MINI PROJECT

ON
“STUDY OF CHALLENGES AND ISSUES FACED BY
THE TEXTILE INDUSTRY”
in partial fulfilment of the requirement
for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF BUSINESS ADMINISTRATION
SESSION (2021-2023)

Submitted by:
Anshika Tripathi
Roll no: 2100480700024
< 2021-2023 >

Under the guidance of

Mr. Jagmohan Bhatia
Assistant Professor

DAYANAND ACADEMY OF MANAGEMENT STUDIES, KANPUR

AFFILATED TO
A P J ABDUL KALAM TECHNICAL UNIVERSITY, LUCKNOW
 PREFACE

A professional course in (Master of Business Administration) is incomplete unless

the theoretical knowledge acquired in the classroom is backed up by practical
exposure, as theories alone do not give perfection to any discipline. The gap between
theory and practice is bridged by gaining knowledge of the issues & challenge of the
industry, which has been an integral part of the syllabus.

This present Project report is an image of what I have done and observed during my
research in STUDY OF CHALLENGES AND ISSUES FACED BY THE
TEXTILE INDUSTRY.

This report is the result of the work done during the research period. I have tried my
level best to be as systematic as possible and to avoid any sort of biases.
 ACKNOWLEDGEMENT

Through this acknowledgement I express my sincere gratitude towards all those

people who helped me in this project, which has been a learning experience.

This space wouldn’t be enough to extend my warm gratitude towards my project

guide Mr. Jagmohan Bhatia, Assistant Professor, for her efforts in coordinating
with my work and guiding in right direction.

I escalate a heartfelt regards to our HOD Dr. Evanglin Singh for

giving me the essential hand in concluding this work.

It would be injustice to proceed without acknowledging those vital supports I

received from my able faculty members of the department, beloved classmates and
friends, without whom I would have been half done.

I also use this space to offer my sincere love to my parents and all others who had
been there, helping me walk through this work.

Anshika Tripathi
 DECLARATION

I undersigned, hereby declare that the project titled “STUDY OF CHALLENGES

AND ISSUES FACED BY TEXTILE INDUSTRY” submitted in partial
fulfilment for the award of Degree of Master of Business Administration at
Dayanand Academy of Management Studies, Kanpur is a bonafide record of work
done by me under the guidance of Mr. Jagmohan Bhatia, Assistant Professor.

This report has not previously formed the basis for the award of any degree, diploma,
or similar title of any University. Whatever information is furnished in this project
report is true to the best of my knowledge.

Anshika Tripathi
MBA First Year
Date: Roll No.: 2100480700024
 COLLEGE CERTIFICATE

This is to certify that the report titled “STUDY OF CHALLENGES AND ISSUES
FACED BY TEXTILE INDUSTRY” being submitted by Ms. Anshika Tripathi,
Roll No. 2100480700024 in partial fulfilment of the requirements for the award of
the Degree of Master of Business Administration, is a bonafide record of the project
work done by her, under the guidance & supervision of able faculty members of the
department.

We wish her all the best and a successful and bright future.

Dr. Evanglin Singh

HOD MBA
 Table Of Content

S. No Content Page no.

Chapter - 1 Introduction 1 - 41
Chapter - 2 Review Of 42 -
Literature 43

Chapter - 3 Research 44 - 48
Methodology

Chapter - 4 Findings 49
Chapter - 5 Conclusion & 50-51
Suggestions

ANNEXURE
 CHAPTER – 1

INTRODUCTION

1
 INTRODUCTION ABOUT THE TEXTILE
INDUSTRY

The Indian textiles and apparels industry plays a pivotal role in contributing to
employment generation, industrial output and export earnings. However, in the
speed of becoming the second largest producer of textiles and in the world, it has to
face several challenges for which it has to work hard not only retain position in the
global map but also to improve it.

This study focuses on the textile industry, analyses where there is a potential for the
industry to contribute to the dual objective of the Government’s "Make in India"
initiative and meet increasing domestic and export demand by overcoming the
challenges that the sector has to face. The study will focus upon the challenges and
to suggest the measures to overcome it.

The textile industry is one of the important industry which contributes to the
employment and growth of an economy. It is the second largest employment
provider industry after agriculture. The ‘Make in India’ initiative of the Government
of India which was launched in 2014, aimed at supporting the industry by
accelerating the investment, encouraging innovation, enhancing skill development
and protecting intellectual property rights. Apart from taking this initiative the
government also has to work upon the challenges that the industry is facing which
is obstructing the industry's export earnings, output and ultimately the growth of the
economy.

The textile industry is primarily concerned with the design, production and
distribution of yarn, cloth and clothing. The raw material may be natural, or
synthetic using products of the chemical industry.

2
The textile industry in India traditionally, after agriculture, is the only industry that
has generated huge employment for both skilled and unskilled labour. The textile
industry continues to be the second-largest employment generating sector in the
India. It offers direct employment to over 35 million in the country. According to
the Ministry of Textiles, the share of textiles in total exports during April–July 2010
was 11.04%. During 2009–2010, the Indian textile industry was pegged at US$55
billion, 64% of which services domestic demand.

