Textile industry

1.1 Background
India Textile Industry is one of the leading textile industries in the world. Though was predominantly unorganized industry even a few years back, but the scenario started changing after the economic liberalization of Indian economy in 1991. The opening up of economy gave the much-needed thrust to the Indian textile industry, which has now successfully become one of the largest in the world.

India textile industry largely depends upon the textile manufacturing and export. It also plays a major role in the economy of the country.

India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the GDP of the country. India textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. India textile industry currently generates employment to more than 35 million people.

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Indian textile industry can be divided into several segments, some of which can be listed as below:
 Cotton Textiles
 Silk Textiles
 Woolen Textiles
 Readymade Garments
 Hand-crafted Textiles
 Jute and Coir

1.2

Current Scenario
The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a vital role through its contribution to industrial output, employment generation, and the export earnings of the country.

The sector contributes about 14 per cent to industrial production, 4 per cent to the gross domestic product (GDP), and 17 per cent to the country's export earnings.

It provides direct employment to over 35 million people. The textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation. India has the potential to increase its textile and apparel share in the world trade from the current level of 4.5 per cent to 8 per cent and reach US$ 80 billion by 2020.

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A brief report on Textile Industry in India

1.3

Export Scenario
The Indian textiles and clothing industry is one of the largest contributors to the country’s exports. The textile products continue to hold an important role in the Indian exports. The latest status of exports of textiles from the country is given in the Table below:-

Source: Foreign Trade Statistics of India (Principal Commodities & Countries). * as per latest figures available

1.4

Technical Textile Segment
Technical textiles are an important part of the textile industry. The Working Group for the Eleventh Five Year Plan has estimated the market size of technical textiles to increase from US$ 5.29 billion in 2006-07 to US$ 10.6 billion in 2011-12, without any regulatory framework and to US$ 15.16 billion with regulatory framework. The Scheme for Growth and Development of Technical Textiles aims to promote indigenous manufacture of technical textile to leverage global opportunities and cater to the domestic demand.

Further, the government is set to launch US$ 44.21 million mission for promotion of technical textiles, while the Finance Ministry has cleared setting up of four new research centers for the industry, which include products like mosquito and fishing nets, shoe laces and medical gloves. The global technical industry is estimated at US$ 127 billion and its size in India is pegged at US$ 11 billion.

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A brief report on Textile Industry in India

2. MAJOR PLAYERS IN TEXTILE INDUSTRY
2.1

Major Players in the industry
Company

Business areas

Welspun India Ltd
Vardhman Group
Alok Industries Ltd

Home textiles, bathrobes, terry towels
Yarn, fabric, sewing threads, acrylic fibre
Home textiles, woven and knitted apparel fabric,
garments and polyester yarn

Raymond Ltd

Worsted suiting, tailored clothing, denim, shirting,
woollen outerwear

Arvind Mills Ltd

Spinning, weaving, processing and garment
production (denims, shirting, khakis, knitwear)

Bombay Dyeing &
Manufacturing Company Ltd

Bed linen, towels, furnishings, fabricfor suits, shirts,
dresses and saris in cotton and polyester blends

Garden Silk Mills Ltd
Mafatlal Industries Ltd
Aditya Birla Nuvo, a
diversified conglomerate of
the Aditya Birla Group,
comprising three divisions —
Madura Garments, Jayashree
Textiles and Indian Rayon
ITC Lifestyle
Reliance Industries Ltd

Dyed and printed fabric
Shirting, poplins, bottomwear fabrics, voiles
Madura Garments —lifestyle market (Louis
Philippe, Van Heusen, Allen Solly, The Collective)
Jayashree Textiles —domestic linen and worsted
yarn
Indian Rayon —viscose filament yarn
Lifestyle market
Fabric, formal menswear

2.2

Profile of Major Players in India

2.2.1

Welspun India Ltd
Welspun India Limited (WIL) is the Flagship Company of Welspun Group with anenterprise value of U.S. $ 3 billion. WIL is ISO 9001:2000, 14001 and SA 8000certified company. WIL is a composite textile mill producing Cotton Yarn, TerryTowels and Rugs for international market. Welspun India Ltd. is one of the largestHome Textiles producers in Asia and amongst the top 4 producers of Terry Towelsin the world. WIL is located at village Morai in Valsad district, Gujarat State. WILannual sales turnover for year 2009-2010 was Rs. 681.881 crores. They have presence over 50 Countries, over 24,000 employees & 100,000+ shareholders, Welspun is one of India's fastest growing conglomerates.

