NIFT MFM MFT MDES Textile Industry Questions

SWOT ANALYSIS OF TEXTILE INDUSTRY IN INDIA

Strengths:

1. Indian Textile Industry is an Independent & Self-Reliant industry.

1. Abundant Raw Material availability that helps industry to control costs and reduces the lead-time across the operation.
2. Availability of Low Cost and Skilled Manpower provides competitive advantage to industry.
3. Availability of large varieties of cotton fibre and has a fast growing synthetic fibre industry.
4. India has great advantage in Spinning Sector and has a presence in all process of operation and value chain. 
5. India is one of the largest exporters of Yarn in international market and contributes around 25% share of the global trade in Cotton Yarn.
6. The Apparel Industry is one of largest foreign revenue contributor and holds 12% of the country’s total export.
7. Industry has large and diversified segments that provide wide variety of products.
8. Growing Economy and Potential Domestic and International Market.
9. Industry has Manufacturing Flexibility that helps to increase the productivity.

Weaknesses:

1. Indian Textile Industry is highly Fragmented Industry.

1. Industry is highly dependent on Cotton.
2. Lower Productivity in various segments.
3. There is Declining in Mill Segment.
4. Lack of Technological Development that affect the productivity and other activities in whole value chain.
5. Infrastructural Bottlenecks and Efficiency such as, Transaction Time at Ports and transportation Time.
6. Unfavourable labour Laws.
7. Lack of Trade Membership, which restrict to tap other potential market.
8. Lacking to generate Economies of Scale.
9. Higher Indirect Taxes, Power and Interest Rates.

Opportunities:

1. Growth rate of Domestic Textile Industry is 6-8% per annum.

1. Large, Potential Domestic and International Market.
2. Product development and Diversification to cater global needs.
3. Elimination of Quota Restriction leads to greater Market Development.
4. Market is gradually shifting towards Branded Readymade Garment.
5. Increased Disposable Income and Purchasing Power of Indian Customer opens New Market Development.
6. Emerging Retail Industry and Malls provide huge opportunities for the Apparel, Handicraft and other segments of the industry.
7. Greater Investment and FDI opportunities are available.

Threats:

1. Competition from other developing countries, especially China.

1. Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world.
2. Elimination of Quota system will lead to fluctuations in Export Demand.
3. Threat for Traditional Market for Power loom and Handloom Products and forcing them for product diversification.
4. geographical Disadvantages.
5. International labour and Environmental Laws.
6. To balance the demand and supply.
7. To make balance between price and quality.

Textile Industry Concerns

1. Indian Textile Industry is highly fragmented Industry that is lead by several small-scale industries. Because of this, there is lack of Industry Leadership. These small companies do not have fiscal resources to invest in technological up-gradation and they are not able to generate economies of scale. This leads to inability to establish a world-class competitive player.
2. Despite many policies Industry is bound with historical regulations that are reason for Complex Industry Structure.
3. Though Industry has cheap and skilled manpower but they are less productive. 
4. Industry is unable to generate economies of scale, as a result, it is tough to balance the demand and supply equation.
5. There is lack of technological up-gradation in various steps of value chain that affect the quality, cost and distribution.
6. There are high Costs like, High Indirect Taxes, Power and Interest Rates.
7. Inadequate Research & Development.
8. There is less FDI in this industry that is hurdle to make industry more competitive on global basis.
9. Industry has unfavourable labour Laws.
10. India has disadvantage in terms of Geographic Locations. Because of this there is Global Logistic Disadvantage as shipping cost is higher.
11. There is uneven supply chain model and inbound freight traffic is low which affects cost of shipping.
12. India lacks in various trade memberships, which restrict to tap potential market.
13. Inappropriate energy supplies to rural and sub-urban areas.
14. Industry needs to compete on the basis of Price, Quality and Delivery for the different segments.

TEXTILE INDUSTRY KEY FACTS

1. Indian Textile Industry is one of the largest and oldest industry in India.
2. Indian Textile Industry is highly fragmented industry; at the same time it is an independent and self-reliant industry that has shown sustainable growth over the years.
3. Indian textile Industry is valued at US$ 36 Billion with exports of US$ 17 Billion in 2005-2006.
4. Indian Textile Industry is second largest industry in terms of providing vast employment opportunities and employs around 35 million people in country after agriculture sector..
5. The Indian Textile Industry plays vital role in economic development and contributes 14% to industrial production in the country. 
6. Textile Industry contributes around 4% of GDP, 9% of excise collections, 18% of employment in industrial sector, and has 16 % share in country’s export.
7. Industry has direct and strong linkage with rural and agriculture sector, therefore it is estimated that, one of every six households in country is directly or indirectly dependent on this industry.
8. Industry contributes around 25% share in the world trade of cotton yarn.
9. India is evolved as a major contributor in world’s cotton sector. Indian is the world’s third-largest producer of cotton and second-largest producer of cotton yarns and textiles.
10. India is the largest exporter of yarn in the international market and has a share of 25% in world cotton yarn export market.
11. India contributes for 12% of the world’s production of textile fibers and yarn.
12. Indian textile industry is second largest after China, in terms of spindle age, and has share of 23% of the world’s spindle capacity.
13. India has around 6% of global rotor capacity.
14. The country has the highest loom capacity, including handlooms, and has share of 61% in world loom age.
15. Including textiles and garments, 30% of India’s export comes from this sector.
16. Indian Textile Industry is one of the largest industry that provides high exports and foreign revenue.
17. Large and potential domestic & international market, large pool of skilled and cheap labor, well-established industry, promising export potential etc. are few strengths of Indian Textile Industry.
18. Highly Fragmented, High dependence on cotton sector, Lower productivity, Unfavourable Labor Laws are few drawbacks of the industry from which it has to overcome.

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