India’s Textile Engineering Industry in the Global Trade

By: P. Nayak and Shaikh Shakeel Ahamed

India is one of the leading textile producers and exporters of the world. The size of the domestic cloth
1
production during 2007-08 is pegged at Rs.2384 billion . The country has been a significant exporter of
textiles and textile products since time immemorial. Though the export share is declining over the years, the
aggregate export is increasing very rapidly. The year 2007-08 has seen an export earning of Rs.789 billion.
Besides export earnings the textile industry in India has been in the forefront in the employment generation.
The industry has several segments such as spinning, weaving and processing. The recent years have seen
significant growth in hosiery and readymade garment production. These sectors are considered employment
intensive ones. Unlike the countries like China and other advanced textile producing nations, the Indian
textile sector is largely unorganised and dispersed. Since unorganised and one of the earliest to be
established, the industry is suffering from technological obsolescence these sub-sectors of spinning,
weaving, processing, knitting or readymade garment making require appropriate technologically viable
machinery for production of yarn, fabric, or ready-made garments. The industry secures the machinery from
the country and also source from abroad.

Realising the contribution of the sector to the national economy, exports and employment generation,
government of India has taken several steps to boost the industrial growth. Some important steps like
Technology Upgradation Funds Scheme (TUFS), Scheme for Integrated Textile Parks (SITP), excise and
import duty liberalization of textiles and textile machinery are shots in the arm of the textile industry. These
schemes have not only provided much required fillip for igniting growth but also have leveraged the growth
of textile engineering industry which includes manufacture of complete machinery, accessories and parts.
Though the machinery industry is growing in a reasonable speed, some of the sector specific machines still
have not been able to match the quality and productivity standards of the world-class machines.

The main objective of the paper is to delineate the present status of the textile engineering industry in India
and then to compare its position vis-à-vis the global exports of textile machinery. Two sections are
exclusively devoted; the first on the textile engineering industry status and the second the position of the
industry in global trade.

I- Textile Engineering Industry: State of Play

Textile engineering deals with the application of scientific and engineering principles to the design and
control of all aspects of fiber, yarn, fabric and apparel products, processes and machinery. These include
natural and man-made materials, interaction of materials with machines, safety and health, energy
conservation, and waste and pollution control. The Report of the Expert Committee on Textile Policy
(Sathyam Committee, August 1999, Ministry of Textiles, Government of India) has observed that: “The
textile machinery industry exhibits a mosaic of multi-layered production capacity and technological capability
levels.” The textile engineering industry (hereafter referred as TEI) is a product of the post-independence
era. Over the last five decades, it has built up an annual capacity of about Rs 8048 crore including capacity
of Rs 1528 crore for components and accessories. The industry produces virtually the entire range of textile
machinery for cotton, blended and manmade fibre textiles.

The annual production of textile machinery in the world is about US$20 billion in 2004 (International Textile
Monitor, Vol. 24, 2004). The major share of global production is concentrated in the developed countries like
Germany, Switzerland, Italy, USA, Japan and the UK. The other producers are China, Taiwan and Korea. As
regards to the sector of machinery production, the spinning capacity (including both cotton and wool) around
the globe in 2005 is around 206 million spindles. Of this, about 135 million spindles are located in Asian
countries like China, India, Pakistan and Indonesia and rest are in Oceania, East Europe, Latin America,
Africa and other developing countries. Similarly, out of about 8.39 million open-end rotors, these countries
account for about 6 million. In the case of weaving, shuttle-looms in the world is around 4.3 million and
shuttle-less looms are only 0.88 million. The population of these looms is also distributed predominantly in
the southern hemisphere (Compendium of International Textile Statistics, 2008).

The level of technology and quality of Indian textile machinery has been improving steadily. In case of
spinning, India is at par with international technology levels. Though in weaving and processing India has a
long way to go, here too there has been a lot of improvement witnessed in the recent decade. Still the
performance of the Indian textile machinery industry is far from satisfactory. Competition from high tech
machinery of European and South-East Asian countries is a real challenge to the very existence of this
industry. As compared to Indian industry, the Chinese companies are enjoying cost advantages. China has
been attracting more international companies than India. A number of European textile machinery
manufacturers have set up bases in China and are catering to the domestic as well as export markets from
there. The Chinese were good at adapting and imitating the Europeans and started manufacturing in bulk
the textile machines they copied and sold them at very low prices. Even in India the European
manufacturers are expected to enter the domestic market on their own rather than through partnerships.
Nevertheless, there are very good opportunities for collaborations as well as for international companies to
set up bases in India particularly in weaving and processing.

