1INTRODUCTION ABOUT THE INDUSTRY

1.1.1 INDUSTRY HISTORY

The Indian textile industry is one of the largest in the world with a massive raw material
and textiles manufacturing bases. Our economy is largely dependent on the textile manufacturing
and trade in addition to other major industries. About27% of the foreign exchange earnings is on
account of export of textiles and clothing alone.
The textile and clothing sector contributes about 14% to the industrial production and 3
% to the gross domestic product of the country. Around 8 % of the total revenue excise collection
is contributed by the textile industry. So much so, the textile industry accounts for as large as 21
% of the total employment generated in the economy. Around 35 million people are directly
employed in the textile manufacturing activities. Indirect employment including the manpower
engaged in agricultural based raw material production like cotton and related trade and handling
could be stated to be around another 60 million.
This industry is poised to meet the increased global competition in the post 2005 trade
regime under WTO. The consequent effects of unleashing a flood of imported textiles into India
and also making the export markets far more competitive are being felt from now onwards. The
textile industry in India has a strong multi-fiber raw material production base vast pool of skilled
personnel, entrepreneurial talent, and good export potential and low import content. Protection
systems are flexible, dynamic and vibrant.

The Indian Textile Industry counts among the leading textile industries in the world.
Apart from providing the basic necessities of life, its role in the countrys economic growth is
significant. Indias textile industry contributes about 14 per cent to industrial production; 4 per
cent to the countrys gross domestic product (GDP); 17 per cent to its export earnings; and is a
source of direct employment for over 35 million people, which makes it the second largest
provider of employment after agriculture. Abundant raw materials, healthy foreign direct
investments (FDI) and a government willing to invest ensures a bright future for Indias textile
sector.

India has the advantage of abundant resources of raw materials. It is one of the largest
producers of cotton yarn in the world and there are good resources of fibres such as polyester,
silk, viscose, etc. The country is also home to a wide range of cotton fibre and has a rapidly
developing synthetic fibre industry. The most significant change in the Indian textile industry has
been the advent of man-made fibres (MMF). Indias innovative range of MMF textiles finds
presence in almost all the countries across the globe.

1.1.2 PRODUCTION OF TEXTILE

India is the second largest producer of fibre in the world and the major fibre produced is cotton.
Other fibres produced in India include silk, jute, wool, and man-made fibers. 60% of the Indian
textile Industry is cotton based.

Man Made Fibers: These includes manufacturing of clothes using fiber or filament
synthetic yarns. It is produced in the large power loom factories. They account for the largest
sector of the textile production in India.This sector has a share of 62% of the India's total
production and provides employment to about 4.8 million people.[7]

The Cotton Sector: It is the second most developed sector in the Indian Textile
industries. It provides employment to huge amount of people but its productions and
employment is seasonal depending upon the seasonal nature of the production.

The Handloom Sector: It is well developed and is mainly dependent on the SHGs for
their funds. Its market share is 13%.[7] of the total cloth produced in India.

The Woolen Sector: India is the 7th largest producer.[7] of the wool in the world. India
also produces 1.8% of the world's total wool.

The Jute Sector: The jute or the golden fiber in India is mainly produced in the Eastern
states of India like Assam and West Bengal. India is the largest producer of jute in the world.

The Textile Industry, being one of the important sectors of the Indian Economy, contributes more
than 4% to the Gross Domestic Product, accounts for 14% of the total industrial production,
employs 28% of countrys industrial work force and earns 25% of country's export revenues.
Over the years, India has emerged as a successful outsourcing centre for textiles and apparel.
Indian textile and apparel industry is gaining in strength with growing investments and
modernisation to meet the surging world-wide demand. With world class plants to manufacture
fibres and yarns, heavy investments, continuos innovations, new product mix and strategic
marketing , India is all set to emerge as a major BPO centre for textiles and apparels.

