325.2 3/).. 3.#.# 3)4 43).# &.#.# &3/.2 )./.) 1143.3 12)4.3 125#./ 15.4.5
C%tt%n textiles (!andl%%&) 13&.4 133.) 121.) 141.# 131.. 12..& 1)4.1 1.#.2 2/5.3 22& 2)1.# 33..1 413.&
Man&ade 0i4"e textiles 41.& 5&.1 4..& 45.4 4/.) 53.4 122.3 1)5.) 353.. 354.2 445.1 33) 5)5.)
%%len textiles
Sil; textiles
T%tal
1.)1=)2 1.)2=)3 1.)3=)4 1.)4=)5 1.)5=)# 1.)#=)& 1.)&=)) 1.))=). 1.).=./ 1../=.1 1..1=.2 1..2=.3 1..3=.4
1#).. 1&).5 11..2 12).3 124.& 135.5 125.3 1)&.) 2#1 51.4 #).1 1/2.5 142..
&&.& )5.& .1.4 1/3.4 12&.& 152.4 153.) 1)..2 1)..1 243 2&4.2 23#.2 252.5
&42.5 &)/.3 #.1 )15.3 )/..1 ./..# 13).1 14)..2 1.//.1 2/13./ 2353.3 2355.5 2.)..4
By : Garima Minocha
STEPS TA?EN BY T!E GOBERNMENT TO BOOST TEXTILE EXPORTS

Go%ern"ent ha%e been ta$in3 a nu"ber of ste!s to boost textile and 3ar"ent ex!orts7 so"e of +hich are as follo+s. 1. In order to boost textile ex!orts7 the x!ort Pro"otion Councils ha%e been
ta$in3 a nu"ber of ste!s +hich include s!onsorin3 5uyer Seller :eets7 !artici!atin3 in fairs in "a6or "ar$ets7 releasin3 ad%ertise"ents in forei3n trade "a3a8ines and has also contributed to !roduct de%elo!"ent and (uality u!3radation throu3h a!!ro!riate trainin3 !ro3ra""es etc. 2. 1nder the CG Sche"e7 ex!orters can i"!ort Ca!ital 3oods at confessional II: Policy7 a ne+ +indo+ has
duty of 15< a3ainst an ex!ort obli3ation of four ti"es the CI9 %alue of i"!orts +ithin a !eriod of fi%e years. In the re%ised been o!ened under the CG Sche"e +hich !er"its i"!orts at 8ero rate of
duty on the "achinery ite"s ha%in3 a %alue of 2s. 2/ crores and abo%e7 sub6ect to a sti!ulated ex!ort obli3ation. 3. *ll textile and 3ar"ent "achinery ite"s ha%e been !laced outside the ne3ati%e list. 'hese ite"s can be i"!orted sub6ect to i"!ort duty. 4. I"!orts of second hand textile and 3ar"ent "achinery7 ha%in3 a residual life of "ore than fi%e years are also allo+ed +ithout any licensin3 re(uire"ent. 5. *d%ance Bicenses are issued on the basis of s!ecific in!ut4out!ut nor"s and enable ex!orters to i"!ort the ra+ "aterial re(uired for "anufacturin3 ex!ort !roducts. 9or 3ar"ent ex!orters7 a s!ecial sche"e called the S!ecial Dalue 5ased *d%ance Bicence Sche"e has also been !ro%ided. #. Go%ern"ent ha%e introduced full con%ertibility of the 2u!ee on trade as +ell as current account7 in order to sti"ulate ex!ort 3ro+th. 'he +hole re3i"e of I"!ort Per"its has been dis"antled and al"ost all i"!orts can be "ade freely (exce!t those included in the ne3ati%e list).
By : Garima Minocha
&. 'here has been a !ro3ressi%e reduction in i"!ort duties on al"ost all ite"s of ca!ital 3oods and ra+ "aterials7 consu"ables7 co"!onnets etc. In 1..#4.&7 the Custo"s duty on a nu"ber of +ea%in37 !rocessin3 and 3ar"ent "anufacturin3 "achinery ite"s had been reduced and fixed at 1/< . In the 1nion 5ud3et 1..&4.)7 the custo"s duty on certain additional !rocessin3 "achinery ite"s has been !ro!osed to be reduced to 1/<. ). 1nder the Auty Ara+bac$ Sche"e7 Central xcise and Custo"s duties !aid
by ex!orters +hile underta$in3 ex!ort !roduction are refunded to ex!orters7 after shi!"ents are effected. 'he ob6ecti%e of the syste" is to reduce the burden of indirect taxes on ex!orts and "a$e the" "ore co"!etiti%e in the international "ar$ets. 'he dra+bac$ rates for 3ar"ent and $nit+ear has been increased in the year 1..54.#. .. x!orters are eli3ible for concessional rates of interest for the credit they a%ail the"sel%es fro" co""ercial ban$s for their +or$in3 ca!ital re(uire"ents. 'here are different interest rates for credit7 de!endin3 u!on the !eriod of the credit and the a"ount. 1/. 'he facility of retainin3 !art of forei3n exchan3e recei!ts in an account desi3nated in forei3n currency has been increased fro" the earlier le%el of 15< to 25<. :oreo%er7 as a s!ecial incenti%e7 1//< -1s and units in PJs ha%e been 3i%en the facility of retention u!to 5/<. 'his facility +ill !rotect ex!orters fro" ha%in3 to incur con%ersion costs +hen they "a$e !ay"ent for i"!orts. 11. 'here are nine x!ort Pro"otion Councils under the ad"inistrati%e control of the :inistry of 'extiles +hich are interfacin3 +ith and ser%icin3 different se3"ents of the textile ex!ort trade leadin3 to 3reater facilitation of our ex!ort efforts. 12. 'he 'extiles x!ort Pro"otion Councils under the ad"inistrati%e control of x!ort Pro"otion -ffices at
this :inistry7 ha%e o!ened four -ne4:an 'extile
By : Garima Minocha
-sa$a (Ea!an)7 :elbourne (*ustralia) Aurban (South *frica) and Sao !aulo (5ra8il) to 3i%e a stron3 thrust to our ex!ort !ro"otion +or$ in these countries.=re3ions. 13. 'he 'extiles Co""ittee7 different 'extile 2esearch *ssociations7 x!ort
Pro"otion Councils and other Industry *ssociations ha%e been conductin3 a lar3e nu"ber of se"inars7 +or$sho!s and distribution infor"ation brochures to create an a+areness a"on3st all se3"ents of industry and trade re3ardin3 the dyes to be used for ex!ort of eco4friendly textiles. 5esides7 eco4testin3 facilities ha%e been co""issioned at i"!ortant !roduction centres.
By : Garima Minocha
TEXTILES CUOTA POLICY

'he "inistry of 'extiles had u! a 'as$ 9orce under the chair"anshi! of the Eoint Secretary ( x!orts) to re%ie+ the current 3ar"ent and textiles (uota !olicies and textiles (uota !olicies and for su33estin3 chan3es7 if felt necessary7 in the" for the for"ulation of the ne+ lon3 ter" !olicies be3innin3 on 1.1.1..&. *fter exa"inin3 the su33estions recei%ed fro" different 'extiles Councils7 x!ort Pro"otion x!orters0 *ssociations and indi%idual ex!orters and holdin3 o!en
house "eetin3s +ith ex!orters interests 3rou!s in :u"bai7 :adras and >e+ Aelhi7 the 'as$ 9orce sub"itted its re!ort on 31.&.1..#.
The Textiles Quota Policy which came into force on 1-1-94, was vali till !1-1"-9#$ The new Textiles Quota Policy %199&-99' has (een announce on )cto(er 14, 199#$ The *ystems of allocation an their levels un er the current Textiles Quota Policy are as follows :
Pe"1enta2e %0 Ann:al LeDel (677E - 77)

Carn 9abrics (other than cate3ory 37 3a= 1) :adeu!s (:illda"=!o+erloo") 55 (15) 15 15 5 1/ 6++F 9abrics (9or cate3ory 37 3a= 1)
a) Past Perfor"ance ntitle"ent (PP ) (of +hich ?i3h Dalue ntitle"ent) b) :anufacturer ntitle"ent (: x!orters0 ) x!orter0s x!orters0 !orters0
55 (15) 15 25 5 4 6++F
55 (15) 15 25 5 4 6++F
c) 2eady Goods ntitle"ent (2G ) d) >on4Kuota ntitle"ent (>K ) e) Po+erloo" ntitle"ent (P T%tal x )
By : Garima Minocha
AN OBERBIE
OF
TO AND ITS EFFECT ON INDIAN
TEXTILE INDUSTRY
International textiles and clothin3 trade is 3oin3 throu3h funda"ental chan3e under the 1/4year transitional !ro3ra""e be3innin3 1 Eanuary 1..5 and set out in the ,'-0s *3ree"ent on textiles and Clothin3 (*'C). 5efore the a3ree"ent too$ effect7 (uotas controlled a lar3e !ortion of trade in the sector. 1nder the a3ree"ent. ,'- "e"bers ha%e co""itted the"sel%es to re"o%e the (uotas and to inte3rate he sector fully into G*'' rules by 1 Eanuary 2//5. 'hat +ould also "ean obser%in3 the G*'' !rinci!les of non4discri"ination. 'extiles re"ains one of the hardest 4 fou3ht issue in the G*'' and ,'-. 9or "any de%elo!in3 countries it +as the !ros!ect of endin3 the (uota syste" that encoura3ed the" to a3ree to ne3otiate the ne+ issues of intellectual !ro!erty7 ser%ices and in%est"ent in the 1ru3uay 2ound. In the run4u! to 1..# Sin3a!ore :inisterial Conference textiles a3ain beca"e a focus of attention for "any "e"bers. Aetailed and len3thy discussions +ere held in the ,'-0s Goods Council about the i"!le"entation of the textiles a3ree"ent and related issues. 'extiles and clothin3 account for about ..1 !er cent of +orld "anufactured 3oods ex!orts or of #.5 !er cent of all "erchandise ex!orts. *ccordin3 to an esti"ate in 1..4 by +hat +as then the G*'' Secretariat7 the re"o%al of (uotas and a reduction in tariffs could and 1) !er cent to the %alue of trade in textiles (excludin3 clothin3) by 2//5. Biberalisation under the ,'- +ould increase the %alue of clothin3 trade by as "uch as #. !er cent. 'his 3ro+th is a "a6or factor behind the esti"ated 1443& !er cent ex!ansion in ex!orts calculated to accrue to de%elo!in3 and transitional econo"y countries as a result of the 1ru3uay 2ound. M:lti0i4"e A""an2e&ent 67E9-79 1! to the end of the 1ru3uay 2ound7 textiles (uotas +ere ne3otiated bilaterally and 3o%erned by the :ultifibre *rran3e"ent (:9*). 'his contained rules for the
By : Garima Minocha
i"!osition of selecti%e (uantitati%e restraints +hen sur3es in i"!orts caused7 or threatened to cause7 "ar$et disru!tion. 'he (uotas incor!orated annual 3ro+th rates7 the standard rate bein3 # !er cent7 althou3h the actual rates %aried considerably. 'he :ultifibre *rran3e"ent +as a "a6or de!arture fro" the basic G*'' rules7 and !articularly +as a "a6or de!arture fro" the basic G*'' rules7 and !articularly the !rinci!le of non4discri"ination. It has no+ been re!laced by he ,'-0s *3ree"ent on 'extiles and Clothin3 and the 1/4year liberalisation !ro3ra""e. *ll (uotas7 +ell as their 3ro+th rates7 existin3 under the :ultifibre *rran3e"ent on 31 Aece"ber 1..4 +ere carried o%er into the ,'- a3ree"ent7 but their le%els +ill auto"atically increase durin3 the 1/4year transition !eriod. T$e TO A2"ee&ent %n Textiles and Cl%t$in2 677G-=++G
'he ,'- textiles a3ree"ent says that the sector +ill be inte3rated into G*'' 1..4 in four ste!s ("ar$in3 the be3innin3 and end of three !eriods). -n 1 Eanuary 1..5 "e"bers +ere re(uired to inte3rate no less than 1# !er cent of the total %olu"e of 1../ i"!ortsL on 1 Eanuary 1..) a further 1& !er cent +ill be inte3rated7 follo+ed by 1) !er cent on 1 Eanuary 2//2 and the re"ainder ("axi"u" 4. !er cent) +hen the *3ree"ent on 'extiles and Clothin3 itself to disa!!ear7 on 1 Eanuary 2//5. ach "e"ber chooses +hat !roducts to inte3rate7 !ro%ided they co%er at least one !roduct of each of the four 3rou!in3s to!s and yarns7 fabrics7 "ade4u!s and clothin3. *s !roducts are inte3rated into G*''7 any (uotas i"!osed on the" +ill be re"o%ed. 'hrou3h the sta3ed inte3ration !rocess7 the textiles and clothin3 !roducts co%ered by the !ro%isions of the *3ree"ent on textiles and Clothin3 +ill !ro3ressi%ely shrin$7 and nu"ber of (uotas +ill di"inish7 until the *3ree"ent on 'extiles and Clothin30s o+n eli"ination on 1 Eanuary 2//5. :9* restrictions in !lace on 31 Aece"ber 1..4 +ill be carried o%er into the a3ree"ent and "aintained until the restrictions are re"o%ed or the !roducts inte3rated into G*''. 9or !roducts under restraint7 the 3ro+th rates "ay be increased accordin3 to the follo+in3 for"ula H
By : Garima Minocha
Aurin3 sta3e 1 of the a3ree"ent and for each :9* restriction in force for 1..4H annual 3ro+th should not be less than 1#< hi3her than the 3ro+th rate established for the !re%ious :9* restriction.
9or sta3e 2 (1..)42//1 inclusi%e)H annual 3ro+th rates should be 2&< hi3her than sta3e 1 rates.
'he tas$ of o%erseein3 the details of the a3ree"ent0s i"!le"entation is 3i%en to the 'extiles :onitorin3 5ody (':5).
* for"ula for a!!ointin3 the 1/ "e"bers four seats for the four "a6or i"!orters (Canada7 Ea!an7 the C and the 1S)7 fi%e seats for the "a6or ex!ortin3 3y!t7 :orocco7 'unisia countries7 includin3 "e"bers of the *ssociation of Southeast *sian nations (*S *>)7 Pa$istan7 India7 ?on3 @on37 @orea7 :acao7 and Batin *"erican and Caribbean countries7 and one for >or+ay7 'ur$ey7 C8ech 2e!ublic7 ?un3ary7 Poland7 2o"ania7 Slo%a$s 2e!ublic7 and S+it8erland. -nce a!!ointed7 ':5 "e"bers are ex!ected to ser%e in their !ersonal ca!acities7 not as re!resentati%es of their countries. TO and India India has done +ell to beco"e a si3natory to the 'extiles and Clothin3 *3ree"ent as "e"ber of the ,'-. In the lon3 run it +ould be in the interests of India to be a !art of the "ainstrea" of the international trade in textiles. India has to stic$ to the trade nor"s7 but has to counter the atte"!ts at dis3uised !rotectionis" that "ay be resorted to by the de%elo!ed i"!ortin3 countries to $ee! tout the so4called flood of chea!er textiles fro" de%elo!in3 countries li$e India. 5ut there +ould be no esca!e fro" the ri3orous standards laid do+n by the de%elo!ed i"!ortin3 countries as in an international re3i"e of free trade7 it is only the ri3ht (uality and !rice that +ould enable us to hold our o+n in the $eenly co"!etiti%e 3lobal "ar$et.
By : Garima Minocha
,e ha%e to ta$e a !ositi%e a!!roach to+ards liberalisation and try to a%ail of the o!!ortunities offered by it7 o%erco"in3 the challen3es !osed by it. 'he o!!ortunities a%ailable in the international trade in textiles are a"!le and unli"ited7 and our ai" should be to secure a res!ectable share thereof in then co"in3 years. S"all countries and ne+ entrants into the field li$e South @orea7 'hailand the Indonesia clai"ed res!ectable share 3lobal trade in textile. 'he reason +hy India too can li$e+ise by ado!tin3 suitable strate3ies can 3ain a res!ectable share in the 3lobal trade in textiles ha%e turned a real ad%anta3e throu3h liberalisation7 but use has to be "ade out of it to boost the ex!orts of our textiles.
By : Garima Minocha
S OT ANALYSIS OF INDIAN TEXTILE INDUSTRY