The Textile Engineering Industry (TEI) census recently conducted by the Textiles Committee, Government of
India unfolds over 1446 units of which 598 units produce complete textile machines and about 848 units are
producing parts and accessories as well as equipments for testing and monitoring of fibres and textiles. It
produces textile machinery and accessories worth Rs 5753.44 crores with an investment of Rs 6,905.44
crores and employing 90972 personnel directly. Though a few items of textile machines and parts were
produced before independence, the actual production in an organised way had commenced in the late 50s
and gathered momentum in the following two decades with the emphasis given by the Government of India
through its Five Year plans for industrialization. Investments through foreign collaborations were at the peak
in the late 70s and beginning of 80s. There have been a large number of collaborations between the local
and global players to develop world-class machinery for the textile industry (See table at annex).

The TEI in India has grown in accordance with that of the textiles and clothing industry. During the initial
stage of the industry, TEI was producing machines mainly for the cotton textile sector. Subsequently as the
textile industry diversified the production line, TEI also taken up the production of machinery required by the
manmade fibre sector, the woollen sector and even the jute sector. Today, the entire range of equipments
required for forming lint and manmade fibres upto finished fabrics are produced in India. Side by side, the
ancillary and textile testing and monitoring equipment sectors too developed appreciably.

Units by Segments

Test G&P
Text M/c Parts 2.84% Others 3.18%
17.29% 1.66% Spin & All
Multiple 25.66%
Segments
1.38%
Hos & RMG
2.84%

Synth F & Y
8.23%
Proc & allie Weav & Alli
11.69% 25.24%

The machinery manufacturing operation takes place both in the organized and the unorganized sectors. In
the organised sector, in addition to the public limited companies, machinery manufacturing is done in
independent units, which have collaborative joint ventures with the foreign entities. In the decentralized
sector, there are small-scale industrial units as well as tiny units engaged in the production of accessories
pertaining to the textile machinery. In brief, the Indian textile engineering sector seems to offer the modern
technically advanced machinery for spinning, weaving and processing sector as well as simple machinery
required in ginning & pressing industry of the sector. The textile industry holds significant importance in the
economy of India and is segmented on the basis of the product it produces viz, fibre, yarn, fabric and
garments etc. Accordingly, the various segments of the textile industry are classified as: Ginning & Pressing,
Spinning, Weaving, Processing and Knitted/Readymade garments. The textile-engineering industry also
receives its name for the segment it produces the machines. For example, the machinery unit which
produces the ginning and pressing machines is classified in the ginning and pressing sector, while the unit
producing spinning machinery is classified in the spinning sector and so on. On the basis of the products
they produce, the TEI is categorized in ten categories viz; (i) Ginning & pressing machines, (ii) Spinning &
allied machines, (iii) Synthetic filament yarn machines, (iv) Weaving and allied machines, (v) Processing
machines, (vi) Hosiery/RMG machines, (vii) Textile testing equipments, (viii) Multiple segments (combination
of the above), (ix) Accessories and parts and (x) Others. Most of the above classifications are self
explanatory. The multiple segment of the industry unit produces combinations of the machines listed from (i)
to (vii) whereas others indicate machinery produced for common applications such as humidifiers, motors,
pumps, etc. The segment wise distribution of the units shows that more than 50 percent of the units are
engaged in the manufacture of either spinning and allied machinery (25.66%) or weaving machinery
(25.24%). The share of the units in other segments are ginning and pressing (3.18%), synthetic filament
yarn (8.23%), processing (11.69%), hosiery/RMG (2.84%), textile testing equipments (2.84) and
miscellaneous parts & accessories (17.29%). Majority of the TEI units are located in two states namely
Gujarat (48.55 %) and Tamil Nadu (31.12%).

