The history of development in World Textile industry was started in Britain as the spinning and weaving machines were

invented in that country.

High production of wool, cotton and silk over the world has boosted the industry in recent years. Though the industry was started in UK, still in 19th Century the textile production passed to Europe and North America after mechanization process in those areas. From time to time Japan, China and India took part in industrializing their economies and concentrated more in that sector.

Japan, India, Hong Kong and China became leading producers due to their cheap labour supply, which is an important factor for the industry. Global Textile Scenario According to statistics, the global textile market possesses a worth o f more than $400 billion presently. In a more globalize environment, the industry has faced high competition as well as opportunities. It is predicted that Global textile production will grow by 25 percent between 2002 and 2010 and Asian region will largely contribute in this regard. WTO In Textile Industry The (WTO) has taken so many steps for uplifting this sector. In the year 1995, WTO had renewed its MFA and adopted Agreement on Textiles and Clothing (ATC), which states that all quotas on textile and clothing will be removed among WTO member countries. However the level of exports in textiles from developing countries is increasing even if in the presence of high tariffs and quantitative restrictions by economically developed countries. Moreover the role of multifunctional textiles, eco -textiles, e-textiles and customized textiles are considered as the future of textile industry.

The textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports and is the second largest employment generator after agriculture. Textile Industry is providing one of the most basic needs of people and the holds importance; maintaining sustained growth for improving quality of life. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it is a major contribution to the country's economy. Its vast potential for creation of employment opportunities in the agricultural, industrial, organized and decentralized sectors & rural and urban areas, particularly for women and the disadvantaged is noteworthy. Although the development of textile sector was earlier taking place in terms of general policies, in recognition of the importance of this sector. Introduction The textile industry is undergoing a major reorientation towards non-clothing applications of textiles, known as technical textiles, which are growing roughly at twice rate of textiles for clothing applications and now account for more than half of total textile production. The processes involved in producing technical textiles require expensive equipments and skilled workers and are, for the moment, concentrated in developed countries. Technical textiles have many applications including bed sheets; filtration and abrasive materials; furniture and healthcare upholstery; thermal protection and bloodabsorbing materials; seatbelts; adhesive tape, and multiple other specialized products and applications. The Indian Textile industry has been undergoing a rapid transformation and is in the process of integrating with the world textile trade and industry. This change is being driven by the progressive dismantling of the MFA and the imperative of the recently signed General Agreement Trade & Tariff. In this bold, new scenario, India has to move beyond its role of being a mere quota satisfying country. History of Textile The history of textile is almost as old as that of human civilization and as time moves on the history of textile has further enriched itself. In the 6th and 7th century BC, the oldest recorded indication of using fiber comes with the invention of flax and wool fabric at the excavation of Swiss lake inhabitants. In India the culture of silk was introduced in 400AD, while spinning of cotton traces back to 3000BC. In China, the discovery and consequent development of sericulture and spin silk methods got initiated at 2640 BC while in Egypt the art of spinning linen and weaving developed in 3400 BC. The discovery of machines and their widespread application in processing natural fibers was a direct outcome of the industrial revolution of the 18th and 19th centuries. The discoveries of various synthetic fibers like nylon created a wider market for textile products and gradually led to the invention of new and improved sources of natural fiber. The development of transportation and communication facilities facilitated the path of transaction of localized skills and textile art among various countries. Textile History in India Indian textile enjoys a rich heritage and the origin of textiles in India traces back to the Indus valley Civilization where people used homespun cotton for weaving their clothes. Rig-Veda, the earliest of the