2.2.2

Vardhman Group
Vardhman Group was established in 1965 and is a leading textile conglomerate in India having a turnover of $700 mn. They have over 24 manufacturing facilities in five states across India, the

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A brief report on Textile Industry in India

Group business portfolio includes Yarn, Greige and Processed Fabric, Sewing Thread, Acrylic Fibre and Alloy Steel.
Vardhman Group manufacturing facilities include over 8,00,000 spindles, 65 tons per day yarn and fibre dyeing, 900 shuttleless looms, 90 mn meters per annum processed fabric, 33 tons per day sewing thread, 18000 metric tons per annum acrylic fibre and 100,000 tons per annum special and alloy steel.

Products
Cotton Yarn
Special Blended Yarn
Organic Cotton
Yarn Core Spun Yarn
Fair Trade cotton
Yarn Melanges
Organic Fair Trade Cotton Yarn
Gassed Mercerised Yarn
Ellitwist Yarn
Modal Yarn
Vortex Yarn
Tencel Yarn
Slub Yarn
Viscose Yarn
Acrylic Yarn
Hand Knitting Yarn
Poly - Cotton Yarn
Speciality Yarn
Acrylic - Cotton Yarn

Alok Industries Ltd
Alok Industries Ltd. is an India-based textile manufacturing company and was established in 1986. Alok Industries is a private textile manufacturing
company and has manufacturing bases spread over 6 locations in Navi Mumbai in Vapi and Silvassa, situated in Maharashtra. Its business domain involves weaving, knitting, processing, home textiles and ready-made garments and its a diversified manufacturer of world-class home textiles, apparel fabrics, garments and polyester yarns. Its buyers include manufacturers, exporters, importers, retailers, and branded apparel manufacturers of the world. Further, it operates its embroidery business through its sister concern, GrabalAlokImpex Ltd. Today, Alok Industries is one of the largest private exporters of textiles in India. Its business operations are spread across all the continents. Moreover, the manufacturing lab has been certified for ISO 9001:2000 quality standards. Alok Industries became a public limited company in 1993 and their shares are listed in Bombay

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A brief report on Textile Industry in India

Stock Exchange and National Stock Exchange. They has posted a net turnover of USD 13 billion for the FY 2011as compared to USD 208 million turnover in 2004. 
2.2.4

Alok Industries product lines include Apparel Fabric (Woven) Apparel Fabric (Knitted)
Garments
Home Textiles
Polyester Yarn
Embroidered Fabric
Retailing

Raymond Ltd
Raymond was incorporated in 1925 and has over 60% market share in worsted suiting in India The company has a diverse product range of nearly 20,000 design and colours of suiting fabric. They export their products to over 55 countries including USA, Canada, Europe, Japan and the Middle East. The company has registered a turnover of USD 636.7 million for the FY 2011 as compared to USD 364 million turnover in 2006.

Theirsuiting’s are available in India in over 400 towns through 3,000 retailers as well as over 500 exclusive retail shops.
Raymond is among the largest integrated manufacturers of worsted fabrics in the world. Raymond Ltd. owns some of the most highly respected apparel brands in its portfolio like Raymond, Manzoni, Park Avenue, ColorPlus, Parx, Park Avenue, Be:, Zapp! andNotting Hill and GAS. Raymond manufactures and markets brands like KamaSutra condoms and even surgical gloves. The Raymond Group also has an expansive retail presence. Raymond's wide range of products and services are as follows:

Total textile solutions.
Fabrics (Worsted, Denim and Shirting).
Apparels (Tailored Clothing, Jeanswear and Dress Shirts).
Brands (Raymonds, Manzoni, Park Avenue, ColorPlus, Parx,Be:,Zapp!, Notting Hill and The Raymond Shop).
Woolen Outerwear.
Furnishings.