State wise distribution

Gujarat 702
TN 450
Maharashtra 105
Punjab 85
Karnataka 42
West Bengal 14
Haryana 12
Daman 6 Major Clusters
AP 7 Ahmedabad 462
Uttar Pradesh 6 Coimbatore 423
Rajasthan 5
Surat 103
New Delhi 5
MP 4 Mumbai 64
Pondicherry 2 Ludhiana 51
Goa 1 Bangalore 38
Total 1141

The installed capacity of the TEI sector is Rs 8048.05 crore, of which only 71.49 percent of this capacity has
been utilised during 2006-07. There has been a significant growth in the production of textile machinery over
the past years. The TEI has increased the production to Rs 5753.44 crore during 2006-07 from Rs 4541.29
crore in 2005-06 recording an increase of 26.69 percent over the previous year. Major contributors to this
production are the complete machinery-manufacturing units (81%) and the remaining comes from
components and accessories.
Box I depicts the major contributors.

Box I
Major contributors
1 Lakshmi Machine Works, Coimbatore
2 Trumac Engineering Co. Pvt. Ltd., Ahmedabad
3 Kirloskar Toyoda Textile Machinery Pvt. Ltd., Bangalore
4 Rieter-LMW Machinery Ltd., Coimbatore
5 Himson Textile Engineering Industries Pvt. Ltd., Surat
6 Lakshmi Card Clothing Manufacturing Company Pvt. Ltd., Coimbatore
7 Luwa India Pvt Ltd., Bangalore
8 Arun Textile Engineers, Pvt. Ltd., Surat
9 Veejay Lakshmi Engineering Works Ltd., Coimbatore
10 Stenmech Engg. Works Pvt. Ltd., Surat
Note: Above 10 units collectively contribute around 50 percent to the total production.

Product type wise TEI units in India

300

250 242 236

219

200
(No. of units)

146
150 129
119

100
65
54 50
50 39 36 35
7 14 11 9 15 9
5 6
0
G&P M/cs

Spg & Allied M/cs

Wvg & allied M/cs

Multiple Segments

Others
Synthetic Fil Yar

Processing

Hosiery&RMG

Textile Machinery

Textile Testing
M/c

Parts

Complete Component/Accessories

Majority of the production comes from the states of Tamil Nadu and Gujarat; collectively contributing around
84 percent of the production worth Rs 4855.74 crore. Tamil Nadu being the largest producers of the yarn in
the country specializes in the production of spinning and allied machinery followed by textile testing
equipment whereas Gujarat is the leader in synthetic filament yarn machinery production followed by
weaving, spinning and processing machinery. Around 87 percent of the total production i.e., textile
machinery worth Rs 5010.50 crore is coming from the six clusters namely Ahmedabad, Bangalore,
Coimbatore, Ludhiana, Mumbai and Surat. These clusters are strategically located to serve the textile
industry and have the affiliation to produce the kind of machinery required by the industry. Ahmedabad is a
cluster of weaving and hence the TEI in this cluster has a specialty of producing weaving and allied
machinery followed by spinning machinery and Coimbatore, being the hub of spinning units, specializes in
the production of spinning machinery. Similarly, Ludhiana, which is one of the major knitting cluster in India,
the TEI in this centre concentrates on the production of hosiery machinery followed by processing
machinery; Mumbai specializes in the production of processing machinery and Surat, which is a centre of
synthetic sarees and fabrics, the TEI specializes in the production of the synthetic filament yarn machinery.
Further, it is observed that, though there are 59.61 percent of the units under SSI category, the production
from this category is only 32.12 percent and the rest comes from the Non SSI category. As far as the
consumption of the machineries is concerned, around 91 percent of the production is consumed within the
country and rest 9 percent is exported. The export basket is tilted in favour of spinning and allied machinery
in the tune of 72 percent.

The investments that have been made in the TEI units including complete, components and accessories
manufacturing units stands at Rs.6905.44 crore. A steady increase in the investment is observed for the
past years. The investment rose to 2681.99 crore during 2006-07 from Rs.1979.79 crore in 2005-06
recording a growth of 35.45 percent over the last year. Majority of the investment (82.76%) is made to
acquire the plant and machinery than on land and building and other investments. Out of the total
investment, 79.40 percent is made in the complete machinery-manufacturing units and the remaining in
component/accessories manufacturing units. Further, the TEI has geared up for modernization and
expansion of their current capacity to meet the local and global demand of the industry. Around 33 percent
of the TEI units in India are willing to modernize/upgrade their current capacities. Out of the total of 477 units
willing to modernize/upgrade, majority of these units are located in Tamil Nadu (244) followed by Gujarat
(160) and Maharashtra (26). Out of the 477 units, 77 units have reported that they will modernize by way of
automation of the entire processes, procuring Computerized Numeric Controlled (CNC) machinery, etc, 265
units desired to expand their production capacity, building & infrastructure, procuring new machines, etc and
76 units are going for product diversification. Apart from this, 27 units are willing to modernize as well as
expand their production capacity and 32 units want to diversify their production line as well as expand the
capacity. These units have envisaged investments worth Rs.640.81 crores towards the modernization/
expansion plans in the near future. The state wise investment plans shows that the highest investment is
being made in Tamil Nadu followed by Gujarat, Maharashtra, Rajasthan and Karnataka i.e., a total of
Rs.469.41 crores is being invested in the TEI sector in Tamil Nadu followed by Rs.101.70 crores in Gujarat,
Rs.24.59 crores in Maharashtra, Rs.21.30 crores in Rajasthan, Rs.11.21 crores in Karnataka and the rest
states collectively plan to invest Rs.12.60 crores in the TEI sector.