Veda contains the literary information about textiles and it refers to weaving. Ramayana and Mahabharata, the eminent Indian epics depict the existence of wide variety of fabrics in ancient India. These epics refer both to rich and stylized garment worn by the aristocrats and ordinary simple clothes worn by the common people. The contemporary Indian textile not only reflects the splendid past but also cater to the requirements of the modern times. Influences of changes shaping the industry We will touch upon some of the more significant changes that have and are shaping the Indian textile industry. Changes in Emphasis There has been a distinct and positive shift from quality to quality. Earlier Indian textiles were considered cheap and of low quality. The industry was at that time driven by large volumes, which were of paramount importance. The best quality was produced in Europe and Japan. Since then, India has come a long way, emerging as a manufacturer of high quality yarns and fabrics. The leading mills such as Raymonds, Read & Taylor, Aravind mills etc. Improved their quality standards prevailing into the world. Implementation of New Equipment The textile industry has also become a high technology. The textile industry has also become a high technology industry. Nobody earlier could have concerned that the industry would require top of the line technical skills. Present day textile machinery is fully computerized and needs totally new skills to effectively manage it. New Marketing Trend On the marketing side, there has been a total change, with almost all players in the industry extending their reach to international markets. The impact of these trends on the textile industry is profound. Increasingly any company cannot sustain itself only on local market demand or only the exports. One has to look at the global markets in totality. Competition This compulsion to access and compete in international markets has been perhaps one of the saving grace for the industry. Clearly the ability and necessity of meeting global competition head on, has forced the industry to upgrade its technology, product quality, cost structure and marketing skills. Truly, we have learnt more from the competitions than from ourselves.

Decentralized sectors Another visible change relates to the scale of operations. Earlier textile mills were generally reasonably large size becomes a non-constraining factor with the advent of power loom sector, which enabled small weavers to make and market their own fabrics in direct competition with large mills. Technocrats Another shift in the industry is regarding entrepreneurship. Technocrats have been able to become possible to have small size spinning, weaving and processing mills. All this was earlier the domain, solely of large businesses. Cost Consciousness The greater competitive pressure have highlighted the need to control cost of every type of whether it be energy, water or labor all of which were earlier taken for granted now every mill is highly cost conscious and industrial engineers keep detailed trace of every cost parameter including energy consumption including energy consumption, waste control, machine efficiency and productivity. No doubt, this will have to be an ongoing exercise. Since cost have to be ruthlessly and persistently brought down. Labor intensive industry The textile industry being labor intensive, is slowly migrating from high cost countries, such as the United states, Europe, Japan, Australia, Taiwan and Korea. All these countries were at one time leading textile manufacturers. But with the high labor cost, capacities in these countries are being diverted elsewhere. This is happening even as the developed economies make large investments in better machinery and automatism. Labor cost comparison (Europe & India) Labor Skilled workers Operating personnel Unskilled workers Operating hours per annum Europe Rs/Hour 750 625 500 6750 India Rs/Hour 20.00 12.50 6.25 48.75

Indian Textile Industry has some inherent strength

Tradition in Textiles and long operating experience Large and growing domestic market Strong raw material base Production across entire textile value chain Stable, low-risk economy, safe for business growth Easy availability of abundant raw materials like cotton, wool, silk, jute Widely prevalent social customs Variety of distinct local culture Constructive geographic and climatic conditions

Table showing the Indias Competitiveness with Other Country There is no denying India is competitive enough and will become even more competitive once its infrastructure issues are sorted out. China has probably already reached its peak and further improvements may not be as dramatic, henceforth Key countries / regions China India, Pakistan Mexico (NAFTA), Turkey Key positives Key negatives

Efficient, low cost, vertically Growth at the cost of profits integrated Vertically integrated, low Lacks economies of scale cost and infrastructure support Proximity to market, duty Lack China and Indias and quota free degree of competitiveness No other cost or locational advantage

ASEAN (Vietnam, Cheap labor Cambodia, Indonesia)

AGOA (African) countries, Quota and tariff free, cheap Lacks integration and China Bangladesh labor and Indias degree of competitiveness Hong Kong, Korea, Taiwan Trading hubs proximity to No cost advantage, China protected currently by quotas Non-quota barriers likely to US$ 400 bn trade loss likely prove irritant to imports ov Source - Industry, I-SEC Research

USA and EU

Indias world market share in Textile Industry

The world market share In spite of the Chinese dominance, India has a fair opportunity to grab a substantial stake in the projected garment market share. According to PHD Chamber of Commerce and Industry (PHDCCI), post-MFA, India's market share in the US is expected to go up to 15 per cent from the present 4 per cent. In the EU, the market share increase is expected to be 50 per cent from the current 6 per cent to 9 per cent. The world population is increasing at the rate of 1.8% per annum between 1980 to 2000 while it was 1.4% between 1960 to 1980. Per capita fibres consumption showed an increase of 0.9% between 1980 to 2000 while it was 1.8% between 1960 to 1980. World fibre needs will increase by 2.4% till 2001. The figure for 1960 to 1980 was 3.6%.