Retail (The Raymond Shop and Brand Store).
Engineering (Files, Cutting Wools, Hand Tools and Agri tools and Auto Components). Personal Care (Park Avenue and Kamasutra).
Prophylactic (Kamasutra and Surgical Gloves).
International Business.
Corporate Wear

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A brief report on Textile Industry in India

2.2.5

Bombay Dyeing
Bombay Dyeing is one of the leading companies in the textile business. In fact,India has made a position in the world textile sector holding the hands of Bombay Dyeing. The textile products of the company are exported to different nations all across the world like the United States, European
Union Countries, Australia and New Zealand.

2.3

Products of Bombay Dyeing:
Bombay Dyeing by using advanced technology has brought about a change in the textile business. The entire production is divided into two broad streams, weaving and spinning and winding. The production level on a daily basis is over 300,000 meters of fabrics. Some of the important products of the company that have already become significant in both, domestic and export markets are:

Cotton Sheeting
Polyester Cotton Sheeting
Poly Cotton Drills
Shoe Lining and Duck Fabrics
Satin Furnishings
Yarn dyed fabrics
Flannel Sheeting
Dobby and Fine Count made-ups
Downproof Shells and Comforters
Towels, Table Tops and Napkins

Bombay Dyeing at present is the largest exporter of sophisticated made-up
items and also of products made of cotton and poly cotton. Bombay Dyeing has created a sizable market in the production of a wide range of fabrics and ready-mades. This includes both formal and casual wear. The ready-made collection of the Bombay Dyeing has been changing its production pattern with the evolving fashion trends. The consumer section of Bombay Dyeing comprise of bed linen, towels, furnishings, suiting and shirting fabrics, and cotton and polyester blended dresses and saris.

Technology used in Bombay Dyeing:
The technology applied in the production process in Bombay Dyeing is of international standards. Regarding the weaving facilities, the technology used is from one of the most technologically advanced company of the world, Sulzer. The automations used in weaving, spinning and winding by Bombay Dyeing are like Sulzer Projectile Machines, SulzerAirjet Machines, SchlafhorstAutocore Rotors, Auto Corner Winding Spindles and Schweiter CA - 11 Spindles.

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A brief report on Textile Industry in India

3. GOVERNMENT INITIATIVES AND REGULATORY
FRAMEWORK
3.1

Government Initiatives
The Government of India has promoted a number of export promotion policies for the Textile sector in the Union Budget 2011-12 and the Foreign Trade Policy 2009-14. This also includes the various incentives under Focus Market
Scheme and Focus Product Scheme; broad basing the coverage of Market Linked Focus Product Scheme for textile products and extension of Market Linked Focus Product Scheme etc. to increase the Indian shares in the global trade of textiles and clothing. The various schemes and promotions by the Government of India are as follows It has allowed 100 per cent Foreign Direct Investment (FDI) in textiles under the automatic route.

3.1.1

Welfare Schemes: The Government has offered health insurance coverage and life insurance coverage to 161.10 million weavers and ancillary workers under the Handloom Weavers' Comprehensive Welfare Scheme, while 733,000 artisans were provided health coverage under the Rajiv Gandhi Shilpi Swasthya BimaYojna.

3.1.2

E-Marketing: The Central Cottage Industries Corporation of India (CCIC), and the Handicrafts and Handlooms Export Corporation of India (HHEC) have developed a number of e-marketing platforms to simplify marketing issues. Also, a number of marketing initiatives have been taken up to promote niche handloom and handicraft products with the help of 600 events all over the country.

3.1.3

Skill Development: As per the 12th Five Year Plan, the Integrated Skill Development Scheme aims to train over 2,675,000 people within the next 5 years (this would cover over 270,000 people during the first two years and the rest during the remaining three years). This scheme would cover all sub sectors of the textile sector such as Textiles and Apparel; Handicrafts; Handlooms; Jute; and Sericulture.

3.1.4

Credit Linkages: As per the Credit Guarantee program, over 25,000 Artisan Credit Cards have been supplied to artisans, and 16.50 million additional applications for issuing up credit cards have been forwarded to banks for further consideration with regards to the Credit Linkage scheme.

3.1.5

Financial package for waiver of overdues: The Government of India has announced a package of US$ 604.56 million to waive of overdue loans in the handloom sector. This also includes the waiver of overdue loans and interest till 31st March, 2010, for loans disbursed to handloom sector. This is expected to benefit at least 300,000 handloom weavers of the industry and 15,000 cooperative societies.