'he textile Industry durin3 the last 5/ years has seen se%eral u!s and do+n due to so"e 3o%ern"ental Policies7 and so"e others due to its o+n acts of o"issions . 5y and lar3e its fortunes ha%e been han3in3 on a delicate balance. 'he leadershi! in the Industry has to e(ually share the res!onsibility for allo+in3 Industry to 3et into such a "ess. 'he i3norance of the 'echnolo3ical 9li3ht ta$in3 !lace in the Industrialised +orld and lac$ of $no+led3e and ex!erience of the actual +orryin3 of the 'extile :ills in the interest of the country are so"e of the handica!s fro" +hich the leadershi! has been sufferin3. ,ith the result no "eanin3ful dialo3ue could be held +ith the Go%ern"ent to 3ain its confidence and su!!ort for healthy de%elo!"ent of the 'extile Industry. If the Industry had ta$en a!!ro!riate ste!s to "odernise and is!ro%e !roducti%ity and duality7 it could ha%e e"er3ed as a %ibrant Industry lon3 bac$ as has been case of 1@.7 9rance7 1S* and Ea!an. 'oo :any controls by the Go%ern"ent has resulted in an absolute ri3idity in the +or$in3 of the 'extile Industry and o!!ortunities $noc$in3 at the doors of the Industry could not be a%ailed of H * co"!lete S,-' *nalysis of the Indian Cotton 'extile Industry is done +hich is as follo+sH STRENGT!S 'raditional ex!orters of textiles. Self Sufficient in !roduction of cotton and a%ailability of sil$. Bo+ Babour Cost. Sound technical and "ana3erial base. Biberal Go%t. Policy is attractin3 9orei3n Airect In%est"ents and Eoint %entures
By : Garima Minocha
Ae"ocracy and Sound Be3al syste" *t !resent liberal !ollution control nor"s xtra Babour could al+ays be e"!loyed to 3et the extra 6ob done. Industry is !ro3ressin3 to+ards reno%ation and "odernisation. 'his decade has +itnessed the s+ift ad%ance"ent of technolo3y in the different s!heres of the 'extile Industry.
India has in4built ca!abilities to beco"e $ey *sia Su!!lier in cotton textiles. Industry has the stren3th of 3ro+in3 ex!orts and !rotected do"estic "ar$et. 'he a%ailability of %arious ty!es of cotton fibres by the Indian 'extile Industry is a boon +hich should be utilised effecti%ely to curb forei3n exchan3e out4 3oin3s on 2a+ :aterial 9ronts.
EA?NESSES Dery old units7 "achines are fit for "useu"s Bo+ !roducti%ity of labour Poor +or$ culture affectin3 !roduct (uality Poor infrastructural facilities for trade Industry0s reluctance to in%est for "odernisation and needed instru"entation for !recision Infrastrctural i"!ro%e"ents re(uire hu3e in%est"ent. ?i3h cost of ca!ital ser%icin3.
By : Garima Minocha
Industry0s adhoc i"!le"entation for trainin3 in!ut and ?2A Industry is seen as a lo+ %alue su!!lier ha%in3 of !roble"s such as hi3h incidence of sic$ness7 increasin3 obsolescence and lo+ le%el of "odernisation.
-ne of the "a6or +ea$ness of so"e of ne+ "ills in India is that o!erati%e !roducti%ity is lo+er than in the Industrially ad%anced countries in the +est or e%en countries in the far ast.
OPPORTUNITIES Increasin3 +orld "ar$et due to shiftin3 of !roduction facilities fro" de%elo!ed countries. Increasin3 +orld !o!ulation as +ell as fashion trends. Increasin3ly "iddle c"s +illin3 to !ay for (uality 3oods. >e+ industrial and hi3h tech textile a!!lications. In *sia7 in Industrial textiles +e are in front !osition and can satisfy re3ional "ar$et by 6oint collaborations. Contract 2 F A for our 2 F A institutions fro" de%elo!ed countries is beco"in3 reality due to lo+er cost. Countries li$e Ea!an77 @orea7 ?on3 @on3 and 'ai+an are no+ shiftin3 to hi3h tech areas and are transferrin3 their %enues to lo+ labour cost countries li$e India7 China 5an3ladesh7 Dietna"7 Srilan$a etc. It clearly !oints that sco!e for ex!ansion is enor"ous and achie%in3 1S; 25 billion by end of 2//4 is not at all an i"!ossible tas$. ,hat is needed is a concentrated effort by the Go%ern"ent and the Industry.
By : Garima Minocha
'he cost of labour in the co"!etin3 countries is beco"in3 unaffordable to "anufacturers due to hi3h cost of li%in3 and risin3 standard of li%in3 and chan3in3 life.
2ecent I'C research in Cotton Carn7 3rey cloth and cotton household textiles has confir"ed not only the existence of a lar3e "ar$et but also that if the !roduct is ri3ht if strin3ent technical s!ecifications and (uality re(uire"ents are adhered to if contractual re(uire"ents are "et7 and if "ar$et re(uire"ents are carefully considered7 the "ar$et can be crusher ex!loited.
T!REATS Darious trade blocs for"ed e.3. C7 >*9'*7 *P C7 GCC. >on4tariff barriers li$e social e(uality of labour etc. ?i3h in!ut costs. 9re(uent Policy chan3es. ?i3her rate of interest. Co"!ared to other cotton 3ro+in3 countries the !er hectare yield in India is %ery !oor. 'he latest a%ailable date indicates that our !er hectare yield of cotton is 2&) $3 co"!ared to 55/ $3 in Pa$istan.7 &2) $3s in 1S*7 ##/ $3s in China o%er 1/// $3s in 3y!t and 1)3/ in Iseral. Bo+er yield in India is attributed to &/< of cro! bein3 rained and sub6ect to %a3aries of natures. 5y international Standards7 the si8es of textile "ills are too s"all. 'hese are not con3enial for reali8in3 econo"ics of scale. -ther co"!etin3 countries ha%e been able to ta$e ad%anta3e of lar3e scale o!erations.
By : Garima Minocha
-n the ex!ort front7 the li"itations and constraints of textiles and ready "ade 3ar"ents co"!rise concentration of cotton based !roducts7 narro+ !roduct ran3e and li"ited "ar$et ran3e.
5esides7 in ter"s of (uality the India !roducts cater "ainly to the lo+er end and to a s"all extent "ediu" ran3e of the "ar$et7 1!!er "ediu" and hi3h (uality se3"ents of the +orld "ar$et re"ain unta!!ed.
x!ort strate3ies and !ro"otional efforts of the Indian Industry are not co"!atible +ith those of co"!etitors.
:ar$etin3 strate3ies in the for" of buy4bac$ arran3e"ents ha%e hardly been ado!ted by the Indian ex!orters.
By : Garima Minocha
INDIA,S POTENTIAL AND CAPABILITY TO EXPORT COTTON YARNS