Particulars

UNIT

1960

1980

2000

1960-80 Trend +1.4 +1.8 +15.0

19802000 Trend +1.8 +0.9 +18.0

World population Per capita fibre usage Fibre need/ Population Growth rate in billion

(BIU) (KG) (MT) (AVG)

3.0 5.0 15.0

4.4 6.8 30.0

6.2 7.7 48.0

Consumption per year annual increase The above figure an attempt is made to analyse the trends in the world fibre type usage between 1960 to 2000. Natural fibre usage has dropped from 77% in 1960 to 44% in 2000 (projected) while man made non cellulose fibres show an increase from 5% in 1960 to 47% in 2000 (projected). This is a phenomenal increase and is due to mainly advent of polyester its multiple uses and its popularity. As further analysis the man made fibre production shows that in the man made fibre are polyester has increased its share from 42% in 1986 to 55% in 2000 (projected). Nylon, Rayon and Acrylic show a decreasing trend in the percentage. But is absolute terms they registered an increase. Indian Textiles targets to achieve by end of the 11th Five year Plan (2007-2012)

S.No

Broad External changes

Industry

specific

Market size of US$ 115 Billion o o Export target US$ 55 Billion Domestic market US$ 60 Billion

Indias market share in world textiles trade to grow from 3% to 8 % 12 Million additional jobs Investment Rs.150,600 Crore

Textiles Export Target (In Billions) Year ( April March) 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 Source: Textile India Progress Textile scenario Developing countries with both textile and clothing capacity may be able to prosper in the new competitive environment after the textile quota regime of quantitative import restrictions under the Multi-Fibre Arrangement (MFA) came to an end on 1st January, 2005 under the World Trade Organization (WTO) Agreement on Textiles and Clothing. As a result, the textile industry in developed countries will face intensified competition in both their export and domestic markets. However, the migration of textile capacity will be influenced by objective competitive factors and will be hampered by the presence of distorting domestic measures and weak domestic infrastructure in several developing and least developed countries. India must take adequate measures for capturing its market by promote the development in this sector Target 19.73 15.565 15.16 16.31 15.05 13.72 Achievement 19.62* 17.80 13.04 13.16 12.41 10.76

1. 2. 3. 4. 5. 6. 7. 8.

Demographic Trends Changing taste & preferences .i.e. Fashion Understanding hidden & fresh needs Invention of new fibres / textile materials motivated by market needs Growing policy discrimination Growing sensitive to Ecology Economic & Political shifts Dismantling of geographic national barriers

changes Markets & Marketing Technological Engineering Human resources Materials Textile fibres Metallurgical Systems

Challenges in the Textile sector Textile Related Rigid labor law Lack of processing infrastructure Low machinery manufacturing capacity Inverse ratio of Manmade Vs. Cotton Investment Gap Low FDI in Textile sector Non availability of trained manpower Conclusion "India is presently exporting six billion U.S. Dollars worth of garments, whereas with the WTO regime in place, we can increase the production and export of garments to 18 to 20 billion U.S. Dollars within the next five years. This will enable generation of employment in general and in rural areas in particular. By tripling the export of apparels, we can add more than 5 million direct jobs and 7 million indirect jobs in the allied sector, primarily in the cultivation of cotton. Concerted efforts are needed in cotton research, technology generation, transfer of technology, modernization and upgrading of ginning and pressing factories and an aggressive marketing strategy." Economic High cost of capital goods High transaction cost General High power cost Infrastructure Gaps High & Peak textile tariffs Brand India