There are around 2.56 lakh personnel employed in the sector out of which around 35 percent are directly
employed and the rest is indirect employment. The total direct man power deployment in the TEI units
including complete and components/ accessories manufacturing is 90972. The complete machinery
manufacturing segment generates about 57 percent of the direct employment while the rest goes to
component and accessories manufacturing units and most of the direct employment are of technical
background (62%). The ratio of managerial to shop floor personnel in the complete and
component/accessories manufacturing units is 1:6 and 1:45 respectively.

II- Indian TEI in the global textile machinery trade

World trade in textile machinery suffered a sudden halt in 2008 with the decline amounting to as much as 18
percent of current prices compared to 2007(ACIMIT, 2009). These alarming figures for the sector are
attributed to the global economic and financial crisis which has spread through all segments of the real
economy. Major exporting countries of textile and clothing items have observed a significant drop in export
volumes, due to a demand slump from markets of Europe and the United States. These factors contributed
to the downsizing of production for many textile economies and further postpone the plans for investments
originally foreseen.

The primary textile machinery markets closed 2008 with a considerable downswing compared to 2007. In
China, imports fell by 27 percent, and equally striking downturns have been observed for India (-33%) and
Turkey (-47%). While three global markets produced import volumes exceeding a billion euros for 2007, in
2008 only China topped this threshold. Among the world’s top ten markets for textile machinery, an increase
in demand was recorded in Bangladesh, Brazil and Indonesia. The growth in imports (+42%) on the part of
Brazil over 2007 is especially relevant. Extending this analysis to a broader group of countries, a boost in
machinery imports was also recorded for Egypt and Russia.

All primary manufacturers of textile machinery suffered from a general downturn in demand, as documented
by data relating to global exports. Germany recorded a 21 percent drop compared to 2007 levels, with
similar decreases for Italy, Japan and Switzerland. However, Chinese exports were far less pronounced,
declining just 4 percent compared to 2007. On the contrary the Indian machinery industry which contributes
around 5 percent to the total machinery production of the world has observed growth in the exports. India
recorded a 37 percent rise in exports compared 2007 levels. This signals a positive message about the
growth and vibrancy of the sector which was a non-entity during last decades.

Major Exporting Countries of Textile Machinery

(million euros)
3315
Germany
4197

1569
Italy
1870

1549
Japan
1968
2008
1057 2007
China
1103

1018
Switzerland
1343

117
India
84
As far as Indian textile machinery sector is concerned, figures from 2006-07 indicate an increase in
production of 27 percent compared to the previous year, for an estimated value of 992 million euros. This
upturn has affected both foreign and domestic sales, with exports increasing from 84 million euros in 2006-
07 to 117 million for 2007-08. Indian exports recorded increases in just a handful of global markets in 2007-
08, African and South East Asian markets being the most prominent of these. On the domestic front, the
mixed situation confronting the entire textile/apparel industry has halted the demand for new machinery and
technology, which thus increased 32 percent on annual basis.