Cotton yarn !roduction in India has been increasin3 at the rate of 2.5< at a year o%er the last t+o decades7 +ith a hi3her rate of increase of about 3< durin3 the !ast 1/ years. In 1..44.5 cotton yarn !roduction a"ounted to about 1#// "illion $3. 'he a%era3e count s!un has also been increasin3 at the rate of 1< a year fro" about 25 in 1.#1 to about 34 in 1..5. *ssu"in3 the sa"e rate of increase as in the !ast decade7 the !ro6ected cotton yarn !roduction in 2/// *A is about 1.// "illion $3. 'he o%erall yarn !roduction includin3 fila"ent yarn could be ex!ected to increase by about 3/< fro" 24)/ "illion $3. in 1..44.5 to 335/ "illion $3. in 1...42//. Cotton +ill continue to be the do"inant co"!onent7 +ith a share of about &/< a"on3 s!un yarns and 5&< for all yarns in 2///*A. C%tt%n Ya"n Ex#%"ts x!ort of cotton yarn ha%e traditionally been re3ulated +ithin a (uantitati%e ceilin3 fixed on a year to year basis by G-I7 +ith a %ie+ to chec$in3 the !rice rise and ensurin3 that ade(uate su!!lies are a%ailable for the +ea%ers of the decentralised handloo" and !o+erloo" sectors. Conse(uently7 yarn ex!orts ha%e been fluctuation +idely fro" year to yearL fro" a hi3h %olu"e of about 4/ "illion $3 in 1.#.4&/7 ex!orts steadily declined a%era3in3 6ust about 23 "illion $3 in the firsts half of )/s. Since 1.)5 there has been a steady and a!!reciable increase in the %olu"e of yarn ex!orts exce!t for a fall in 1.))4).. In the ./s yarn ex!orts sho+ed a steady and stee! increase. Aurin3 1..5 yarn ex!orts touched an all4ti"e !ea$ of 24/ "illion $37 +hich re!resented about 15< of the cotton yarn !roduction . In 1..# the yarn ex!orts sho%ed a stee! increase to 2)& "illion $3 for the nine "onths Eanuary 4 Se!te"ber7 accountin3 for about one4sixth of the total cotton yarn !roduction.
By : Garima Minocha
'he unit %alue !er $3 !rice realisation also sho+ed a (uantu" 6u"! of 2.2 ti"es o%er the 5 years 1../4.5. Bar3er sales of finer counts of yarn and de!reciation of ru!ee lar3ely account for this increase. ?o+e%er7 !rice realised in 1..# has co"e do+n a!!reciably. In s!ite of this fall in ex!ort !rice "ills +ith a lar3e share of ex!orts ha%e i"!ro%ed their !rofitability o%er the last year0s le%els7 +hereas "ills "ostly caterin3 to do"estic "ar$et are unable to "aintain their botto" line. India0s share of cotton yarn ex!orts is still %ery s"all at about one4ei3hth of the total international "ar$et. Global trade for yarn has doubled durin3 the 1/ years endin3 1..1. :ore and "ore countries are resortin3 to i"!orts of cotton yarns a3ainst indi3enous !roduction . 'he 3lobal de"and for yarn is currently o%er 2/// "illion $3 by 2///*A. :any i"!ortin3 countries +ill 3i%e !reference to !urchase cotton yarns fro" countries li$e India +ith a %ast ra+ "aterial base. 'hus as the second lar3est !roducer of cotton yarn and fourth lar3est !roducer of cotton in the +orld7 India +ill ha%e a lar3er share of yarn. %en a "odest share of 2/< of the +orld yarn "ar$et +ould "ean an ex!ort !otential of #// "illion $3 by 2/// *A. 'his re!resents about #/< increase fro" the !re%ailin3 le%els and a rate of increase of about 12.5< o%er the next four years. 'he nu"ber of has 2-1 "ills as +ell as additional s!innin3 ca!acity bein3 created in the country +ill be able to "eet the re(uire"ents both (uantitati%ely and (ualitati%ely. ?o+e%er7 three i"!ort issues arise and ha%e to be addressed before conte"!latin3 +hether ex!ort of such hu3e %olu"e of yarn is feasible. 9irst7 +hether ex!ortin3 such lar3e (uantities of yarns +ill affect the internal de"and and "ar$et !rice of yarn. Second +hether ade(uate cotton +ill be a%ailable to "eet the increased re(uire"ents and the third +hether our "ills can co"!lete successfully in the international "ar$et +ith so"e of he leadin3 yarn ex!ortin3 countries li$e Pa$istan7 China7 'ai+an7 3y!t7 'ur$ey7 5ra8il7 etc. Inte"nal De&and
By : Garima Minocha
,ith the o%erall yarn !roduction !ro6ected at 335/ "illion $3 in 2///*A7 ex!ort of the order of #// "illion $3 +ill still account only for a little o%er one4sixth of the total yarn !roduction and about 3/< of the cotton yarn !roduction. 'he increase in s!un yarn !roduction is ex!ected lar3ely fro" increase in s!indlea3e and "odernisation and !artly by utilisin3 the lar3e idle rin3 fra"e ca!acity of 15<. 'hus e%en after allo+in3 for hi3her yarn ex!orts of #// "illion in 2/// *A7 the yarn a%ailability to "eet internal de"and4includin3 increase in yarn re(uire"ent of hi3her 3ar"ent and textile ex!orts4+ill be hi3her at 2&5/ "illion $3 in 2/// *A as a3ainst 224/ "illion $3 in 1..5. 'his re!resents a 23< increase of do"estic yarn. * recent study conducted by SI'2* has sho+n that the (uality of yarns s!un by so"e of the -1 s!innin3 "ills is rated at G1ster 1/ !ercentile le%el0 that is7 they co"!are +ell +ith the ,orld0s 1/ !er cent best yarns. *s yarn (uality is deter"ined to the extent )/< by cotton (uality7 it is essential that ade(uate cotton of re(uisite (uality are a%ailable for "ills ex!ortin3 yarns.
By : Garima Minocha
C%tt%n Seas%n Endin2 86st A:2:st
I&#%"t
Ex#%"t
A"ea :nde" C%tt%n P"%d:1ti%n and Yield #e" $e1ta"e 'otal area under Cotton Culti%ation in :illion hectares )./2 &..) &.)4 4 4 4 4 &.) &.#) &.5& &.55 &.35 #.). &.)& ).12 ).13 &.)2 )./# &.)& &.&2 &.3) &.53 #..5 ..4# &.34 &.& &.44 &.& &.54 &.34 &.5 Cotton !roduction (In la$h 5ales of 1&/ $3s. each) 4..24 4).5 52.## 4 4 4 4 #..5 5&.35 #3./. &1.5# 5..5 5).3. &2.43 &..5) &#.4) &/.1 &).)4 &5.34 #3.)& )5./# )&.2& #../5 #3.)2 )&.44 114.22 .&.5. .).5# 115.)3 1/&.1/ 13).5/ Cotton yield !er hectare ($3s) 1/5 1/4 114 4 4 4 4 451 12& 142 1#1 13) 144 15& 1#& 1#/ 152 1## 1#3 141 1.# 1.& 1#. 1#) 2/2 252 223 21& 2#1 24) 2&/
Kuantity (Ba$h 5ales of 1&/ @3s) 1.5#45& 1.#14#2 1.##4#& 1.#&4#) 1.#)4#. 1.#.4&/ 1.&/4&1 1.&14&2 1.&24&3 1.&34&4 1.&44&5 1.&54&# 1.&#4&& 1.&&4&) 1.&)4&. 1.&.4)/ 1.)/4)1 1.)14)2 1.)24)3 1.)34)4 1.)44)5 1.)54)# 1.)#4)& 1.)&4)) 1.))4). 1.).4./ 1../4.1 1..14.2 1..24.3 1..34.4 1..44.5 #.3& ).5# ).2) ).24 4.54 ..#4 ..1/ &../ 4.#) 1.)) 1.15 1.## 5.&) #.#1 /.2& 4 4 /.5/ 4 4 /.&5 4 4 3.// 2.32 4 4 3.// 1.15 3.// 5.).
Kuantity (Ba$h 5ales of 1&/ @3s) 3.12 3.4) 2.5. 2.44 2./1 2.1. 2.// 2.4& 1.)4 3.## /..& 4.2& /.3. /.1/ 1.&& 5.52 #..) 3.&) #.)1 3.54 1.&. 4.5/ 13.)2 /.43 /..# 13.&1 11../ /.&& 13.&& 3../ 1./)
By : Garima Minocha
C%tt%n aDaila4ilit/ Cotton consu"!tion durin3 1..44.5 stood at 115 la$h bales (1&/$3 each). 9or the !ro6ected increase of cotton yarn !roduction fro" 1#// to 1.// "illion $37 the cotton re(uire"ents by "ills7 assu"in3 a !ro!ortionate bias7 is esti"ated to be about 13) la$h bales in 2///*A. Cotton !roduction durin3 1..44.5 a"ounted to 14# la$h bales and a record of 15# bales +as reached in 1..54.#. *lthou3h the !lannin3 co""ission has set u! a lo+er tar3et of 14/ la$h bales in 1..#4.&7 as !re trade esti"ates under %ery fa%orable tradin3 conditions 1#5 la$h bales can be !roduced. In fact o%er the fi%e year !eriod 1../4.57 cotton !roduction has sho+n a handso"e increase of o%er 5/<. 'he increase is lar3ely due to the %arious "easure initiated by Go%ern"ent of India7 IC:97 SI:* and other a3encies on the one hand and hi3h !rice -1 "ills ex!ortin3 counts 41s and abo%e can realisation of cotton on the other. 5esides in the e%ent of non4a%ailability of cotton of re(uisite (uality 1//< i"!ort cotton under the ad%ance licensin3 sche"e. 'hus e%en allo+in3 for cotton ex!orts 4 +hich is 3enerally of the order of 1/< 4 there +ill be ade(uate cotton to "eet the !ro6ected consu"!tion of 13& la$h bales in 2/// *A. C%&#etin2 in Inte"nati%nal &a";et '+o !ri"ary factors for Indian yarns to co"!ete in the international "ar$ets are (uality and cost. C:alit/ *s far as yarn (uality is concerned s!innin3 "ills in India ha%e the necessary technical $no+ho+ and ex!ertise and so!histicated "achinery to !roduce hi3h (uality yarns. 1nder the s!onsorshi! of :inistry of textile a 6oint !ro6ect G?i3h Kuality Carns for x!orts0 +as underta$en by four '2*0s *'I2* 7 5'2I7 SI'2* and >I'2* and the findin3s fro" this study ha%e been disse"inated to all "ills.
By : Garima Minocha
*l"ost all the "ills in the country are "e"bers of one or "ore of the four co4 o!erati%e textile research associations and they are a%ailin3 the constancy ser%ices fro" these laboratories. In fact7 SI'2* has o%er 5// "e"bers and o%er )/< a%ail one or "ore of the ser%ices !ro%ided by SI'2* e%ery year. It can be seen fro" the fi3ures that cost of !o+er is the lar3est co"!onent of con%ersion cost in "odern "ills accountin3 for about 3/< of the total. *s s!indle utilisation is a $ey !ara"eter in the !roduction econo"ics of a s!innin3 "ill4 SI'2* nor" s!ecifies .)< and round the cloc$ 24 hours a day se%en day a +ee$ +or$in3 al"ost all "ills ha%e been e(ui!!ed +ith 3enerators to acti%ate s!indles durin3 !eriods of !o+er cut +hich are %ery fre(uent. 'he !o+er cost in India has been increasin3 at fast !ace of about 12<7 that is doublin3 e%ery # years as a3ainst & to )< for other ite"s of cost and 1/< for +a3es. 'hou3h the !re%ailin3 cost of !o+er is not hi3h +hen co"!ared +ith other yarn ex!ortin3 countries7 there is ne%ertheless a need to ensure that ade(uate !ore is "ade a%ailable !articularly to those "ills ex!ortin3 yarn7 and !o+er costs to do not increase abnor"ally in the years to co"e. Salaries and +a3es cost contribute for about 25 to 3/< of the con%ersion cost. In ter" of total yarn cost salaries and +a3e co"!onent fro" 1/ to 12<. *s the hourly +a3es rates in de%elo!ed countries are se%eral ti"e "ore e.3.7 3/ to 4/ ti"es in uro!e and 1S* 4 India +ill continue to ha%e a bi3 ed3e o%er the" in cost of !roduction. ?o+e%er7 co"!ared +ith so"e of the chief yarn ex!ortin3 countries li$e China and Pa$istan +a3es in India are hi3h by 3/ to #/<. 'his "a$es it i"!erati%e for our "ills to "aintain a %ery hi3h labour !roducti%ity for the" to be co"!etiti%e. 'he !roducti%ity sur%eys by SI'2* ha%e sho+n that a nu"ber -1 "ills infect achie%e a %ery hi3h labour !roducti%ity and contain the +a3es bill at 5< or less of the o%erall yarn cost. It is si3nificant to !oint out in this context that Indian carded yarns ha%e recently reca!tured the Ea!anese "ar$et endin3 the Pa$istan "ono!oly . 5oth in ter"s of (uality and !rice Indian yarns are !referred o%er Pa$istan7 and Indonesia and ha%e thus !ro%ed to be co"!etiti%e.
By : Garima Minocha
*"on3 the other costs7 the co"!onent under GInterest0 is (uite si8able and has increased a!!reciably in recent years to o%er 5< of the yarn cost. 'he cost of ca!ital in India +or$s out to about 24< of the co%ersion cost in "odern "ills7 +hich is %ery hi3h as co"!ared +ith the "ills in other countries. 'here is thus a stron3 case for "ills to see$ so"e concession on interest burden. 'hus7 o%erall India has a %ast !otential for yarn ex!ort and has the necessary infrastructure7 to ste! u! the cotton yarn ex!ort to #// "illion $3 %alued at 2s. ./// crores by the turn of the century. 'he increased need for cotton42.5 "illion bales 4 can be lar3ely "et by i"!ro%in3 the yield in the country and there are already encoura3in3 si3ns fro" "any. C%st %0 #"%d:1ti%n *s far as econo"ic cost of !roduction of yarn is concerned cotton occu!ies a central !osition as it accounts for about #/< of the cost ane3in3 fro" 5/< in fine counts li$e )/s to &/< in coarse counts li$e 2/s. ,ith s!innin3 "ills earnin3 an a%era3e net !rofit "ar3in7 that is after !ro%idin3 for de!reciation and interest of only 3< of sales7 cotton cost relati%e to yarn sellin3 !rice !lays a crucial role in deter"inin3 a "ill0s !rofitability. * recent study of SI'2* in )4 selected s!innin3 "ills has re%ealed that durin3 the fi%e year !eriod 1../4.57 the net !rofit a"ounted only to 2< of the sales re%enue. :ills e(ui!!ed +ith "odern "achinery7 hi3h !roducti%ity7 !roducin3 hi3h %alue !roducts and ex!ortin3 in si3nificant %olu"es are found to ha%e recorded a net !rofit of o%er 1/< of the sales. In "ills +ith fairly "odern "achinery but lar3ely caterin3 to do"estic "ar$ets7 the net !rofit is found to be 5< of the sales. Profit before tax differed +idely bet+een years7 fro" hi3h !rofits in 1../4.1 (#.&<)7 abo%e a%era3e !rofits in 1..34.4 (4.3<)7 belo+ a%era3e !rofits in 1..14.2 (/.3<)7 as +ell as in 1..44.5 (/.)<)7 and a shar! fall in !rofits in 1..24.3 (loss of 1.2<). :ills re3isterin3 different le%els of !rofits exce!t those that incurred losses4exhibited "ore or less the sa"e !attern of inter4year "ills %ariation. 5otto" "ills7 ho+e%er7 incurred "ore losses durin3 ad%erse years.
By : Garima Minocha
Cotton costs relati%e to yarn sellin3 !rice 3enerally ruled at a hi3h le%el durin3 the last fi%e years7 +hich lar3ely ex!lain the co"!arati%ely lo+ net !rofit of 2< re3istered by the "ills. 'hus it is %ery essential that "ills should ac(uire cotton at co"!etiti%e costs. *s far a conser%ation cost of cotton to yarn7 a brea$ u! of costs in "odern -1 "ills and abo%e a%era3e "ills are !resented in this 'able.
C%nDe"si%n C%st as F %0 T%tal (9+s) Co"!onent of Cost Po+er Salaries and ,a3es Stores -%erheads Interest Ae!reciation 'otal :odern :ills 2. 24 . 14 13 11 1// *bo%e *%era3e :ills 2& 31 . 14 1/ . 1//
By : Garima Minocha
T!E EUROPEAN UNION IN BRIEF

Int"%d:1ti%n 'he uro!ean 1nion ( 1) is the deno"ination of +hat used to be called the 1 had t+el%e "e"ber statesH Bel2i:&@ T$e
uro!ean Co""unity. 'he ori3inal
Den&a";@ F"an1e@ Ge"&an/@ G"ee1e@ I"eland@ Ital/@ L:xe&4%:"2@ Net$e"lands@ P%"t:2al@ S#ain and t$e United ?in2d%&'
-n the 1st of >o%e"ber 1..3 the establish"ent of a sin3le "ar$et consistin3 of 34& "illion !eo!le ca"e into bein3. *s a co"!arison7 the 1S "ar$et counts 25/ "illion !eo!le and the Ea!anese "ar$et around 125 "illion. 'he "ost i"!ortant as!ect of the !rocess of unification of the for"er4 C countries +hich affects trade is the har"oni8ation of rules in the 1 countries. *s the unification allo+s free "o%e"ent of ca!ital7 3oods7 ser%ices and !eo!le7 the internal borders are re"o%ed. Goods !roduced or i"!orted in one "e"ber state can be "o%ed around bet+een the other "e"bers states +ithout restrictions. * !reconditions concernin3 locally !roduced or i"!orted !roducts. *lthou3h the uro!ean 1nion is already a fact7 not all the re3ulations are har"oni8ed but +or$ is in !ro3ress. *t !resent the 1 is settin3 u! unifor" re3ulations in the fields of en%iron"ental !ollution7 health 7 safety (uality and education. 'he ex!ected econo"ic conse(uences of the Sin3le :ar$et are such that the 1
+ill ex!erience increased econo"ic 3ro+th. 'his econo"ic 3ro+th +ill co"es as a result of reduced trans!ortation and distribution costs7 econo"ies of scale7 increased co"!etition and !roducti%ity and relocation of !roduction to increased co"!etition and !roducti%ity and relocation of !roduction to increase the utili8ation of co"!arati%e ad%anta3es. Consu"er !rices are also ex!ected to fall. 'hese econo"ic de%elo!"ents +ill7 in turn7 increase the !urchasin3 !o+er and standard of li%in3 of the by the consu"er. uro!ean !o!ulation and7 hence7 lead to "ore de"and
By : Garima Minocha
*ttracted by these !ros!ects7 other "e"bers of the
uro!ean countries ha%e a!!lied for
"e"bershi!. *s !er 1 Eanuary 1..57 S+eden. 9inland and *ustria7 for"er uro!ean 9ree 'rade *ssociation ( 9'*)7 +ere +elco"ed as 1 is to ne+ "e"bers. 'he "ain "oti%ation of these countries to 6oin the uro!ean cono"ic *rea7 an a3ree"ent bet+een the
!artici!ate in the decision "a$in3 !rocess. 'hrou3h the establish"ent of the 1 and 9'* earlier this decade7 S+eden7 9inland and *ustria already en6oyed "any of the ad%anta3es of free trade +ith the 1 "e"bers7 Includin3 the three ne+ "e"bers7 the "ar$et si8e of the 1 is around 3&/ "illion consu"ers7 co"!arable to the >orth *"erican 9ree 'rade *ssociation (>*9'*) +hich counts 3#5 "illion consu"ers. * nu"ber of ast uro!ean Countries are also ea3er to 6oin the 1. ?o+e%er7 it +ill ta$e a +hile before the econo"ies of these for"er socialist states are u! to the le%el that enables inte3ration. In the "ean ti"e7 the 1 has established associations +ith these countries to !ro%ide econo"ic assistance and to ensure !olitical stability. *t the "o"ent there are trade and coo!eration a3ree"ents in force bet+een the 1 and the C8ech 2e!ublic7 the 9ederal 2e!ublic of Slo%a$ia Poland7 ?un3ary7 2o"ania and 5ul3aria. Ge%2"a#$/ 'he 1 stretches fro" the :editerranean in the south7 u! to the 5altic Sea in the north. 'he ori3inal t+el%e structure. In 3eneral7 the 1 countries differ considerably in their 3eo3ra!hic 1 is fairly flat and hilly7 +ith so"e exce!tions. 'he
"ain "ountainous areas areH the Pyrenees "ountain chain bet+een S!ain and 9rance7 the *l!s bet+een 9rance and S+it8erland and the Aolo"ites in the north of Italy. 'he do"inatin3 land use is a3riculture7 co%erin3 al"ost #/ !ercent of the total 1 surface. 9orests co%er another 22 !ercent of the 1 area7 +hereas buildin3s and infrastructure co%er nearly . !ercent of the total surface. P%#:lati%n
By : Garima Minocha
'he densely !o!ulated areas in the north+est of Ger"any7 the south+est of
1 are located in the >etherlands7 the n3land and in northern Italy. 5esides7
!o!ulation concentrations can be found around the ca!ital cities. 'he >etherlands7 +ith 3&1 (in 1..2) !eo!le !er $" 2 is the "ost densely !o!ulated area in the 1. 'he 1 a%era3e is 1)4 !eo!le !er $" 2 in 1..2. *s a co"!arison7 the !o!ulation density in the 1S* is 2# and in Ea!an 324 !eo!le !er $" 2. In ter"s of !o!ulation si8e (and "ar$et si8e)7 bi3 differences exist +ithin the 1. Ger"any (after unification) has by far the bi33est !o!ulation si8e7 +ith around )/ "illion !eo!le. 'he 1nited @in3do"7 Italy7 and 9rance ha%e !o!ulations at around 5& "illion inhabitants each. E1%n%&/ 'he fi%e bi33est for the 1 countries (Ger"any7 9rance7 1nited @in3do"7 Italy and 1. 'otal GAP
S!ain) to3ether contribute around )& !ercent of the GAP of the
1 stands at 1S; #7234 billion in 1..37 +hich is sli3htly lo+er than the
GAP of the 1S* (1S; #7245 billion) and considerably hi3her than the GAP of Ea!an (1S; 471.) billion). ?o+e%er7 the a%era3e GAP !er ca!ita in the 1 is "uch lo+er than that of Ea!an or the 1S7 but considerin3 the internal di%ersity in the 'he a%era3e GAP !er ca!ita for the exceeds the 1& !ercent hi3her than the the 1. 'he !er ca!ita fi3ure for Ger"any has been lo+ered due to the unification +ith for"er ast Ger"any. Cet7 Ger"any has the hi3hest fi3ure at "ore than 1S; 1&7/// !er ca!ita. 'he >etherlands7 9rance7 Italy and 5el3iu" are classified in the sa"e 3rou! +ith a GAP !er ca!ita bet+een 1S; 217/// and 1S; 237///. 17 this is not sur!risin3. 1 is 1S; 1.7&.3. 'he Ea!anese fi3ure
1 fi3ure by al"ost 5/ !ercent. 'he GAP !er ca!ita of the 1S is 1 a%era3e. 'he fi3ures for Ea!an and the 1S* are
co"!arable to those of Aen"ar$ and Buxe"bour37 the "ost affluent countries in
By : Garima Minocha
'his 3rou! is follo+ed by the 1nited @in3do" +ith a GAP !er ca!ita of about 1S; 1)7///. S!ain and lreland ha%e !er ca!ita fi3ures bet+een 1S; 137/// and 1S; 157///7 +hile Greece and Portu3al close the ran$s +ith !er ca!ita fi3ures around 1S; )7///. Bin$in3 the GAPs of the "ar$ets. 'he household consu"!tion %aries bet+een 1 countries7 in absolute ter"s and in ter"s of the co"!osition of the household bud3et. In so"e countries7 health and "edical ser%ices are !ri%ate7 absorbin3 a hi3her !ercenta3e of the household inco"e. 2e3ional differences and custo"s ha%e also their influence on the ex!enditure !attern in the southern 1 countries. 9or instance7 households in the 1 countries s!end relati%ely "ore on food7 drin$s and tobacco. 1 countries to !o!ulation si8e7 Ger"any and 9rance7 follo+ed by Italy and the 1nited @in3do"7 are the "ost attracti%e ex!ort
:oreo%er7 trans!ortation7 co""unications and leisure are sectors +hich are ex!eriencin3 a 3ro+in3 de"and. 'he 1 countries ha%e their o+n currencies7 +hich are related to each other uro!ean xchan3e 2ate :echanis" ( in short 2:). 'he C1
throu3h the
( uro!ean Currency 1nit) is built u! of the t+el%e se!arate currencies. It is a "onetary instru"ent used by financial institutions. e(ui%alent %alue in ach currency has an C1 accordin3 to the %alue of the !articular currency. In
Se!te"ber 1..47 the exchan3e rate of the C1 +as as follo+sH C1 1 4 1S; 1.21 or Afl. 2.14. In0"ast":1t:"e 'he 1 is endo+ed +ith a %ast and extended trans!ortation net+or$. 'he 1 is
easily accessible by sea7 than$s to the lon3 coastline alon3 the *tlantic7 >orth Sea and :editerranean +aters7 +hereas the trans!ortation net+or$ by air7 rail and road connections is abundant and of a hi3h (uality.
By : Garima Minocha
'he coastlines ha%e nu"erous sea!orts7 +here the inco"in3 trade can be transferred to other "eans of trans!ortation. *"on3 the" is the bi33est !ort in the +orld7 the !ort of 2otterda" in the >etherlands. 'he !ort of 2otterda" functions as a crucial trans!ortation node in S+it8erland and the east uro!e throu3h +hich "illions of tonnes of inco"in3 !roducts are distributed to Ger"any7 9rance7 5el3iu"7 uro!ean countries throu3h the 2hine ri%er and its lbe. 'his is a $ey ad%anta3e for the nu"erous connectin3 channels. 2i%er trans!ortation also !lays a "a6or role on the ri%ers Seine7 the :easure and the northern 1 countries7 co"!ared to the :editerranean countries. 'he rail+ay net+or$ in the :iddle 1 stretches throu3hout uro!e and extends to the
ast throu3h 'ur$ey. ?o+e%er7 the rail+ay net+or$ in the Iberian 1. In S!ain and Portu3al7 rail+ay trac$s
Peninsula differs fro" the rest of the to and fro" the rest of the 1.
+ith a different +ith are still used7 li"itin3 the effecti%eness of rail trans!ortation
:ost :editerranean countries ha%e in%ested lar3e su"s of "oney in tier trans!ortation net+or$s since they entered the 1. 'his a!!lies "ainly to S!ain7 Greece and Portu3al7 since Italy has been a "e"ber of the 1 for a "uch lon3er !eriod of ti"e. 'hese in%est"ents are !artly financed by the the last fi%e to six years. -%erall7 the northern !art of the that +ill connect the "a6or 1 has better trans!ortation infrastructure by 1. 'he rail and road trans!ortation net+or$s in !articular7 ha%e recei%ed "uch attention durin3
road7 sea and rail. 'he 9rench ha%e established their 'GD (a hi3h s!eed train) 1 cities durin3 the next ten years. In addition7 the recently o!ened Channel tunnel connects 1nited @in3do" and the "ainland.
By : Garima Minocha
T!E EUROPEAN UNION - TEXTILE INDUSTRY (A PROFILE)