3.1.6

Textiles Parks: The Indian Government has given approval to 40 new Textiles Parks to be set up and this would be executed over a period of 36 months. The new Textiles Parks would leverage

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A brief report on Textile Industry in India

employment to 400,000 textiles workers. The product mix in these parks would include apparels and garments parks, hosiery parks, silk parks, processing parks, technical textiles including medical textiles, carpet and power loom parks.

3.2

Recent Developments
Along with the increasing export figures in the Indian Apparel sector in the country, Bangladesh is planning to set up two Special Economic Zones (SEZ) for attracting Indian companies, and duty free trade between the two countries. The two SEZs are intended to come up on 100-acre plots of land in Kishoreganj and Chattak, in Bangladesh.

Italian luxury major Canali has entered into a 51:49 Joint Venture with Genesis Luxury Fashion, which currently has distribution rights of Canali-branded products in India. The company will now sell Canali branded products in India exclusively.

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Details
Mahindra City is India’s first integrated business city, divided into business and lifestyle zones. The business zone provides plug-n-play working spaces. This zone comprises an SEZ (primarily for exporters) and domestic tariff area (DTA) for companies targeting the domestic market. The lifestyle zone offers residential units, schools, medical centres, malls, business hotels and recreation facilities. Keyindustrial units include Safari Exports, Venus Garments, Benchmark Clothings, International, Tormal Prints, J.R. Fashion and Ganga Export.

Integrated apparel supply chain city plans to house world-class apparel chain partners. 60 million litres of water per day is available. Has one of the most advanced effluent treatment systems in the region. BIAC has a dedicated 200 MW power
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A brief report on Textile Industry in India

In addition to the four functional SEZs, there are 13 in-principle approved, 19 formally approved and 12 notified SEZs in India
→From

January 2000 to June 2011, 482 Mergers and Acquisitions (M&A) deals have taken place.

→The top five M&A deals* are listed below

Top 5
deals
M&A scenario — details
Period : 1 January 2000 to 30 June 2011
Acquirer Name
Target Name
Krishnaa Glass Pvt Ltd

AAA United BV

BR Machine Tools Pvt Ltd

Group of investors

Spentex Industries Ltd

Soma Textiles & Indus
Ltd
Bombay Rayon
Fashions Ltd
Bombay Rayon
Fashions Ltd
Provogue (India)Ltd
Indo Rama Textiles
Ltd

Largest deal
(USD million)

Other government initiativesScheme for Integrated Textile Parks, 2005 The scheme was introduced to neutralize the weakness of fragmentation in the various subsegments of the textiles value chain and the unavailability of
quality infrastructure. The Eleventh Five Year Plan (2007–2012) outlay for the textiles and apparel sector has been fixed at US$ 2.91 billion (INR 140 billion), which is almost four times the outlay fixed during the Tenth Plan —US$ 0.74 billion (INR 35.8 billion).

3.3

Policy and regulatory framework
The Ministry of Textiles is responsible for policy formulation, planning, development, export promotions and trade regulation in the textile sector. This includes all natural and manmade Private & Confidential

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cellulosic fiber used to make textiles, clothing, and handicrafts.National Textile Policy, 2000 -the policy was introduced for the overall development of the textiles industry. The key areas of focus include

Technology Mission on Cotton (TMC), 2000—the scheme was introduced to address concerns around cotton production and processing sectors and to place the cotton economy on a sound footing. It was initially to be phased out at the end of the Tenth Five Year Plan (2002–07). However, the scheme’s Mini Mission was extended into the Eleventh Plan for two years to accomplish targets.

Jute Technology Mission (JTM), 2006, The objectives of this programmeinclude

Technological upgrades
Enhancement of productivity
Quality consciousness
Strengthening of raw material base
Product diversification

Increase in exports and innovative marketing strategies
Financing arrangements
Increasing employment opportunities
Integrated human resource development

Improving the yield and quality of jute fiber
Strengthening existing infrastructure for the development and supply of quality seeds Improving the quality of fiberthrough better methods of retting and extraction technologies Increasing the supply of quality raw material to the jute industry at reasonable prices and developing efficient market linkages for raw jute.