India is currently exporting textiles and apparel annually to the tune of US $ 12 billion with a
growth rate of around 8%. Out of the current exports, a considerable share is outsourced by
major retail chains. The exports are expected to touch US$ 20 billion in the next 3-4 years,
especially in view of the phasing our quota by the year 2004.
India currently exports more than 100 garment product categories along with its customary yarn
and fabrics. Many of the worlds leading brands like Banana Republic, Tommy Hilfiger, Gap, Liz
Claibome, Polo etc. are already sourcing goods from India. In view of the growing relationship
with major global brands, the post quota era would find India as a major global outsourcing
destination.
According to a study by Mc Kinsey, though China is expected to gain a bigger share in the global
textile and apparel trade, India could be the second largest supplier to EU and US market in the
post quota regime. Since the market share in the post quota regime would depend on the various
safeguard measures to be adopted by US and EU, it is expected that there would be some
safeguard against China, which would restrict the growing market share of China in the global
market.. According to the Mc kinsey study, China's apparel export would grow at 16.6% to reach
US$ 124 billion in 2008 (market share of 50%) if there would be no safeguard measures against
China. On the other hand some restrictions on Chinese supply of apparels would result in a

growth of only 7.3% per annum to take China's export to US$ 64 billion in 2008. The study also
indicates that the exports of major players of Hong Kong, Korea, Indonesia, Taiwan, Phillipines
and Thailand would decline, where as India's export of apparel will be growing by 8-10% per
year to touch 16 billion by 2008.

1.1.3 Synthetic Textiles Sector

The Synthetic textile sector in India is comparatively modern and has a high growth potential
which will help India emerge as a major outsourcing destination. From negligible exports in
1954, the exports of MMF textiles have expanded to a level of US$1.62 billion in 2002-03 with a
Compounded Annual Growth Rate (CAGR) of more than 22%. The export growth in 2002-03
compared to the previous year was to the tune of 30 percent and the MMF textile sector is the
only sector where the performance has surpassed the target fixed for the year by US$ 115
million. Along with maintaining the market share in the existing markets, Indian synthetic
textiles are increasingly reaching out to new markets.

Indian synthetic textile exports are

directed to more than 175 countries across the globe at present. The highly competitive and cost
conscious Middle East account for over 32 percent of our exports; showcasing the price
advantages of our products. The share of the highly quality conscious European Union is around
23 percent.
The Indian MMF textile sector has developed an export base over the years; and the share of
MMF textile exports in the total Indian textile export has also been increasing steadily over the
years. The share has gone up from 10.38% in 2000-01 to 11.46% in 2001-02 and further to
around 14% in 2002-03.
India's share in the world synthetic textile trade is also increasing steadily. The share of Indian
synthetic textiles in the global trade rose from 0.11% in 1971 to 1.12% in 1991 and further to
around 3% in 2002. This indicates the growing preference for Indian synthetic textile items in the
international markets. We are in a process of exploring new markets in Latin America and Africa
along with maintaining our share in the traditional markets like European Union and USA. At
this stage the council projects an annual growth of 15% for synthetic textiles and exports are
expected to touch US$ 2.5 billion in 2005-05 and US$ 4.3 billion in 2009-10.