'he textile industry co%ers the !re!aration7 s!innin37 +ea%in3 and $nittin3 of natural and "an4"ade fibres7 textile finishin37 the !roduction of "ade4u! textiles (such as bed and $itchen linen)7 of car!ets and of so"e $nit+ear !roducts. It accounted for 3.2< of the %alue added 3enerated by the 1 "anufacturin3 industry in 1..47 +ith an e"!loy"ent of about 1.3 "illion !eo!le. In recent years !roduction and e"!loy"ent in the textile industry ha%e 1
de%elo!ed less fa%orably than in the "anufacturin3 sector as a +hole. 'he "ain reasons for this ha%e been the slu33ish de%elo!"ent of consu"!tion in the and the further 3ro+th of i"!orts of textile and clothin3 !roducts fro" lo+4cost de%elo!in3 countries. Production in current !rices7 +hich had been fallin3 fro" 1../ to 1..37 reco%ered a3ain by #< in 1..4. 'his +as due to risin3 a!!arent consu"!tion of textiles7 +hile extra4 1 i"!orts and ex!orts +ere steadily 3ro+in3 o%er recent years. In constant !rices7 ho+e%er7 a!!arent consu"!tion sta3nated o%er the last nine years7 +hile !roduction dro!!ed by an a%era3e /.)< !er year. "!loy"ent +as reduced year after year7 but the loss of e"!loy"ent in 1..47 a"ountin3 to 5/7/// 6obs7 has only been about half that of the annual losses in !recedin3 years. 'he industry0s lar3est "ar$et is the 17 but ex!orts are beco"in3 "ore and astern
""ore i"!ortant7 in !articular to other de%elo!ed countries such as the 1S*7 S+it8erland and Ea!an. * 3ro+in3 !ro!ortion of textiles is ex!orted to re4i"!ort into the uro!e and the :editerranean ri"7 for subse(uent !rocessin3 into clothin3 for 1 ($no+n as out+ard !rocessin3 trade). :ost i"!orts of t extile !roducts co"e fro" a li"ited nu"ber of bi3 su!!lier countries7 +ith a risin3 share co"in3 fro" China7 'ur$ey7 India7 Indonesia and Pa$istan. In the last 5 years7 the ten lar3est su!!lier countries accounted for al"ost #/< of 1 textile lar3est su!!lier countries accounted for al"ost #/< of 1 textile i"!orts.
By : Garima Minocha
*s a su!!lier to the clothin3 industry7 the textile industry has had to ad6ust to !roduction and "ar$etin3 strate3ies such as (uic$4res!onse and 6ust 4 in 4 ti"e7 as these are increasin3ly ado!ted by clothin3 !roducers and distributors. 'he increasin3 use of out+ard !rocessin3 and international sourcin3 strate3ies also re!resents a "a6or challen3e for textile !roducers7 +ho are interested in "aintainin3 the use of outside the 1. ,ith 1 econo"y e"er3in3 fro" recession7 !ros!ects for the textile industry as a +hole +ill i"!ro%e. sti"ates for 1..5 indicate that !roduction re"ained "ore or less stable7 in real ter"s7 a trend +hich is !ro6ected to continue for the follo+in3 years. Pros!ect are7 ho+e%er7 not e(ually !ositi%e for all se3"ents of the industry. :uch de!ends on the health of 10s clothin3 industry7 +hich itself has been de!ressed7 on the further de%elo!"ent of still 3ro+in3 se3"ents of the success of the sector7 follo+in3 the !ro3ressi%e o!enin3 of third countries0 "ar$ets. MAIN INDICATORS IN CURRENT PRICES (6)
(Milli%n ECU) *!!arent Consu"!tion Production xtra4 1 ex!orts 'rade balance "!loy"ent (thousands) 67AG EA+A= 677+ 7G9+7 6776 7EE99 677= 7GHAA 6778 AHA79 6779 A7A6+ 677G (=) AE78= 677G (8) 78GE7 677H (9) 7H+H+ 677E (9) 77=6+ 677A (9) 6+=GH+
14!roduced textiles in 3ar"ents asse"bled +ith in or
EA77H 696H+
79699 6H88A
79+8H 6H9++
76AA6 6H7HE
A8889 6E77H
AH97H =+66G
AH=77 =68+9
7+87+ 67E8H
7=99+ =+GH+
7G67+ =69E+
7A+A+ ==G7+
769 68H8
-6=HG 6==A
-8E+A 66EE
-8A+E 66++
-8GH+ 6+=9
-8869 77+
-6H88 7E+
-86A7 6+68
-8H=+ 77+
-9+=+ 7A+
-99A+ 7H+
By : Garima Minocha
ADe"a2e "eal ann:al 2"%<t$ "ates (6)

