20 July 2018

Textile growth of Indian conglomerates

Tesla Motors Batteries

Image Courtesy : under-coverdiva.blogspot.in

The Textile Industry occupies a vital place in the Indian economy and contributes substantially to its exports earnings. Textiles exports represent nearly 30% of the country’s total exports. It has a high weight age of over 20% in the National production. It provides direct employment to over 15 million persons in the mill, power-loom and handloom sectors. India is the world’s second largest producer of textiles after China. It is the world’s third largest producer of cotton-after China and the USA-and the second largest cotton consumer after China. The textile industry in India is one of the oldest manufacturing sectors in the country and is currently it’s largest.

Current Happenings in the Indian Textile Industry

Currently India has the second highest spindleage in the world after China. Aggregate production of cloth during 1996-97 was 34,265 million square meters, an increase of 9% over 1995-96. India’s contribution in world production of cotton textiles was about 12% a decade back, while currently it contributes to about 15% of world cotton textiles.

India has the second-largest yarn-spinning capacity in the world, which accounts for roughly 20% of the world’s spindle capacity. The Textile industry occupies an important place in the economy of the country because of its contribution to the industrial output, employment generation and foreign exchange earnings. The textile industry encompasses a range of industrial units, which use a wide variety of natural and synthetic fibres to produce fabrics. The textile industry can be broadly classified into two categories, the organized mill sector and the unorganized mill sector. Considering the significance and contribution of textile sector in national economy, initiative and efforts are being made to take urgent and adequate steps to attract investment and encourage wide spread development and growth in this sector.

Future Plans in Indian Textile Growth

According to Mr Shankersingh Vaghela, the Minister of Textiles, the textiles sector is expected to attract an investment of Rs 1,50,600 crores by the end of 11th Plan and it would generate employment opportunities for over 17 million workforce, of which 5.2 million will be skilled. And Mr. Vaghela also added that investment in the textile sector has picked up and it is estimated that the total investment in the textiles and clothing industry between 2003-07 was around Rs 72,542 crore. He says that the growth of industry has now accelerated to 9-10%/ annum and it is expected to rise to 16% in coming years. Textiles exports are expected to grow 22% and reached $55 billion by 2012 and further improve.

The textile policy of 1985 and the economic policy of 1991 accelerated the economic growth during 1990s. Textile sector growth has been led by the spinning and the man-made fibre industry. The number of cotton/ manmade fibre textile mills rose from 1035 in 87-88 to 1741 by December 1997 in a span of mere ten years, and the number of spinning mills number rose to 1461 in December 1997 from 752 in 87-88. Liberalization led to the installation of open-end rotors and setting up of Export Oriented Units. However, with regard to the Scheme for Integrated Textiles Parks (SITP) launched in 2005, Mr. Vaghela claimed that thirty Integrated Textiles Parks were going to be set up by 2008 with an investment of Rs 15,700 crore. These parks will generate an annual production of Rs 23,600 crore, and create half a million new jobs. The allocation for the scheme has been enhanced from Rs 189 crore in 2006-07 to Rs 425 crore in 2007-08. The Government of India has allowed 100% FDI in the sector through the automatic route.

Possible Future Trends

In order to make textile processing units more environment-friendly and globally competitive, the Cabinet Committee on Economic Affairs (CCEA) approved an Integrated Processing Development Scheme (IPDS) with an investment of Rs 500 crore. Under the Technology Upgradation Fund Scheme (TUFS), the textile industry of India will receive subsidy on the capital expenditure done on Hi-tech approved machinery. The industry is also expected to attract Rs 40,000 crore in the form of investments over the next six months. Government Resolution on Revised Restructured TUFS has been issued for operation of scheme in the 12th Five Year Plan (2012-17). The Government of India has launched The Integrated Skill Development Scheme (ISDS) as a pilot scheme in 2010 to cater to skilled manpower needs of the Textile and related sectors.

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