Textile Industry

 

Overview

With the highest handloom capacity, 24% of the world’s spindles and 8% of the world rotors, India is the second largest textile manufacturer across the globe, contributing 14% of the total textile fiber and yarn production. It also ranks second in production of silk and cotton. India accounts for over 63% of global market shares in textiles and garments. Textiles encompass natural fibers like cotton, jute, silk, wool, etc. and synthetic fibers like polyester, viscose, nylon and acrylic. It is a labor intensive industry which means that it is a major employment generator in the country directly employing 45 million people and 60 million people indirectly – In fact, it is the second largest employer following the agricultural industry. Its segments comprise the unorganized sector which consists of handloom, handicrafts, power looms and sericulture; and the organized sector which consists of spinning, apparel, garmenting and made – ups. Decentralized power looms take up most share of the textile industry. This industry is similar to the agricultural industry. The current size of the Indian textile industry is US$ 108 billion (US$ 68 billion in domestic markets and US$ 40 billion in exports), thus contributing 5% to the GDP of the country and 14% to over IIP (Index of Industrial Production). This industry has several branches and it ranges from the hand spun or hand-woven materials to the textile mill that requires more capital investment.

 

Major segments of the Indian textile industry segmentation are as shown below:

 

Buy Industry Analysis

 

Several international brands have given new shape to this industry. United Colors of Benetton tops the list international brands in Indian clothing segment. Zara, Marks & Spencer, Mango and Guess are popular brands. Although many international companies offer franchising options to India, some companies follow the COCO model. Among domestic players, various big and small players characterize this industry. Most participants belong to the domestic sector and a few private sector players such as FabIndia. Siyaram Silk Mills Ltd. specializes in silk fabrics whereas Arvind Mills is the world’s leading denim manufacturer with heavy exports. Raymond’s produces elite fabrics for men’s formals and occasion wear. Grasim Industries, Reliance Textiles and JCT Ltd. are major public sector players in the industry.

 

Outlook

Indian textiles constitute 11% of the total export basket of the country. India has reported a 17.6% growth on apparel exports during the period of April to September 2014, corresponding to the same period in its previous year. FDI worth US$ 1522.51 million entered the industry including dyes and prints from April 2000 to December 2014. Several alliances and new undertakings have taken place in this scenario to gain edge in a near saturating structure of the industry.

 

  • Reliance Industries Ltd. and China’s Shandong Ruyi Science and Technology Group plan to enter in to a Joint Venture to leverage RIL’s current textile business through Ruyi’s technology and global hold.

  • DuPont, RIL and Vipul Sarees have entered into an alliance to produce environmentally sustainable products through renewable fibers by the name ‘Sorona’.

  • Raymond has caught the attention of Indian customers through ‘Regio Italia’, an Italian fabric known for its finesse and luxurious material.

  • Snapdeal and India Post have entered in to a partnership to cater a large number of weavers and artisans in Varanasi to its website.

  • Welspun has expanded its operations by setting up a new spinning facility in Gujarat, which would be the largest one in India.

 

The Indian Government has supported various aspects of this industry through allowing 100% FDI under the automatic route and other export promotion policies like duty free entitlement for exporters of garments for import of certain value additions to 5% from the earlier 3%, which would increase RMG exports. The government has stepped forward to extend the 24/7 customs clearance facility at 14 seaports and 13 airports. This step would conclude faster clearance of import and export cargo.  A Scheme for promoting usage of geotechnical textiles in NER (North Eastern Region of India has been approved by the Ministry of Textiles with an agenda of US$ 69.12 million for 5 years starting 2014 – 15.

 

Future Potential

Thin profit margins where increasing exports are the solution for this concern is a characteristic feature of this industry. Government should also get credit as the Ministry of Textiles has entered in to an agreement with online retailer Flipkart to aid handloom weavers to sell their products online, this technology has to have a strong hold over the entire country. Yet, these efforts have only benefitted the unorganized sector. Increasing duties on branded items can be a solution to disrupt the existing value chain and enhance the domestic segments of this industry. Instead, projects like ‘Farm – Factory – Fabric – Fashion – Foreign’ policies set up in Gujarat if established across the country will strengthen the value chain of Indian textiles, as a whole. Skilled labor and lower cost of production is what Indian textile producers have banked upon, but with rising disposable incomes of Indian consumers, and more importantly their affinity towards larger purchases of apparel, Indian participants can tap this opportunity with higher end prices. Unfortunately, the increasing competition from foreign brands has set a difficult road ahead for the domestic textile industry.

 

What this report contains:

  • A detailed overview of the industry

  • Structure of the industry from both, domestic and international perspectives

  • Related industries that this industry has inter-dependencies with and their understanding

  • Detailed analysis of industry segments in terms of the value and depth of corresponding market

  • Analysis & insights about the elements and critical success factors of this industry using strategic models

  • A forecast on the state of this industry in 2020, predicting the growth and movement patterns for 2016 - 2020

  • Our professional analysis on the future of the industry based on strategic actions adopted by major industry participants

  • Quantitative estimates and forecasts of the growth prospects of the industry using revenue and financial forecasting models

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