(F) *!!arent Consu"!tion Production xtra4 1 ex!orts xtra 4 1 i"!orts 67AG-7+ 1.3 677+-79 41.& 67AG-7+ 4/.1 677+-79 3.1
/.4 1.2 &.4
42.3 4.5 &.1
4/.) 2.# &.2
3.3 1/.4 ).4
1. So"e country data for a!!arent consu"!tion7 !roduction and e"!loy"ent ha%e been esti"ated. 2. A 5* G I 3. and urostat esti"ates.
urostat esti"ates for 1215.
4. 2ounded A2I forecasts for 12 15. F%"ei2n T"ade xtra4 1 i"!orts as +ell as ex!orts of textiles in current !rices ex!anded continuously bet+een 1.)5 and 1..47 althou3h i"!orts 3re+ "uch faster (&&<) than ex!orts (42<). 'his trend translated into a 3ro+in3 trade deficit +hich reached 3.) billion C1 in 1..2 and has been decreasin3 a3ain ste! by ste! since then. 'he 1 textile industry has to i"!ort "ost of its ra+ "aterials (cotton7 +ool7 sil$7 etc.). 'he exclusion of this trade sho+s that the 1 textile industry has a "uch s"aller trade deficit in "anufactured textile trade. In 1..47 the trade balance in 1 ex!orts and i"!orts of textiles (excludin3 natural fibres) a"ounted to a deficit of only /.& billion C1. xcludin3 also $nit+ear7 the 1 trade balance in textiles e%en sho+ed a sur!lus of 3.4 billion C17 +ith risin3 tendency. *lthou3h 1 textile i"!orts 3re+ "uch "ore than ex!orts for "ost of the !eriod fro" 1.)5 to 1..47 this !attern started to chan3e in 1..27 +hen ex!orts be3an to 3ro+ faster than i"!orts. 5et+een 1..2 and 1..47 1 textile ex!orts increased by "ore than 1)<7 co"!ared +ith only about 13< for i"!orts.
By : Garima Minocha
*ccordin3ly7 the ex!ort=i"!ort ratio has i"!ro%ed7 +ithout ho+e%er reachin3 the le%el of the years earlier than 1../. Aurin3 the !eriod 1.)5 to 1..4 the ex!ort share in 1 !roduction increased fro" 15.# to 1..&<7 +hile the i"!ort share in 1 consu"!tion increased fro" 14.& to 22.2<. 'he lar3est ex !ort "ar$ets for 1 12 textile +ere the 1S*7 S+it8erland and ex!ort
*ustria +ith ex!ort shares bet+een )< and 11< in 1..4. 'hey are follo+ed by Poland7 Ea!an7 'unisia and :orocco. *!art fro" Ea!an7 these three "ar$ets dra+ their i"!ortance fro" out+ard !rocessin3 trade. 1 co"!anies ex !ort textiles to these countries to be !rocessed into 3ar"ents +hich are then re4 i"!orted into the 1. 5et+een 1.). and 1..47 the share of the "a6or ten 1 textile destinations for the 1 120s textile i"!orts re!resented 5.< of all textile i"!orts in 1..4. 'he !rinci!al su!!lyin3 countries accountin3 for one4third of i"!orts in 1..47 +ere China7 'ur$ey7 India and *ustria7. 5et+een 1.). and 1..47 China7 'ur$ey7 India7 Indonesia and Pa$istan increased their i"!ort shares7 +hile *ustria7 S+it8erland7 1S* and also ?on3 @on3 and South @orea7 lost shares in 1 i"!orts. M -%eral textile ex!orts re(uired at a le%el of al"ost #/< I"!orts of textiles are e(ually concentrated as the ten "a6or countries of ori3in for 10 12 Exte"nal t"ade in 1:""ent #"i1es
(Milli%n ECU) xtra 4 1 x!orts xtra4 1 i"!orts 'rade balance 2atio ex!orts=i"!orts 'er"s of trade index 67AG 141&4 13523 #51 1./ )3.) 677+ 1#33) 1&#/4 412#5 /.. 1//./ 6776 1#4// 2/1/& 43&/) /.) 1//.5 677= 1#.#& 2/&&4 43)/& /.) 1/1.3 6778 1&..# 2155# 435#/ /.) 1//.. 6779 2/115 2342. 43314 /.. 1/1.. 677G(6) 213/4 22.3# 41#33 /.. >=* 677G(=) 1.&3# 22.25 431)3 /.. >=*
By : Garima Minocha
1) urostat esti"ates. 2) urostat esti"ates for 12 15. Re1ent T"ends *!!arent consu"!tion of textile !roducts in the 17 in real ter"s7 has !ractically been sta3nant o%er the last nine years. *fter a sli3ht increase durin3 the first half of the !eriod7 a corres!ondin3 decrease follo+ed in the second half. In current !rices7 1..3 stands out as a %ery difficult year for the textile industry7 +ith a fall in a!!arent consu"!tion of "ore than #< +hile the esti"ated 1..5 le%el has a3ain reached that of 1..1. 5et+een 1.)5 and 1..57 !roduction in the textile industry has follo+ed the
consu"!tion trend. In real ter"s7 it fluctuated around an a%era3e annual 3ro+th rate of /.4< fro" 1.)5 to 1../7 but decreased at an a%era3e annual rate of 2.3< in the !eriod 1../ to 1..4. 'he decrease in !roduction started in 1../ and has beco"e "ore ob%ious since then. In 1..3 !roduction fell by "ore than #< in constant !rices and increased a3ain by 3< in 1..4. 'his de%elo!"ent has to be !laced in the context of the 3eneral econo"ic recession and the te"!orary reco%ery in 1..4. Preli"inary fi3ures for 1..5 indicate a ne+ fall of !roduction of around 1< in real ter"s. In current !rices7 !roduction in 1..5 is esti"ated to ha%e been si"ilar to that in 1../. *s out!ut in the textile industry has fallen7 e"!loy"ent has also declined. 5ut the textile industry has also under3one a !rocess of restructurin3 in recent year in order to reduce costs7 increase !roducti%ity and i"!ro%e co"!etiti%eness. 'his has contributed to i"!ortant reductions in e"!loy"ent reinforced by the effects of the econo"ic recession to+ards the end of this !eriod. In the last 1/ years the industry lost nearly 5//7/// 6obs (42#<). *fter losses of "ore than 1//7// (or bet+een # and &<) in 1..2 and 1..37 5/7/// 6obs +ere lost in 1..4 (44<). sti"ates indicate that a further 3/7/// 6obs losses occurred in 1..5.
By : Garima Minocha
'he
1 trade balance in textiles (includin3 ra+ "aterials) reached a "axi"u"
deficit in 1..2 of an esti"ated 3.) billion C1. Since then7 the trade balance has i"!ro%ed steadily and has reached an esti"ated deficit of 2.# billion C1 for the 112 in 1..5. 9or the 115 it is ex!ected to be "ore than 4 billion C1. I nte"nati%nal 1%&#a"is%n Co"!ared to the other bi3 industrialised countries7 the a!!arent consu"!tion of textiles in 1..47 based on than the 1S* and al"ost #/< +hile in the res!ecti%ely. 1 total textile !roduction in 1..47 also in C17 +as 4/< hi3her than in the 1S* and #&< hi3her than in Ea!an. 5et+een 1.)5 and 1..4 textiles !roduction in curate !rices increased "ost stron3ly in Ea!an (21<)7 follo+ed by the 1S* (1.<)7 +hile !roduction in the 1 increased by only 12<. 1 had the hi3hest
C1s7 al"ost 25< "ore
"ore than Ea!an. ?o+e%er7 bet+een 1.)5 and
1..4 a!!arent consu"!tion7 in current !rices7 ex!anded "ost in Ea!an (N3#<)7 1 and the 1S* consu"!tion increased only by 1& and 1#<
O:tl%%; *s the 1 econo"y e"er3es fro" recession !ros!ects for the textile industry
as a +hole +ill i"!ro%e . *!!arent consu"!tion7 after 1..#7 is ex!ected to increase at an annual rate of 2 to 3< in current !rices7 +ith extra4 1 ex!orts ex!andin3 at a rate of 4 to "ore than 5<. Production in current !rices is forecast to increase by an a%era3e annual rate of 1 to 2< unit 1..). sti"ates in real ter"s7 ho+e%er7 indicate that !roduction sta3nated a3ain in 1..5. I"!orts (includin3 ra+ "aterials) are ex!ected to increase "ore than ex!ortL this +ill result in a further +orsenin3 of the trade balance. 'his7 ho+e%er is not necessarily the case +hen the i"!act of ra+ "aterials is excluded.
By : Garima Minocha
'he
1 industry +ill
ha%e to face continuin3 co"!etition fro" lo+er 4 cost
countries outside the 17 reinforced by the 3radual liberalisation of the textile and clothin3 trade. Pros!ects are7 ho+e%er7 different re3ardin3 the se3"ents of the textile industry and the re3ions of the 1. 'he delocalisation of 1 clothin3 !roduction7 "ainly to locations close to the ast uro!ean countries in 1..)7 17 +hich +ill be fa%oured by the
Custo"s 1nion +ith 'ur$ey and the liberalisation of textile trade +ith Central and +ill also !ose ne+ !roble"s to textile 1 clothin3 industry. 'extile "anufacturers7 +ho are traditional su!!liers to the
!roduction +ith a relati%ely hi3h content of labour (as in the lo+ to "ediu" (uality !roduction of fabrics) is ex!ected in !articular to ex!erience decreasin3 "ar$et shares7 as co"!etition fro" lo+er4!riced i"!orts +ill continue for so"e ti"e to be concentrated in this "ar$et se3"ent. ?o+e%er the results of the 1ru3uay 2ound7 and the continuin3 efforts for a further o!enin34u! of third country "ar$ets7 +ill at the sa"e ti"e offer ne+ challen3es to the 1 textile industry.
INDUSTRY STRUCTURE C%&#anies In 1..47 the 1 textile industry +as "ade u! of about #//// fir"s7 of +hich
&5< +ere fir"s +ith less than 2/ e"!loyees. 'hese s"aller fir"s e"!loyed 1.< of the total +or$force (1.3 "illion e"!loyees) and 3enerated about 15< of total turno%er. 9ro" the early 1.)/s7 s"all textile fir"s increased their share of both e"!loy"ent7 this !attern is ex!lained by the fact that the reduction in e"!loy"ent has been 3reater in lar3er co"!anies. In ter"s of turno%er7 the ten lar3est textile co"!anies account for about 11< of the 1 textile industry0s total turno%er in 1..4. 'he fi%e lar3est co"!anies alone account for &.&< of the total (Coats Diyella7 5eaulieu7 Courtaulds7 A:C and :ar8otto). *"on3 these7 Coats Diyella7 Countraulds and :ar8otto also !roduce
By : Garima Minocha
clothin3 !roducts. ,ithin the
1 (15) there is a ne+ na"e in the list of the to!
ten7 +hich is :olnlye$e of S+eden7 no+ in third !lace.
St"ate2ies 1 textile fir"s a!!ly %arious strate3ies de!endin3 on their !lace in the so4called textile chain. 9or exa"!le7 !roducers of cotton yarn do not o!erate in the sa"e co"!etiti%e en%iron"ent as !roducers of $nit+ear. 'heir strate3ies also differ accordin3 to co"!any si8e and location +ithin the 1. 'extile co"!anies in the !lants in 1 ha%e reduced ca!acities continuously o%er recent year7 but in%ested in extensi%e technolo3ical "odernisation "easures and in !roduction third countries. 'hey tend to s!ecialise in a li"ited nu"ber of !roduction !rocesses7 relyin3 !artly on subcontractin3 so"e se3"ents of the industry. * 3ro+in3 nu"ber of 1 textile co"!anies ha%e also tended to de%elo! strate3ies ca!able of safe3uardin3 their !osition as su!!liers to an increasin3ly delocalised 1 clothin3 industry. -f 3ro+in3 i"!ortance in the future +ill be "ore a33ressi%e ex!ort strate3ies7 in order to find ne+ "ar$ets in third countries. *ll these strate3ies result in a chan3e of co"!any or3anisation and "ana3e"ent "ethods in order to "aintain or to stren3then the fir"0s co"!etiti%eness. 'he deterioration of the econo"ic situation in the early 1../s not only caused a decrease in consu"!tion of clothin3 and textile !roducts7 the so4called direct de"and for textile !roducts7 but also a decrease in so"e industries in +hich textile !roducts are used. xa"!les are the car industry and construction. 9all in fibre consu"!tion in 1..1 +as "ainly caused by a!!arel. 'he clothin3 industry is "ostly interested in classic loo$s and the co"fort of natural fibres. Softness and fitness ha%e beco"e essential characteristics. >atural fibre blends +ith %iscose and acrylic are !o!ular for their soft7 su!!le7 li3ht handle and their lo+4cost ad%anta3es.
By : Garima Minocha
'he technical textile "ar$et in the
1 occu!ies an i"!ortant !lace in the total
textile "ar$et accountin3 for about 21 !ercent of all fibres consu"ed. 'he "ost i"!ortant "ar$et se3"ents are industry textiles (3. !ercent) and trans!ortation textiles (2/ !ercent). 'he fastest 3ro+in3 are 3eotextiles and leisure textiles. 5ast and leaf fibres are used in lar3e (uantities for technical a!!lications. 'he technical textile "ar$et is es!ecially affected by decreases in defence
bud3ets. -ther external factors influencin3 the "ar$et for technical textiles are en%iron"ental rules7 concerns for (uality and the i"!le"entation of :9*4ty!e trade a3ree"ents. 'he "ar$etin3 in share of con%entional technical fibres in !ercenta3e of all fibre consu"!tion technical textiles is &/ !ercent. ?i3h4tenacity fibres co%er 2& !ercent of the technical textiles "ar$et. Con%entional fibres used for technical textiles are used in essentially the sa"e for" as fibres for a!!arel or interior a!!lications7 althou3h usually in different deniers (a "easure"ent of thic$ness=density=+ei3ht). Cotton has al+ays had an i"!ortant "ar$et share in the technical sector. It still accounts for al"ost 3/ !ercent of the con%entional fibres used and about 2/ !ercent of all fibres used in technical textiles (tents7 can%as !roducts etc.). Discose is the second i"!ortant of the con%entional and of all fibre s.
By : Garima Minocha
EU YARN MAR?ET
C%ns:&#ti%n 'he "ost i"!ortant "ar$ets in the 9or Ger"any this is 1&.4 !ercent7 'he 1 are Italy and Ger"any. 'he yarns 1 consu"!tion of yarns has decreased
consu"!tion of Italy co%ers 2).. !ercent of the total 1 consu"!tion in %olu"e. by 1..3 !ercent bet+een 1../ and 1..3. 'his +as caused by H deterioration of the econo"ic situation in uro!e0 +ea$ness of the uro!ean textile cli"ateL unfa%orable de%elo!"ents in exchan3e rates.
In 1..37 Aen"ar$0s yarn consu"!tion decreased dra"atically to a (uarter of the consu"!tion in 1../. Italy7 the bi33est consu"er "ar$et in the 1 +as the least affected by the decrease (4... !ercent).
CONSUMPTION OF YARNS IN T!E EUROPEAN UNION (IN TONNES)@ 677+-6778
T%tal EU Italy Greece 1nited @in3do" S!ain Ireland 9rance Portu3al 5el3iu" Ger"any 'he >etherlands Aen"ar$
677+ =@E89@=99 &/&7524 1557.44 2.57&41 1&17))/ 317#34 3147/)3 23/7&1# 2/57#24 52.743/ 5&7&4/ 337.2)
6776 =@G7+@999 &1474)) 13271&. 2#.7)4# 1&/7123 3/73./ 2&)75.4 2/47))5 1.27.&/ 5/)74&2 557/11 3374)#
677= =@9AH@EE+
#+",,-#
6778 =@=+H@9+E
#!&,! +4
13&71/5 2&5743/ 1#57/#5 357##& 2)&7/&3 1.&7).1 1)57/3# 43&7#23 5/7&.. 3275&5
13)7)/& 2557#/4 14&7.&2 257)13 2437&&2 1&47//3 1527#42 3)473)5 3&7./4 )7221
677+-78 -67'8 4... 411./ 413.# 413.. 41).4 422.4 424.# 425.) 42&.4 434.4 4&5.)
By : Garima Minocha
P"%d:1ti%n 'he "ain !roduction countries of yarns in the 1 are Italy and Ger"any 'hese countries !roduced #&17.// and 3#17)// tonnes of yarns res!ecti%ely in 1..3. In both countries !roduction decreased in the early 1../s. In Italy the decrease +as rather "odest (2.) !ercent) but in Ger"any !roduction +ent do+n +ith 22./ !ercent. Iceland is the only country in the 1 +ith increasin3 !roduction of yarns bet+een 1../ and 1..3.
Production of yarn in the EU (in tonnes), 1990-93
677+ 'otal 1 Italy Ger"any S!ain 1nited @in3do" 9rance Portu3al Greece 5el3iu" Ireland 'he >etherlands Aen"ar$ 2735#7322 #./7.// 4#471// 2227/2) 1..7/// 2217541 1)#73.3 1&272#& 15/75// 247341 1#7..1 )72#1
6776 2722575)2 #..7/// 43&75// 2147//) 1#)7&// 1./72&/ 1#/7/&2 1#37/&& 14571/1 2472.3 147.33 )7#2)
677= 271447/&5 &/27&// 3).7#// 2/17)&4 1&#7.// 1).71.# 14&72/) 14&7324 14/72)# 257#14 137.34 .743.
6778 27/13722) #&17.// 3#17)// 1.473/& 1#47&//. 1#374#5 14/753/ 13)7)/& 12.7&2# 257)13 137.#/ )7221
677+-78 414.# 42.) 422./ 412.5 41&.2 42#.2 4 24.# 41..4 413.) N#./ 41&.) 4/.5
'he recession in the i"!ortant
1 "ar$et of Italy and Ger"any continues. Its ast.
has resulted in fierce co"!etition for "odestly reco%erin3 "ar$ets in the 1nited @in3do" and the 1nited States7 and for the e"er3in3 "ar$ets in the 9ar
By : Garima Minocha
?o+e%er7 textile "anufacturers no+ belie%e that the +orst +hich has threatened the existence of a lar3e !art of the industry7 "ay ha%e !assed. 'he sur%i%al of textile !roducers in ,estern
of the recession7 uro!ean textile
uro!e de!ends on hi3her added
%alue and in%enti%eness in desi3n and !roduction. 'he 1 textile industry is under3oin3 si3nificant chan3e and "anufacturers are
shiftin3 their !roduction a+ay fro" co""odity4based ite"s to "ore s!ecialised !roducts. *cce!tin3 that a return to the stron3 days of the 1.)/s is unli$ely7 yarn "anufacturers are 3earin3 their !roduction to s"aller orders by offerin3 (uic$er deli%eries (uic$er deli%eries and a +ider %ariety of loo$s. 'he e"!hasis for yarns for the clothin3 business is on co"fort and !erfor"ance. 'he sou3ht4after soft handlin3 (ualities "ust also be durable yarns for stretch fabrics are also %ery "uch in de"and. I&#%"ts 'he 1 is a net i"!orter of yarns. In 1..2 the 1 i"!orted a total a"ount of C1 co"!ared to C1 #7./3
271)) "illion tonnes of yarns7 +orth )7.3) "illion
"illion for ex!orts (174## "n tonnes). 'he "ost si3nificant i"!ort !roducts are synthetic and artificial fila"ents7 cotton and synthetic and artificial fibres. 'he "ost i"!ortant i"!ortin3 countries are Ger"any7 5el3iu"7 9rance7 the 1nited @in3do" and Italy. 'hese fi%e countries i"!orted "ore than three (uarters of the total %alue of 1 i"!orts of yarns in 1..2. Ireland is the s"allest i"!orter of the 17 in 1..2 i"!ortin3 at a %alue of 145 "illion C1. *l"ost three (uarters of 1 i"!orts ste" fro" intra4 1 trade. 9or 6ute7 sil$ and 1 is "ost
the other natural yarns7 the i"!ort fro" countries outside the
i"!ortant. I"!orts fro" de%elo!in3 countries are "ost i"!ortant in the extra4 1 i"!orts of cotton7 6ute and sil$. 'he i"!orts of synthetic and artificial fibres and fila"ents fro" de%elo!in3 countries are (uite considerable in %alue. 5y far the "ost si3nificant bast fibres is the 1@7 es!ecially for 6ute and coir. Portu3al is an
By : Garima Minocha
i"!ortant i"!orter of sisal fibres. I"!orts of yarns of bast fibres other than 6ute decreased by # !ercent in %olu"e in 1..2. 5ast fibres and their yarns ha%e been losin3 3round to synthetics in "any end !roducts7 li$e car!et bac$in3s7 ba3s7 sac$s7 nets etc. fforts are needed to stren3then the de"and in traditional uses7 for instance en%iron"ental issues7 and for ne+ end uses (di%ersification). Ex#%"t 'he "ost i"!ortant yarns ex!orted by the 1 are the synthetic and artificial
yarns7 to3ether +ith cotton. 'he ex!ort of the other natural yarns7 6ute and +ool has increased considerably bet+een 1../ and 1..27 both in %olu"e and in %alue . -n the other hand the decrease in the sa"e !eriod. 'he "ost i"!ortant yarn ex!ortin3 countries in the 1 are Ger"any7 9rance7 1 ex!ort of sil$ and flax re%eals a si3nificant
Italy7 the 1nited @in3do" 5el3iu"=Buxe"bour3 and 'he >etherlands. 'he ex!ort of yarns fro" the 1nited @in3do" and the >etherlands has 3ro+n notably. 'he 3ro+th of the ex!ort fro" these countries reached a !ea$ in 1..1. Ireland is the least si3nificant ex!ortin3 country in the 17 althou3h bet+een 1../ and 1..2 its ex!ort fi3ures ha%e increased at an enor"ous rate. 'he "ost i"!ortant yarn4ex!ortin3 countries in the 1 are Ger"any (about 2.
!ercent of ex!ort %alue in 1..2)7 Italy (23.4 !ercent)7 the 1@ (12.. !ercent)7 9rance (11.. !ercent) and 5el3iu"=Buxe"bour3 (..& !ercent). 'hese countries are also the "a6or "ar$ets for yarns in the detail in the next cha!ter. 1 and +ill be described in "ore
By : Garima Minocha
EU i&#%"t %0 /a"ns 4/ 1%:nt"/@ in D%l:&e (in t%nnes) and Dal:e (ECU x 6@ +++)@ 677+-7=
677+ Dolu"e =@6=+@E9A 3&&7/&5 3247#2& 3/27/12 2.&7#15 35/72)/ 15#74#2 )1711/ 1/174/3 5#7./4 4/7.1# 327344 Dalue A@77=@=99 17&.&7)5# 174.47)3. 175517211 1712)7&41 171317521 #1171/1 34#75#) 3)47/11 23)7.1/ 1)37135 1247351 6776 Dolu"e =@69A@+9E 3.4752) 322731. 2)&7/.5 2.175.1 3#47#11 15.72#2 .)7#12 1/273#1 5475.# 357#43 3&742. Dalue A@7=E@EAA 17)4.732# 1742#7.31 1743574/1 171)&7.53 171117.)2 #/4722. 4/572// 3)#7#./ 22#741# 15.7)4/ 1337)2/ 677= Dolu"e =@6AE@7G9 3#57#21 3547351 2)1.543 3137#)1 3#57531 14)7522 1117&&3 1/)722) 517./1 4&73#& 4/73&# Dalue A@78E@ 7EH 17&347)2/ 175217225 273#.7#)2 172337)52 17/#47.4& 5.175)2 44#7&2) 4/)7/22 21)7)32 2/37/3. 145724&
T%tal Ger"any 9rance Italy 1nited @in3do" 5el3iu"=Buxe"bour3 'he >etherlands S!ain Portu3al Aen"ar$ Greece Ireland
EU I&#%"t %0 C%tt%n Ya"n