India’s Textile Machinery Industry (Million Euros)

2004 – 05 2005 – 06 2006 – 07 Change
05-06/06-
07
Production (a) 659.47 782.98 991.97 27%
Exports (b) 82.07 82.07 84.31 03%
Domestic deliveries (a-b) 577.40 700.91 907.66 30%
Imports (c) 612.41 1224.14 1626.55 33%
Domestic Consumption (a-
b+c) 1189.82 1925.05 2534.21 32%
Source: Computed from Census of Textile Engineering Industry in India, Textiles
Committee(2009) and
Official Indian Textile Statistics, 2007-08, Textile Commissioner,
Government of India

Conclusion

The textile industry is poised for a renewed growth after the end of the world financial crisis. Since most of
our textile exports were directed to the European Union and the United States, the textile exports were also
hit during the crisis. In the revival scenario, the industry is looking for investment on machinery for producing
quality textile products for export purposes. The recent demand of fashion textile garments from India by
retailers of the world has created newer opportunities for Indian exporters to set up new capacities for
production. Since the sourcing the most of the textile machinery today is done from the Europe which is
relatively costlier and requires specialised technicians to maintain the machinery, the Indian machineries
become a better substitute to those in addition to the comfort levels of the domestic manufacturers. In a way,
newer opportunities are knocking at the doors of textile engineering industry in terms of growing demand of
textile machinery in the domestic market and also exports to the neighbouring countries which are emerging
as significant textile producers. The moot point is whether TEI can gear up in terms of scaling up of capacity
and technology level to take advantage of the growing demand.

The recent trend of exports of textiles machinery manufactured in India shows a high growth rate of more
than 30 percent; even the export remained stable at the time of financial crisis. This provides enough
indication that the textile engineering industry not only ready to continue its effort to remain competitive in
the export markets but also is gearing up to increase its market share. A vibrant textile machinery industry
will not only support indigenous textile industry in its accelerated growth path but will also cater to the
requirement of the neighbouring countries. An image of ‘global player with local prices’ will catapult this
industry to the unprecedented heights in the days to come.

Notes

1. The figures are estimated from the production data on cloth as published in Official Indian Textile
Statistics, 2007 – 08, Office of the Textile Commissioner, Government of India, Mumbai

References

1. Census of Textile Engineering industry units in India, 2009, Textiles Committee, Government of India,
Mumbai

2. Compendium of International Textile Statistics, 2008, Office of the Textile Commissioner, Government of
India, Mumbai
 3. International Textile Monitor, Volume 24, 2004.

4. Official Indian Textile Statistics, 2007 – 08, Office of the Textile Commissioner, Government of India,
Mumbai

5. Report of the Expert Committee on Textile Policy, 1999, Ministry of Textiles, Government of India.

6. The world’s textile machinery industry (2009), ACIMIT, Italy

Annex I
Indian Company Foreign Collaborator
Spinning
Lakshmi Machine Works, Coimbatore Rieter, Switzerland
TRUMAC Engineering, Ahmedabad TRUETZSCHLER GmbH
Co., Germany
Suessen Asia, Pune Suessen, Germany
Zinser Textile Systems, Ahmedabad Zinser, Germany
Kirloskar Toyoda Textile Machinery, Toyota, Japan
Bangalore
Synthetic Filament Yarn
Himson Textile Engineering Industries, Ernest Scragg & Sons/ Rieter
Surat Sergg, UK
Himson Textile Engineering Industries, Teijin Seiki, Japan
Surat
Himson Textile Engineering Industries, Fadis, Italy
Surat
Weaving
Prashant Group, Ahmedabad Gamatex, Italy
Prashant Group, Ahmedabad West Point, USA
Lakshmi Automatic loom works, Coimbatore Ruti Machinery Works,
Switzerland
Lakshmi Automatic loom works, Coimbatore Cincla, Italy
Processing
ATE Stork, Holland
Dalal Engineering Obermaier, Germany
Reisky Maquinas Ltd, Brazil
Zimmer, Austria
Zimmer, USA
Dhall Enterprises
Cluett – Peabody, USA
Benninger, Switzerland
Goller, Germany
Menzel, Germany/USA
Dolfuss – Muller, France
Product
Entire range
& Blow room, cards, draw
frames
Ring frames
Roving frames
Ring frames
Draw Texturising
Draw Twisting
Precision cone winding
Sectional warping machine
Multi cylinder high speed
sizing machines
Automatic & Airjet looms
Shuttleless Rapier looms
Rotary printing machines &
screens
Dyeing Machines
Dye Padders & Calendar
Machines with hydraulic
deflection controlled rolls
Drier
Gas fired infrared driers,
Nickle Screens,
Sanforising machine
Cylinder drying ranges
Cylinder drying ranges
Singeing Machines
Sanforising machine

The authors are working as Director (Market Research) and Junior Investigator in Textiles Committee,
Government of India, Mumbai