Modernizing, upgrading technology, improving productivity, diversifying and developing human resource for the jute industry
Developing and commercializing innovative technology for the diversified use of jute and allied fiber

Development of mega cluster schemes

Comprehensive Powerlooms Cluster Development Scheme (CPCDS)
To assist entrepreneurs to set up world-class units with modern infrastructure, latest technology andadequate training and human resource development (HRD) inputs along with appropriate market linkages.

Comprehensive Handloom Cluster Development Scheme (CHCDS)
Formulated to address the challenges faced by weavers within the cooperative sector and outside, due to poor infrastructure in some clusters.
Comprehensive Handicrafts Cluster Development Scheme (CHCDS)

The textile industry segments eligible to avail concessional loans for technology upgrade requirements include
Spinning, cotton ginning and pressing

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A brief report on Textile Industry in India

Silk reeling and twisting
Wool scouring and combing
Synthetic filament yarn texturising, crimping and twisting
Manufacturing of viscose filament yarn (VFY) or viscose staple fiber (VSF) Weaving or knitting including non-woven’s and technical textiles Garments, made-up manufacturing
Processing of fiber, yarn, fabric, garments and made-ups
Jute

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4. INVESTMENTS AND OPPORTUNTIES
4.1

Investment
The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted foreign direct investments (FDI) worth US$ 1.04 billion during April 2000 to November 2012.

Some of the major investments in Indian Textile Industry are: 

4.2

British clothing brand Superdry plans to open 20 stores in India over the next five years, as per Mr James Holder, Founder, Superdry
The Export Promotion Council for Handicrafts (EPCH) is setting up an international lace trade centre at Narsapuram in Andhra Pradesh (AP) with an outlay of Rs 15.33 crore (US$ 2.82 million) The Aditya Birla Group has signed an in-principle agreement to buy the assets of Ontariobased Terrace Bay Pulp Mill for Rs 605 crore (US$ 111.62 million). The acquisition would be carried out through AV Terrace Bay (Canada), a special purpose vehicle (SPV) in which two group companies, Grasim Industries and Thailand-based Thai Rayon Public, would hold stake

American apparel-maker, Tommy Hilfiger plans to add 500 stores in India over the next five years as part of their expansion spree. Currently, Tommy Hilfiger operates 58 franchisee outlets and over 60 shop-in-shops in other department stores Italian luxury apparel maker, CancliniTessile is tying up with Tirupur-based Emperor Textiles to stitch its shirts in India. The equal joint venture (JV) with Emperor Textiles will set up a separate manufacturing unit in Tirupur to manufacture Italian fabric for domestic consumption

Opportunities
The potential size of the Indian textiles industry is expected to reach US$ 220 billion by 2020.

4.2.1

Private sector participation in silk production
The Central Silk Board has set a target of 26,000 tonnes of raw silk production by 2011–12. It has also proposed to enlarge the area under mulberry silkworm food plants to 0.25 million hectares, which is expected to produce an additional 6,400 MT of mulberry raw silk and increase employment. To achieve these targets, alliances with the private sector, especially major agrobased industries in both pre-cocoon and post-cocoon segments, is being encouraged.

4.2.2

Technical textiles
The textiles industry complements the growth of several industries and institutions such as the defence forces, railways and government hospitals, which are the key institutional buyers of technical textiles. The market is likely to grow to USD31 billion by 2020, implying a CAGR of 10 per cent. This industry includes the production of flexible packaging material for industrial,

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A brief report on Textile Industry in India

4.2.3

agricultural and consumer goods. Among the other segments, protech, oekotech, sportech and geotech have significant growth potential.India’s technical textile industry is mainly dominated by unorganized players. However, it is an emerging area for investment with good growth opportunities.

Retail sector
With consumerism and disposable income on the incline, the retail sector has witnessed rapid growth in the past decade. Several international retailers are also focusing on India due to its emergence as a potential sourcing destination.

4.2.4

Centres of Excellence (CoE) for research and technical training The Government of India has proposed the establishment of several CoEs for training the workforce in the textiles sector. Four CoEs have been identified for four thrust segments of technical textiles —geotech, meditech, protech and agrotech. These CoEs, with national and international accreditation, are aimed at creating facilities for testing and evaluation and developing resource centres and facilities for training.

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