Cotton Intra4 1 xtra4 1 of +ith Ae%elo!in3 countries astern uro!e >ot deter"ined=secret 5)37345 2)17)/) 3/17532 1&.7#51&741 ) 27/557&&/ 17/5#74// ...7225 5#.72111.7... 53471)1 2&&751# 25#7#/1 1)2712.57.2 3 17.)27#.4 17/257#). )5#7&.) 55.745)147)55 5337#4# 2)/7#5. 2527)3. 1#37)4/)7&42 17&.#734# 17/127/1# &)37.// 5517//)52752 2
45
#4
2/&
14#
43/
By : Garima Minocha
REGULATIONS AND PRODUCT C!ARACTERISTICS

'he textile and clothin3 industry is re3arded as one of the "ost sensiti%e sectors +hen it co"es to i"!orts fro" lo+4cost de%elo!in3 countries. 'herefore7 the 1 i"!ort restrictions7 and ex!ort restrictin3 a3ree"ents and arran3e"ents bet+een 1 and a nu"ber of i"!ortant textile ex !ortin3 de%elo!in3 countries7 ha%e 10s trade !olicy. 'he 10s traditionally been included in the fra"e+or$ of the
bilateral textile a3ree"ents under the G*'' :ulti 9ibre *rran3e"ent (:9*) ex!ired at the end of 1..47 but +ere at the sa"e "o"ent re!laced by ad"inistrati%e arran3e"ents under the ne+ ,'- *3ree"ent on 'extile and Clothin3 of the 1ru3uay 2ound7 +hich +ill be in force until the end of 2//4. Aurin3 the ten year !eriod all (uantitati%e restrictions7 existin3 at the end of 1..47 +ill ha%e to be !hased out and liberali8ed7 by inte3ration of the !roducts concerned into the ,'- syste". * first 3rou! of !roducts (1#< of 1 i"!ort %olu"e in 1../ of textiles and clothin3) has already been inte3rated at the be3innin3 of 1..57 a second 3rou! of !roducts (1&<) has to follo+ at the be3innin3 of 1..). 'he selection of !roducts to be inte3rated +ill certainly ha%e an i"!act on i"!ort de%elo!"ents in the rele%ant "ar$ets. -nly a fe+ other 1 re3ulations s!ecifically a!!ly to the textile sector. 'he "ost i"!ortant is the le3islation since 1.&1 on the indication (labellin3) of the fibre content of textile !roducts and on the rele%ant testin3 "ethods. fforts to establish certain safety re(uire"ents re3ardin3 the infla""ability of fabric for u!holstered furniture are still under discussion. -ther le3islation co%erin3 all industrial sectors7 also includes textiles7 so"eti"es in a a!!lies for ex a"!le to the ne+ !ro3ra""e of the 17 s!ecific +ay. 'his 2 ' I for 1 sche"e of Generali8ed Preferences (GSP)7 su!!orts entre!reneurial initiati%es
+hich ta$es into account the sensibility of the sector7 or to the +hich
di%ersification7 in those re3ions +hich are stron3ly de!endent on the textile and clothin3 industry. Pa1;a2in2@ Ma";in2 3 La4ellin2
By : Garima Minocha
'he "ost i"!ortant la+s re3ardin3 !ac$a3in3 and labellin3 are the directi%es issued by the Council of the uro!ean Co""ission. Generally s!ea$in3 there 1 !ro"otes the free are t+o se!arate !olicy 3uidelines +hich affect the le3islati%e acti%ities of the 1 re3ardin3 !ac$a3in3 and labellin3. -n one hand7 the "o%e"ents of 3oods. *ccordin3ly7 re3ulation re3ardin3 "anufacturin3 as +ell as !ac$a3in3 and labellin3 in one 1 "e"ber state 3i%es the !roduct free access to all other 1 countries. -n the other hand7 the 1 also !ro"otes !ublic health and restricti%e re3ulations are in force in order to !rotect the en%iron"ent and consu"ers. -ne i"!ortant 1 directi%e +hich !ro%ides co""on rules concernin3 +ei3hts or %olu"es of !re4!ac$ed !roducts is directi%e &#=211 +ith nu"erous subse(uent a"end"ents. 'his directi%e re3ulates the standards of !ac$a3in3 i.e. the tolerance bet+een stated and actual (uantities and the necessary "ar$in3s such a s"all OeP can be added by &1=31#= +ei3hts and %olu"es. n%iron"ental !rotection also affects !ac$a3in3. 'he Co""ission is !resently +or$in3 on a co"!rehensi%e directi%e on !ac$a3in3 and !ac$a3in3 +aste. In effect7 1 re3ulations !ac$a3in37 "ar$in3 and labellin3 is constantly chan3in3. Conse(uently7 !otential ex!orters are ad%ised to consult the actual directi%es in force to obtain the latest re3ulati%e infor"ation. Infor"ation can be obtained fro" the le3islation series (B) of the -fficial Eournal of the official the fac$er or i"!orters. In addition or this infor"ation. Carns are 3enerally trans!orted on cones in cardboard boxed. Kuantities !er order "ay %ery +idely7 but the lar3e tradin3 houses !lace a%era3e order si8es of 3/ to 5/ tonnes. 1. 'he 5ureau for 1 !ublications in Buxe"bour3 can !ro%ided no"inal (uantity7 sy"bol of 1 industry as the 1 %erification "ar$ (directi%e C). :oreo%er7 these directi%es !ro%ide a classification of !er"issible
By : Garima Minocha
'he ter"s O1// !ercentP or OallP "ay only be used if the !roduct is co"!osed of one and the sa"e fibre. ?o+e%er7 a textile !roduct "ay contain u!to 2 !ercent by +ei3ht of other fibres +hen this is 6ustified on technical 3rounds and is not added as a "atter of routine. 'he tolerance le%el is increased to 5 !ercent +hen the !roducts ha%e under3one a cardin3 !rocess. :oreo%er7 the ter" O!ure +oolP or Oshorn +oolsP "ay be used only +hen the !roduct is co"!osed of a fibre +hich has not before been incor!orated in a finished !roduct. ,hen the co"!osition of a !roduct contains t+o or "ore fibres and one of the" accounts for at least )5 !ercent of the total +ei3ht7 the na"e of that !articular fibre has to be used7 follo+ed by its !ercenta3e by+ei3ht or by the +ords G)5 !ercent "ini"u"0. In the case that none of the fibres accounts for )5 !ercent7 the !roduct has to s!ecify the na"e and !ercenta3e by+ei3ht of at least the t+o "ain fibres7 follo+ed by the na"es of the other fibres in descendin3 order of +ei3ht7 +ith or +ithout an indication of their !ercenta3e of +ei3ht. 9ibres +hich account for less than 1/ !ercent of the total +ei3ht should collecti%ely be s!ecified as Oother fibresP. -ther "ar$in3s and infor"ation than those !rescribed in the abo%e directi%e "ust be clearly se!arated. ?o+e%er7 brand na"es "ay acco"!any the "ar$in3s7 althou3h their use should not be "isleadin3. 'he +ei3ht of %olu"e7 na"e of the "aterial and other ite"s "entioned on the labels "ust also be "entioned on the acco"!anyin3 trade docu"ents.
By : Garima Minocha
Ot$e" "eleDant standa"ds.n%"&s International standardisation is beco"in3 increasin3ly i"!ortant to be able to ex!ort successfully. 'he docu"ented a3ree"ents contain technical s!ecifications and= or other !recise criteria (rules7 3uidelines or definitions of characteristics) to be used consistently. 'heir "ain !ur!ose is to ensure that "aterials7 !roducts7 !rocesses and ser%ices are a!!ro!riately suited for their final !ur!ose. 'he de%elo!"ent of international standardi8ation is underta$en by the International -r3ani8ation for Standardi8ation (IS-). So4called IS- nor"s 3uarantee the unifor"ity of a !roduct7 but !ro%ide no (ualitati%e assurances of the !roduct in (uestion. >e%ertheless7 IS- nor"s are beco"in3 increasin3ly i"!ortant in order to facilitate +orld trade. In 3eneral7 users !refer !roducts +hich confor" to international set standards. n%iron"ental issues ha%e beco"e i"!ortant in s!ecifyin3 nor"s for textile !roducts. In 1..27 the uro!ean Co""ission introduced a syste" of en%iron"ental tests. Products +hich "eet these standards7 are allo+ed to use an eco4label. 'he tests ta$e into account the entire !rocessin3 "ethod. ?o+e%er7 these tests turned out to be too a"bitious. It +ill ta$e "ore years to de%elo! better suited 1 standards re3ardin3 eco4labellin3. Conse(uently7 the eco4label is a!!lied on a %oluntary basis until these One+P standards ha%e been s!ecified. In the "ean ti"e se%eral national 3o%ern"ents7 a"on3 others in the >etherlands and Ger"any7 and !ri%ate cor!erations ha%e de%elo!ed and introduced their o+n eco4labels. 9or instance7 the !roduction of cotton "ust co"!ly to the follo+in3 conditions to be a+arded the eco4label in 'he >etherlandsH 'he ra+ cotton has to be hand4!ic$ed and not be s!rayed +ith che"icals +hich defoliate the !lant (defoliation is necessary for "achine har%estin3)L >o toxic che"icals (for"aldehyde=5en8edrine) are used durin3 !rocessin37 and=colour additi%es are achie%ed in a closed 6et syste"L ,aste +ater has to be treated before bein3 released a3ain.
By : Garima Minocha
>e%ertheless7 the en%iron"ental !olicies of the %arious national 3o%ern"ent in the 1 still differ considerably fro" one country to another.
In the >etherlands the OStitchin3 :ilieu$eurP ( co4label 9oundation) has +or$ed out standards for en%iron"ents tests. 'hese not only focus on safety and health of consu"ers but also on the en%iron"ental soundness of the !roduction !rocess. 'he textile industry is bounded by se%eral strict re(uire"ents concernin3 !ollution of surface +ater. *da!tation of the !roduction !rocess to these re(uire"ents +ill re(uire hi3h in%est"ents. 'hese additional costs are included in the !rice of the !roducers. *lthou3h the coo!eration of !roducers is still %oluntary7 "any !roducers consider the O"ilieu$eurP labellin3 of their !roducts a 3ood "ar$etin3 tool. *s fro" :arch 17 1..5 the s!ecified en%iron"ental co4label 9oundation in the >etherlands has re3ardin3 3ar"ents and textiles.
re(uire"ents
Producers and i"!orters of these !roducts can a!!ly for the official eco4label ( the so4called O @-4"ar$P) +hen "eetin3 these re(uire"ents. 'he set re(uire"ents focus !ri"arily on the !roduction !rocess and=or u!3radin3 of textiles li$eH air and +ater e"issions durin3 !rocessin3H bleachin3 "eans +hich contain chlorine are not !er"ittedH a "axi"u" li"it of hea%y "etals7 or3ano4chlorine !esticides7 -I7 colourin3 and for"aldehyde in the end !roductH no 3al%anished haberdashyery to be used H infor"ation "ust be !ro%ided re3ardin3 !ossible s$in4irritatin3 in3redientsH the 3ar"ents and textiles should "eet certain (uality re(uire"ents +ith res!ect to shrin$a3e and authenticity of +ashin37 friction and li3ht.
By : Garima Minocha
*ll re(uire"ents ha%e been set do+n for"ally in a certification sche"e7 +hich +ill be re%ised e%ery three years. Since re(uire"ents in the >etherlands are %ery strict co"!ared to other !ro3ress by 1 countries7 accordin3 to the >etherlands textile industry7 coordination is needed to !re%ent unfair co"!etition. ,or$ is in uro!ean trade or3anisation to introduce one eco4label7 to achie%e clarity on the "ar$et. Consu"ers see" to ha%e "ore confidence in the en%iron"ental soundness of the !roducts +hen there is one eco4label.
By : Garima Minocha
INDO-EU TRADE
'he uro!ean 1nion is the "ost i"!ortant !artner of India. In 1..44.5 India0s
ex!orts to the 1 a"ounted to 2#.&< of India0s total ex!orts7 lea%in3 the 1S* as the nu"ber t+o ex!ortin3 destination (uite far behind +ith only 1..1<. -ther i"!ortant ex!ortin3 destinations for India (1..44.5) are Ea!an (&.&<)7 2ussia (3.1<)7 the P C countries (..2<).
INDIA,S EXPORT- DESTINATIONS 677A-A6 TO 677G-7H Yea" 1..)/4)1 1.)54)# 1../4.1 1..14.2 1..24.3 1..34.4 1..44.5 1..44.5 *S 1..54.# *S %"ld (&illi%n) )4)# )./4 1)143 1&)#5 1)53& 2223) 2#33/ 12)2/ 1&/#5 (US5 EU) 21.#< 1&.&< 2&.5< 2&< 2).3< 2#.1< 2#.&< 2#< 2#..< USA 11.1< 1).1< 14.&< 1#.4< 1.< 1)< 1..1< 1..)< 1).5< >a#an )..< 1/.&< ..3< ..2< &.)< &.)< &.&< &.&< #.&<
*s 4 *!ril to Se!te"ber -bser%in3 the year to year 3ro+th fi3ures of India0s ex!ort to the 1 +e find that the 3ro+th of Indian ex!orts to the 17 since 1..34.47 has been si3nificantily hi3her (3&.&<) than the +orld a%era3e (33.1<). In fact7 after 1..34.4 the 1 has beco"e the fastest 3ro+in3 ex!ort 4 "ar$et for Indian !roducts.
By : Garima Minocha
'he to! 5 ex!ort !roducts are indeed ta$in3 care of the bul$ of Indian ex!orts to the 1. 'hey ha%e )5< of the India0s total ex!orts in 1.&# +hich has been declinin3 o%er the years to its !resent (1..4) le%el of less than &/<. Aurin3 the +hole !eriod 1.&#41..4 the to! three sector are ta$in3 "ore than 55< of the total ex!orts on their account. It is s!ecifically in the area of textiles that lots of dyna"ics too$ !lace after 1..4.
By : Garima Minocha
COMPOSITION OF INDIAN EXPORTS (TOP G SECTORS) TO T!E EU 67EH-6779 (Pe"1enta2es) Se1t%" 'extile De3. Products Pearls=ston es Pre!ared food stuffs Beather 67EH 25.& 1).4. 1).3 12.&# 1/.)3 67A8 13./2 11.5# 14.#4 11.13 ..4/ 6776 3#..2 5.)1 12.)4 3.#5 1/.52 6778 3&.52 #.13 11.#2 3./# 1/./# 6779 3).2 #.1/ 1/./ >.* 1/.4
Bet us ta$e a loo$ at the textiles sector. TESTICLES *s already noted7 durin3 the +hole exa"ined !eriod (1.&#4.4) the textiles4sector alone !ro%ided for "ore than 25< of India0s total ex!orts7 +ithin the do"inance only further 3ro+in3 o%er the years. Aurin3 the !eriod 1.&#41..4 the India textile sector sho+ed an a%era3e annual 3ro+th rate of 12.#<7 +hich is both abo%e the a%era3e annual 3ro+th rate of India0s total ex!orts7 and abo%e the a%era3e annual 3ro+th rate of extra4 14i"!orts in this sector durin3 the sa"e !eriod7 indicatin3 an increased co"!etiti%eness of Indian textile ex!orters in 3eneral7 India is the third lar3est ex!orter of textile to the ?on3 @on3. ?o+e%er7 3ro+th does="ay not truly sho+ India0s co"!etiti%e ad%anta3e in this sector due to %arious factors. It is !articularly in the textile sector that drastic chan3es +ill alter the tradin3 en%iron"ent si3nificantly. 'he 3radual !hasin3 out of the :9* as a3reed durin3 the 1ru3uay rounds7 the 1..4 'extile and Clothin3 *3ree"ent bet+een the 1 and India7 the !ossible i"!act of the S :7 the reduced benefits of the ne+ GSP and the increasin3 so!histication of the 1 7 after China7 'ur$ey and
By : Garima Minocha
uro!ean consu"er7 leadin3 to an au3"ent in (uality standards7 +ill all ha%e conse(uences for India 4 1 trade in this sector.
By : Garima Minocha
INDIAN EXPORTS OF TEXTILE PRODUCTS TO T!E EUROPEAN UNION (Value in US million dollars) 6778-79 Clothin3 Cotton 'extile ::9 'extiles ,oollen 'extiles 'otal 1515.11 #.4.1. 2/#.35 15.&2 2434.3& 6779-7G 2/33./# ./)).44 2)2.)/ 4&.)) 32&2.1) 677G-7H 1.&/.2/ .&4.24 345..) #3./. 3353.51 677H-7E 1)..../ 1/2&.5& 3&)... &&./) 33)3.54
C%tt%n Ya"n x!orts of Cotton yarn ha%e traditionally bein3 re3ulated +ithin a (uantitati%e ceilin3 fixed on year to year basis by G-I7 +ith a %ie+ to chec$in3 to !rice rise and ensurin3 that ade(uate su!!lies are a%ailable for the +ea%ers of the decentralised handloo" and !o+erloo" centres. India0s share of cotton yarn ex!orts is %ery s"all at about 1=)th of the total international "ar$et. ?o+e%er India re"ained as one of the "a6or cotton yarn ex!orter to India is a "a6or ex!orter of !roducts 52/5 to uro!ean
1nion. Cotton yarn in di%ided into three !roduct cate3ories4452/5752/# F 52/&. uro!ean 1nion occu!yin3 a "ar$et share of abo%e ).2/4<. It ran$s fourth in this !articular sector. 5ut +hen textiles as a +hole is ta$en India dro!!ed to the &th !lace a"on3 the 1/ leadin3 ex!orts to the uro!ean 1nion7 sand+iched bet+een Poland and 5an3ladesh.
By : Garima Minocha
'he ex!ort fi3ures of cotton yarn fro" India to belo+. EU IMPORTS OF COTTON YARN FROM INDIA (1nits 1/// C1) 677= C%:nt"/ 9rance 5el3. 4 Buxb3. >etherlands Ger"any Italy 1nited @in3do" Ireland Aen"ar$ Greece Portu3al S!ain S+eden 9inland *ustria T%tal 6778 C%:nt"/ 9rance 5el3. 4 Buxb3. >etherlands Ger"any Italy 1nited @in3do" Ireland Aen"ar$ Greece Portu3al S!ain S+eden 9inland *ustria T%tal G=+G 3/.3 14213 1.5# 1&/2) 31411 212./ 212/ 4/& ))2 442& 2#4/ 4 4 4 779H9 G=+H / 23 4) / 3)/ 1111 &3 / ) / 25 4 4 4 9HHE G=+G 45)& 1/31) 1551 154&. 31414 1)#5& &)3 21)2 2.. 15)5 3./2 4 4 4 7+EH+ G=+H / 15 / / 3)4 14&5 && 1 / 3) &. 4 4 4 =+HH
uro!ean 1nion are as sho+n
G=+E 1 / / / 2 )) 1 / / / / 4 4 4 78 G=+E # 1 / / / 23. 21 / / / / 4 4 4 =HH
T%tal 45)) 1/333 1551 154&. 31)// 2/2// )#1 21)3 2.. 1#23 3.)1 4 4 4 7=767 T%tal 3/.. 1423& 2//4 1&/2) 31&.1 22#4/ 2214 4/& )./ 442& 2##5 4 4 4 6+687E
By : Garima Minocha
6779 C%:nt"/ 9rance 5el3. 4 Buxb3. >etherlands Ger"any Italy 1nited @in3do" Ireland Aen"ar$ Greece Portu3al S!ain S+eden 9inland *ustria T%tal G=+G 1)#1 24)32 3&2/ 15##/ 335)# 1..). 1#1# 33) 11./ #211 313) 4 4 4 66=68E G=+H 2) 5. / / 14)5 13)5 33 / / / / 4 4 4 =776 G=+E 12 1 / &2 / 11. 1 1 / . / 4 4 4 =6G T%tal 1./1 24).2 3&2/ 15&32 35/&1 214.3 1#5/ 33. 11./ #22/ 313) 4 4 4 66G898
677G C%:nt"/ 9rance 5el3. 4 Buxb3. >etherlands Ger"any Italy 1nited @in3do" Ireland Aen"ar$ Greece Portu3al S!ain S+eden 9inland *ustria T%tal G=+G 2#2& 2343# 5.). 1)5.& 52.#/ 1)#1# 15&# 25# 415 5.2& 545) &)) 41& 1#4/ 68AH7G G=+H / 2&1 / / &4& 4&. / / / &4 23 #2 / / 6HGH G=+E / / / / / 12. / / / / 1 / / / 6=7 T%tal 2#2& 23&/& 5.). 1)5.& 53&/& 1.224 15&# 25# 415 #//1 54)2 )15 41& 1#4/ 69+9A+
By : Garima Minocha
RECOMMENDATIONS TO T!E INDIAN TEXTILE INDUSTRY