India set to emerge as a major BPO Centre

The vibrant Indian textile industry with its unique advantages is expected to emerge as a major
supplier to the world. The favorable factors, which would spur Indias emergence as a BPO
centre for textiles, are as follows;
Government's policy of liberalisation has led to simplification of procedures and
formalities for the exporters. Government policies over the past couple of years have been
proactive and growth oriented.
A series of preferential trade Agreements have been signed with countries like Sri Lanka,
MERCOSUR, Singapore, South Africa, Bangladesh, Thailand and China etc. which will lead
to rapid growth in our exports. Since more such preferential agreements are on the cards in
the future, India is expected to gain importance as a major sourcing centre.
The diversified small lot production system prevalent in Indian textile industry can cope
better with the changes in fashion demands and short response time. These are the major
advantages in a constantly changing world trade scenario.
Indian textiles industry is witnessing increasing investments in the Jacquard Weaving
and Printing. This will enable the industry to provide high value added and quality products
to the world market. The industry is also moving forward in designing field to bring in
innovations.
Modernisation of textile plants through schemes like TUFs should help India emerge as a
major supplier. The interest rate subsidy has also been increased under TUFs for the weaving
and the processing sector, which ensures the production and export of quality value added
products.
Market Development Assistance (MDA) have been further stepped up for better
marketing in Focus LAC, Focus Africa, Focus CIS, Focus WANA and Focus ASEAN
regions.
The export of synthetic textiles by the major suppliers like Indonesia, Korea etc has
declined over the previous year. Korea's production capacity has declined by more than 30%
in the polyester filament sector in 2002 and in 2003 it is expected to decline further, which
has resulted in a decline in their exports of Polyester Filament fabrics by more than 15%.

Countries like Brazil has imposed an anti-dumping duty on the polyester filament fabrics
sourced from Taiwan and Korea. These have provided India an opportunity to expand its
synthetic fabrics export.
Growing exports of Made-up items improve the possibilities of more value addition and
the Indian textile industry is blessed with traditional skills and craftsmanship essential for
success in this sector. Thus unprecedented growth in made-up sector is expected in the years
to come.
Currently Indian exports of synthetic textiles to USA is growing at more than 90%
annually. It has also been observed that export growth has been truly impressive for major
MMF textile items, which were removed from the quota regime. This gives an indication
that when all the products would be integrated into WTO rules and regulations (49% of the
products to be integrated in Phase-IV on January 2005) then India's export to USA would
further increase with a higher market share.
Although India has a high potential in terms of high volume of production, superior quality and
lower cost of production to emerge as a BPO centre for textiles and apparels; India still lags in
some decisive factors like productivity, rate of absenteeism at work place, rejection level and
delay in shipments. As per a Mc Kinsey study, productivity of Indian exporters is only 35% of
the US level, where as the absenteeism rate of industrial workforce is 13% as against only 5% in
the rest of Asia. Similarly the rejection rate is 3.3%, while it is only 1.8% for rest of Asia; the
delayed shipments are 19% for India as against 9% for rest of Asia. Since there will be a good
demand from global retail chains

in sourcing textile and apparel from India, we need to

overcome such drawbacks to emerge as the leading destination for Textile BPO.

1.2 INTRODUCTION ABOUT THE COMPANY

COMPANYPROFILE
Aravind A trader sis one of the leading home textiles in karur, we export to the Spain,
Netherlands and the U.K. We have bagged our share in the international market which is marked
by the satisfied customers. Well connected with the agents, the company ably handles the
international logistics.
As a manufacturer and exporter of quality home textile products to the international market, we
stand committed to quality products, on-time delivery and continuous improvement in process.
With our contemporary infrastructure and well-groomed personnel, we have been able to
differentiate ourselves in the extremely competitive market of home textiles
Fabric Section : We have a huge space to store the fabrics received from weaving and the same
are checked thoroughly before sending them for conversion into made-up items.
Embroidery Brings our ideas/designs into beautiful products our in-house computer
embroidery facility enables to bring out our innovative designs on our products with creativity
and cost effective.
Sewing Our fabrics are converted into variety of made-ups with utmost care using skilled
workmen. We have able and experienced team to guide and lead the sewing section to make the
finished goods exactly matching the requirement of our clients

1.3.1 PRODUCTS MANUFACTURER AND EXPORTER:

Furnishing fabrics
Hotel linens
Hospital linens
Bed sheets
Pillow covers

Cushion covers
Curtains
Table mats
Table cloths
Kitchen set.

1.3.2 PRODUCTS:
Manufacturer and exporter of home textiles

Kitchen & culture

Table linen
Table cloths
Woven