'he ti"e has co"e for India to e%ol%es execute both an i""ediate and lon3 ter" strate3ies for ex!orts of textiles. India has sho+n that it is able to +ithstand the international co"!etition in textiles and 3ar"ents7 their ex!orts ha%in3 s!urted durin3 the !ast fe+ years. 'rade and Ae%elo!"ent 2e!ort7 1..# by 1>C'*A says that in textiles7 for instance7 the !hase out of the :ulti 9ibre *rran3e"ent under the ,orld 'rade -r3anisation *3ree"ent +ill create an ex!ort o!!ortunity of an additional ; 1&5 billion a year for the de%elo!in3 countries. ?o+ far India +ould be able to ta$e ad%anta3e of the o!!ortunities +ould de!end on the efforts and dyna"is" of the textile industry7 bac$ed u! by the encoura3e"ent and su!!ort fro" the Go%ern"ent7 +here needed7 thou3h the habit of de !endin3 on the ty!e of !rotection it en6oyed in the !ast has to be 3i%en u!. 'he Indian textile industry has7 of course7 sho+n considerable selfreliance7 but has to de%elo! a truly 3lobal outloo$ in order to "a$e a 3reater dent in the +orld textile "ar$ets. It has to be obser%ed here that7 besides ha%in3 to counter the !rotectionist de%ices resorted to by the de%elo!ed countries7 India has to ta$e ste!s to "eet the challen3e of the $een and increasin3 co"!etition !osed by the textile !roducin3 nations of *sia +hich ha%e in the recent !ast been scor3 o%er it. Re1%&&endati%ns 1. 'he textile industry in India has to "a$e u! for lost ti"e. In order to re3ain the !osition in the +orld +hich it en6oyed only 4/ years a3o7 the !rocess of restructurin3 "ust be carried for+ard. * !olicy !ac$a3e is re(uired not only to address the !roble"s of the "ill sector the !o+erloo" sector and the handloo" sector +ithin an inter3rated fra"e+or$ but also to attend to the i"!ortant issues of fibre use7 cotton !ricin3 and cotton yield.
By : Garima Minocha
2. 'he *i" should be not to ha%e any control on the !ricin3 or on the ex!orts and i"!orts7 +hether of the ra+ "aterials or finished !roducts. *s such7 all curbs on the i"!orts and ex!orts should be lifted if liberalisation to be ta$en to its lo3ical conclusion. It is indeed ano"alous that e%en in the su!!osedly liberalised are7 the (uota syste"s for ex!orts of yarns7 cotton or ready"ade 3ar"ents etc. are bein3 continued and they ha%e to be done a+ay +ith. ?o+e%er7 it cannot be denied that often there is a need7 a!art fro" !olitical ex!ediency in so"e instances7 to !rotect so"e sectors +hen their sur%i%al is threatened and the Go%ern"ent is co"!elled to inter%ene. 'his is done e%en in the "ost de%elo!ed countries and those su!!osed to be +edded to free trade. 5ut at any rate such inter%ention has to be "ade only +hen the situation is so acute as to +arrant it7 other+ise7 it +ould "ean 3oin3 bac$ a3ain to the re3i"e of re3ulations out of +hich +e are su!!osed to be e"er3in3. 3. Pro3ressi%ely "ini"isin3 the inter%ention by the Go%ern"ent7 lettin3 the !ricin3 and !atterns of !roduction and ex!orts and i"!orts to be left "ostly to the la+s of de"and and su!!ly and the "ar$et forces +hich ulti"ately +ould lead to the o!ti"u" result7 but on the other hand ensurin3 a le%el !layin3 field to the country0s industries so that they are not disad%anta3ed or discri"inated a3ainst. 4. Go%ern"ent should decide7 in its bud3etary !ro%isions7 on the i"!ort and excise duty structure7 taxation etc. +hich is (uite difficult and delicate exercise to acco""odate in a balanced "anner the conflictin3 needs and interests of the %arious sectors of the textile industry. 'he !ro3ressi%e rationalisation and "oderation of the indirect duty structure has to be carried further to encoura3e and facilitate 3reater !roduction as +ell as ex!orts as also to sti"ulate healthy co"!etition and i"!ro%e"ent of (uality. *ll obstacles7 infrastructural or !rocedural7 to ex!orts ha%e to be re"o%ed and ex!ort culture. Darious associations the in the industry ha%e sub"itted their "e"orandu"s to Go%ern"ent !leadin37 as usual7 for s!ecial
By : Garima Minocha
considerations and concessions7 but the :inistries concerned ha%e to ta$e balance %ie+ the arri%e at !ra3"atic decisions7 +ithout succu"bin3 to the !ressures of !articular lobbies and $ee!in3 in %ie+ the interests of industry and the national econo"y as a +hole. 5. x!orters should be encoura3ed to !artici!ate in fairs and exhibitions in "a6or "ar$ets as +ell as in buyer4seller "eets etc. and the x!ort Pro"otion Councils in the field7 the 'extile Co""ittee7 the research association and other or3anisations should hel! the ex!orters in any res!ects by creatin3 a+areness about hel! the en%iron"ental and safety as!ects of their !roducts7 !articularly +ith reference to the o%erseas "ar$ets7 thou3h se"inars and +or$sho!s and by other "eans7 hesodes settin3 u! and testin3 facilities for ensurin3 ex!ort friendly 3lo+balisation and the necessity for buildin3 u! international co"!etiti%eness of our textile !roduct. 'he "odernisation and technolo3ical u!3radation7 +hich has beco"e all the "ore i"!erati%e and ur3ent in the chan3ed en%iron"ent7 +ill ha%e a 3eneral i"!act on i"!ro%e"ent of the standards of our textile !roducts to the benefit of the do"estic consu"ers also7 +ho too ha%e beco"e "ore (uality conscious. #. x!orts of cotton should be freed of the restrictions of (uotas as i"!orts7 +hen needed are allo+ed. *bundant a%ailability of cotton at !rices not too lo+ for the far"ers and not too hi3h for the consu"ers is a basic need for the 3ro+th and !ros!erity of the Indian textile industry. 'he de"and for India cotton in the +orld "ar$et can built u! further the sur!lus !roduction ex!orted. &. 'he industry can beco"e "uch "ore internationally co"!etiti%e throu3h "odernisation and better or3anisation and transfor"in3 its acti%ities fro" the s"all scale sector to lar3er units to stren3then their !osition and 3ain the econo"ies of scale. ). India stands to 3ain fro" the 1ru3uay *3ree"ent in textiles and clothin3 not+ithstandin3 the fact that the liberalisation of the sector is bac$4loaded
By : Garima Minocha
durin3 the ten4year transition !eriod. 'his !eriod +ould need to be utili8ed for stren3thenin3 the co"!etiti%eness of the industry +ith a %ie+ to !ositionin3 the industry to "eet co"!etiti%e !ressures fro" other de%elo!in3 countries in the !ost 4:9* !eriod. Concerted efforts are re(uired to u!3rade technolo3y7 i"!ro%e (uality an d stren3then "ar$etin3 . In%est"ents in the "oderninsation of textile and 3ar"ent factories are needed to i"!ro%e (uality and di%ersify ex!ort7 !articularly of cotton4based to i"!ro%e (uality and di%ersify ex!ort7 !articularly of cotton 4based !roducts7 +here India en6oys co"!etiti%e stren3th. %en thou3h rede!loy"ent of textiles and 3ar"ents !roduction fro" hi3h4+a3e countries is already ta$in3 !lace +ithin the *sia re3ion7 India textile and clothin3 industries +ill face fierce co"!etition fro" other de%elo!in3 countries7 es!ecially 5an3ladesh7 China7 Indonesia7 Pa$istan7 Sri Ban$a and Dietnan7 in a (uota4free +ould. 'his +ill once a3ain !ro%ide Indian textile +ith an o!!ortunity to re3ain their !osition in the +orld the trade. .. the textile "inistry should en3a3e s!ecialist to conduct a co"!rehensi%e study and dra+ u! a ne+ action !lan to !hase out the :9* and counter the sta3nation in ex!orts7 +hich has been a "atter of concern to the industry as +ell as the Go%ern"ent. 'he textile industry has no+ to ad6ust itself to a re3i"e +ithout (uotas +hich "eans the disa!!earance of an assured "ar$et and $eener co"!etition a"on3st textile !roducin3 countries in the international "ar$ets. 5ut of course7 the "ere dra+in3 u! and enunciation of a lan +ould not be enou3h and it has to be carried out effecti%ely. 'he study should be able to identify the $ey ste!s needed to the ta$en by the Go%ern"ent to hel! the industry !ro"ote ex!orts in a chan3ed scenario. 1/. It is also necessary to orient our !roduction to the actual de"ands of the "ar$et. India has so far been 3enerally caterin3 to the lo+er end of the "ar$et7 but the e"!hasis and effort should no+ the on the ex!orts of "ore %alue added ite"s. It is essential to "eet the de"ands in res!ect of the fashions and desi3ns for +hich it is necessary that Indian textile
By : Garima Minocha
"anufacturers should !artici!ated increasin3ly in the international trade fairs to $ee! abreast of the latest trends and de%elo!"ents. In%est"ent in "odernisation is a "ust and not so"ethin3 o!tional as "ore than e%en the !rice it is (uality and deli%ery schedules that counts today in the hi3hly co"!etiti%e international "ar$et for textiles +here the de"ands are exactin3 and other su!!liers are "any. 11. In the total fibre "ix of the textile industry7 cotton accounts for al"ost &/ !er cent. ?ence the health of the textile industry !ri"arily de!ends on the su!!ly and stability in the !rices of cotton. 'he !roducti%ity of cotton in India7 +hich is only 3// $3s !er hectors7 as a3ainst the +orld a%era3e of 5&2 $3. due to %arious factors7 has to be sufficiently raised and the 'echnolo3y :ission for Cotton7 +hose settin3 u! has 6ust been announced has to address itself to an acco"!lish this tas$. 12. 'o+ards the ex!ort !otential bein3 fully harnessed in the three "ain areas of cotton yarn !rocessed fabrics and blended and "an4"ade textiles7 the restrictions +ith re3ard to cotton yarn ex!orts ha%e to be discontinued !articularly as there has been no shorta3e of yarn7 and %iable sche"es ha%e to be e%ol%ed for boostin3 and synthetic textiles for +hich there is %ery 3ood de"and in the o%erseas "ar$ets. 13. * need on +hich there is 3eneral a3ree"ent is for the rationalisation of the fiscal le%ies. 'he incidence of the fiscal le%ies on textile ite"s is (uite hi3h7 and it is necessary to rationalise the" to facilitate 3reater !roduction and consu"!tion. 14. 'he interest rates are a !art of 3eneral fiscal and econo"ic scenario of the country. In order to de%elo! the industry 3o%ern"ent should !ro%ide liberal loans on soft ter"s for the !ur!ose of "odernisation of textile industry. 15. @ee!in3 in %ie+ the difficulties and the recessionary conditions the textile industry has been !assin3 throu3h a 'echnolo3y 1!3radation 9und should be
By : Garima Minocha
!ro%ided. *t the sa"e ti"e it has to be ensured that ri3ht utilisation is "ade by the "ills of such 'echnolo3y 1!3radation 9und +hich should not be con%erted into a "ill o+ners +elfare fund. 1#. *s far as the "odernisation !attern is concerned7 it has to be obser%ed that in order to really ser%e its !ur!ose7 it has to be thorou3h in its sco!e and content and not confined to "erely re!lace"ent of a card or a blo+ roo" ha%e and a ra!ier and air 6et loo" there7 but should enco"!ass the entire !rocess fro" ra+ "aterial to end !roduct. It has been found that often the so called "odernisation effected by the textile "ills of the country has been selecti%e and !artial and to res!ond to the need of +hate%er is i""ediately +arranted and not a lon3 ter" and inte3rated !ro!osition that it should be in order to be fully !ur!oseful and useful7 instead of bein3 6ust na"esa$e or of a to$en descri!tion. 'herefore a thorou3h technolo3ical u!3radation has to ta$e !lace. 1&. Increased co"!etition in the international arena is leadin3 to !roduct s!ecialisation in 'extiles. Countries are tryin3 for niche "ar$ets to boost their textile ex!orts. 'here are lessons to be learnt fro" the ex!erience of the ast *sian econo"ies such as China7 ?on3 @on37 2e!ublic of @orea and 'ai+an Pro%ince of China7 +hich no+ do"inate +orld ex!orts in textiles and clothin3. 1). Indian Carn !roducers su!!lyin3 to do"estic "ar$et should also try to "o%e into ex!ort "ar$et. 'his can be done by !ro"otion the"sel%es to less (uality conscious "ar$et li$e 5an3ladesh and latter +ith ti"e 3radually i"!ro%e their (uality and "o%e to+ards (uality conscious "ar$et li$e South @orea an s!inners better returns for their !roduct. 1.. India is also needs to i"!ro%es its 2esearch and Ae%elo!"ent efforts as ri3ht no+ "a6ority of s!innin3 units rely on i"!orted "achineries fro" S+it8erland7 Ger"any7 1S*7 and Ea!an7. *lthou3h7 Indian "achinery !roducers li$e Ba$sh"i :achine ,or$s are !roducin3 "achineries +hich can 1 +hich althou3h re(uired hi3her standards of (uality but also in return 3i%e
By : Garima Minocha
be said to be of +orld standards co"!any li$e this are in "inority in India and "ost of the (uality conscious ex!orters rely on forei3n "achinery !roducts. 2/. 'extiles should be re"o%ed fro" the ssential Co""odities *ct as the cloth
and Carn ha%e been in the buyers "ar$et for the !ast se%eral years and their !roduction has been sho+in3 u!trend7 and thus in the liberalised econo"ic en%iron"ent of "ar$et econo"y and co"!etition controls on !roduction and distribution are in co"!atible.
By : Garima Minocha
CONCLUSION
'he scenario of the Indian textile industry durin3 the last about a decade and half is !resented in the !re%ious sections. It is obser%ed that India has se%eral fa%ourable factors and be able to co"!ete successfully in the international "ar$et for ex!andin3 this industry. * "a6or ad%anta3e is that of the abundant a%ailability of ra+ "aterials7 cotton7 as also hydrocarbons for the "anufacture of synthetics +ere too self sufficiency is better achie%ed. ,e ha%e a +ell established textile industry 44 in fact oldest in the +orld 44hi3h trade restrictions7 lo+er costs of !roduction the labour !roducti%ity is i"!ro%ed7 a "ar$etin3 net+or$ both at ho"e an abroad7 and +ith "odernisation of %arious sectors of this industry7 +hich +ould hel! brin3 do+n the costs of "anufacture and i"!ro%e"ent of the (uality7 and +ith !ro!er reor3anisation to achie%e econo"ies of scale 44all of +hich are i"!ortant for 3lobal co"!etiti%eness 44the !ros!ects and !erfor"ance of the textile sector can be 3reatly stren3thened. ,hat is re(uired is basically the +ill and the deter"ination to succeed and excel and the self4reliant and fiercely co"!etiti%e in s!irit. India has to re"e"ber and ta$e !ride in the fact that the Ea!anese co"e to this country in the last century to learn textile technolo3y fro" us and that our textiles !roduces used to be !ri8ed ite"s in the "ar$et in the ancient and "edie%al +orld in 2o"e and other then centres of ci%ilisation. 9or obtainin3 the necessary technolo3y for the u!3radation of (uality7 liberalisation has "ade it easy for us to ha%e arran3e"ents +ith the international stal+arts in the field by %arious $inds of arran3e"ents. It +ould also !ro%ide us access to the 3lobal "ar$et44+hether in yarn or fabrics or 3ar"ents or +hate%er. In fact7 such collaborations7 in confor"ity +ith the internationalsation of industry and trade 4 S+adeshi is a conce!t +hich no lon3er has any rele%ance in the "odern +orld4are the best solution for the textile industry0s %arious sectors7 to "eet the co"!etition. 'here ha%e been a lar3e nu"ber of such successful collaborations to the for"ation of +hich liberalisation has i"!arted a 3reater
By : Garima Minocha
i"!etus 44 that ha%e hel!ed the 3ro+th of enter!rises as also in the ad%ance"ent of technolo3y in the security of ne+ "ar$ets under buy bac$ or other arran3e"ents. India as +ell as the forei3n !arties can also both benefit by India bein3 "ade a sourcin3 !oint for !roducts to ta$e ad%anta3e of the lo+er costs of "anufacture in this country. It +ill !ro%ide the necessary in%est"ent and 3enerate e"!loy"ent. Countries li$e Indonesia and in%est"ents fro" Ea!an7 @orea etc. It need not be so called national industry but ne%ertheless it facilitated the !ro3ress of the textile industries in these countries. 'here is no reason +hy India should not also follo+ this !attern. 5ut it has to be seen that such collaborations are sustained and !erfor" satisfactorily and do not lead to discord as has ha!!ened in so"e cases +hich +ill 3i%e to a bad na"e to our country and inhibit the 3ro+th of such coo!eration. 5esides cotton and synthetics7 there are also the s"aller fibre sectors of +ool7 sil$ and 6ute. 'hese too "a$e their si3nificant contribution to the !roduction of textiles and their ex!orts. 'hey too ha%e to "oodiness and "a$e use of the liberalisation to ac(uire the necessary "achines for the u!3radation of their !roducts. India is far a+ay fro" achie%in3 self4sufficiency in +ool of the re(uired standards for the "anufacture of its +oollen !roducts7 the sa"e also bein3 the case +ith sil$. 'ill sericulture and +ool !roduction are really i"!ro%ed7 the i"!orts of he ra+ "aterial +ould a!!ear to be ine%itable and should be allo+ed freely. %en the 6ute sector7 +hich once u!on a ti"e used to be one of he country0s "a6or forei3n exchan3e earners7 can be "odernised and reor3anised and the ex!orts built u!7 ta$in3 ad%anta3e of the !reference abroad for the en%iron"entally friendly 3olden fibre.
By : Garima Minocha
BIBLIOGRAP!Y
1. *nnual 2e!ort of :inistry of 'extiles (1..#4.&)
Source : Ministry of Textiles
2. ?and 5oo$ of Statistics on Cotton 'extile Industry Published by IC:97 (2#th d).
Source : Indian Cotton Mills Federation
3. Indian 'extile :onitor7 :arch 1..&7 Aec. .#7 Se!. .#

Source : FICCI Library
4. 'extile 'rends7 Ean. .&

Source : FICCI Library
5. 'rade Ae%elo!"ent Ser%ices7 International 'rade Centre 'extiles F Clothin37 1..4

Source : UN Library
#. 1>IA-7 the cono"ic Intelli3ence 1nit India 4 Industry Ae%elo!"ent 2e%ie+

Source : UN Library
&. ,'- 4 'rends and statistics7 1..5

Source : UN Library
). *sian 'extile Eournal7 *!ril 1..&7 :arch G.&7 Aec. G.#

Source : CII Library
.. Central 5ureau of Statistics on Carns

Source : uro!ean Commission Library
1/. Panora"a 1..#

Source : uro!ean Commission Library
11. Pra3ati India (*!ril 4 :ay 1..#)7 Published by I'PSource : India Trade "romotion #r$anisation Library
12. 'extile Industry 2e%ie+ Published by 'extile ('ex!rocil7 5o"bay)

Source : "%& C'ambers of Commerce
x!ort Pro"otion Council
13. G-I cono"ic Sur%ey7 1..#4.&

Source : F#( Library
14. Internet 15. >e+s!a!ers 4 cono"ic 'i"es 4 'i"es of India 4 *sian *3e 4 5usiness Standard
By : Garima Minocha
SYNOPSIS
T%#i1: Study of Indian 'extile Industry Q *n International Pers!ecti%e 'his is an atte"!t to understand the Indian 'extile Industry on an international !latfor". *n inde!th study is carried on to understand the different faces of the industry under consideration. Issues li$e success7 failure7 liberalisation= 3lobalisation etc. has been ta$en into consideration. I ha%e tried to understand7 +hy other nation0s textile is better than ours. 'he syno!sis of +hich is as under. *lthou3h the Indian textile industry has not been "ar$eted by dyna"is" and had been noted for its lac$adaisical !erfor"ance and co"!lacency and had e%en been re3arded as an ailin3 one7 it has actually dis!layed enou3h self4reliance and %i3our to re3ister co""endable 3ro+th. ,hile the excessi%e re3ulations and controls had been a ne3ati%e factor7 the !rotection and s!ecial su!!ort it had lon3 en6oyed did ha%e a !ositi%e effect. So +hen it +as ex!osed to the se%ere international co"!etition by o!enin3 u! the i"!orts7 thou3h 3radually and in !hases7 by re"o%in3 or that it +ould relaxin3 the earlier restrictions7 there +ere +ides!read and understandable a!!rehensi%e not be able to hold its o+n a3ainst the $een and in "any res!ects the une(ual forei3n co"!etition. 5ut sur!risin3ly and to its credit7 it has not only "ana3ed to sur%i%e but e%en sho+ so"e %i3orous 3ro+th in "any of its sectors +hich beca"e "ore efficient under the i"!etus and co"!ulsions of 3lobal co"!etition. In fact7 so"e are of the %ie+ that had it been ex!osed to the $een +inds of international co"!etition earlier7 it could ha%e beco"e "ore self4reliant and achie%ed 3reater !ro3ress7 li$e its counter!arts in other de%elo!in3 countries7 and this "i3ht +ell ha%e been the case7 by the !ro3ress it has achie%ed in the recent !ast. *t any rate7 it has !ro%ed its ca!ability to +ithstand the co"!etition in the do"estic as +ell as international "ar$ets. 1nli$e before7 it has had to co"!ete +ith i"!orted 3oods7 the 3ates for +hich had been o!ened7 and it has had to contend +ith the co"!etition in the international "ar$ets for textiles7 +hich has been beco"in3
By : Garima Minocha
$eener. 'his +as not sur!risin3 as7 after all7 in a !rotected "ar$et there +as no need for it to exert "ore and ta$e ris$s +hen thin3s +ere co"fortable in a seller0s "ar$et. In this sense also the liberalisation !rocess can be said to ha%e had a salutary effect on the "anner in +hich the textile industry no+ o!erates. 'here has been a 3eneral realisation that the era of co"!lacency is o%er and co"!etition is a relentless reality that has to be faced. -f course7 e%erybody has not been able to effect the chan3es and ad6ust"ents in their "ind sets and "ethods of +or$in3 and the han3o%er of the !ast still !ersists and those +ho ha%e not "o%ed +ith the ti"es are !ayin3 their !enalty. 'he !rocess of +eedin3 out of the inefficient units is 3oin3 on and it is !art of the 3a"e of liberalisation and the "ar$et econo"y. 'he !ositi%e i"!act of liberalisation has been due both to the direct beneficial effect in ter"s of re"o%al of the re3ulations7 restrictions and controls7 as also the o%erall en%iron"ent +hich has been "ore conduci%e to 3ro+th. 9or exa"!le7 liberalisation has hel!ed the 3ro+th of the "iddle class7 +ith the lot of the +ea$er sections also ha%in3 i"!ro%ed7 resultin3 in the a!!reciable increase in the !er ca!ita consu"!tion of cloth. In turn this has hel!ed the 3ro+th of !roduction beyond that due to the increasin3 !o!ulation and the lar3er nu"ber of consu"ers. * 3reater sense of dyna"is" and readiness to acce!t ne+ challen3es has been 3enerated by the liberalisation in se%eral sectors of industry7 includin3 textiles. 'his accounts for the all round 3ro+th and i"!ro%e"ent in the !erfor"ance thou3h there ha%e been the una%oidable fluctuations in the fortunes due to %arious factors and the different and contrary effects on !articular sectors. )y:
GARIMA MINOC!A
2oll >o. H 1/.&2/3.2 *ll India :ana3e"ent *ssociation >odal CentreH AI:S7 ?nasbha%an
>e+ Aelhi
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