In 2010, there were 2,500 textile weaving factories and 4,135 textile finishing
factories in all of India. According to AT Kearney’s ‘Retail Apparel Index’, India
was ranked as the fourth most promising market for apparel retailers in 2009. India
is the second largest producer of fibre in the world and the major fibre produced
is cotton. 60% of the Indian textile industry is cotton-based. Other fibres produced
in India include silk, jute, wool, and man-made fibres.

India is first in global jute production and shares 63% of the global textile and
garment market. India is second in global textile manufacturing and also second in
silk and cotton production. 100% FDI is allowed via automatic route in textile
sector. Reiter, Trutzschler, Saurer, Soktas, Zambiati, Bilsar, Monti, CMT, E-
land, Nisshinbo, Marks & Spencer, Zara, Promod, Benetton, and Levi’s are some of
the foreign textile companies invested or working in India. Between January and
July 2021, India exported textile products worth Rs 1.77 lakh crore, which is 52.6
per cent more than the same period last year.

History

The archaeological surveys and studies have indicated that the people of Harrapan
civilization were familiar with weaving and the spinning of cotton for as long as four
thousand years ago. Reference to weaving and spinning materials is found in
the Vedic Literature. There was textile trade in India during the early centuries.
Cotton fragments from Gujarat have been found in tombs at Fustat in Egypt,
indicating the existence of export of Indian textiles to Egypt during the medieval era.

3
Large quantities of north Indian silks were traded through the Silk Road in China to
the western countries. The Indian silks were often bartered for spices. During the
late 17th and 18th century there were large exports of Indian cotton to the western
countries to meet the need of the European industries during industrial revolution,
apart from the domestic requirement at the Indian Ordnance Factories.

A woman in Dhaka clad in fine Bengali muslin, 18th century.

Up until the 18th century, Mughal Empire was the most important center
of manufacturing in international trade. Up until 1750, India produced about 25% of
the world's industrial output. The largest manufacturing industry in Mughal
Empire (16th to 18th centuries) was textile manufacturing,
particularly cotton textile manufacturing, which included the production of piece
goods, calicos, and muslins, available unbleached and in a variety of colours. The
cotton textile industry was responsible for a large part of the empire's international
trade. Bengal had a 25% share of the global textile trade in the early 18th century.

4
Bengal cotton textiles were the most important manufactured goods in world trade
in the 18th century, consumed across the world from the Americas to Japan. The
most important center of cotton production was the Bengal Subah province,
particularly around its capital city of Dhaka. As Karl Marx noted in 1853, the textile
industry was a major component of economic income in the pre-colonial Indian
economy, writing that "The hand-loom and the spinning-wheel, producing their
regular myriads of spinners and weavers, were the pivots of the structure of that
society".

Bengal accounted for more than 50% of textiles and around 80% of silks imported
by the Dutch from Asia and marketed it to the world, Bengali silk and cotton textiles
were exported in large quantities to Europe, Asia, and Japan, and Bengali
muslin textiles from Dhaka were sold in Central Asia, where they were known as
"daka" textiles. Indian textiles dominated the Indian Ocean trade for centuries, were
sold in the Atlantic Ocean trade, and had a 38% share of the West African trade in
the early 18th century, while Bengal calicos were major force in Europe, and Bengal
textiles accounted for 30% of total British trade with Southern Europe in the early
18th century.

In early modern Europe, there was significant demand for textiles from the Mughal
Empire, including cotton textiles and silk products. European fashion, for example,
became increasingly dependent on textiles and silks imported from The Mughal
Empire. In the late 17th and early 18th centuries, The Mughal Empire accounted for
95% of British imports from Asia, conducted through the auspices of the East India
Company (EIC).

After the abolition of slavery in British Empire, manufactures in Britain started to

look for alternative sources of cheap cotton, eventually settling on the East India
Company's possession in India. The EIC convinced many farmers to switch from
subsistence farming to producing and exporting huge amounts of cotton, after a long
period of government protectionism imposed over the British textile industry.

5
 Eventually, through the technical and marketing advances made possible by
colonisation, the traditional method of artisan textile production declined
significantly, and replaced with large scale factory production.

Textile artists demonstrate double ikat Patola weaving at the 2002 Smithsonian
Folklife Festival

A map of Indian handlooms

6
Cotton

In the early years, the cotton textile industry was concentrated in the cotton growing
belt of Rajasthan, Maharashtra and Gujarat. Availability of raw materials, market,
transport, labour, moist climate and other factors contributed to localisation. In the
early twentieth century, this industry played a huge role in Bombay's economy but
soon declined after independence.

While spinning continues to be centralised in Maharashtra, Gujarat and Tamil Nadu,

weaving is highly decentralised. As of 30 November 2011, there are 1,946
cotton textile mills in India, of which about 80% are in the private sector and the rest
in the public and cooperative sector. Apart from these, there are several thousand
small factories with three to ten looms.there is a committee established in India under
'textile committee act 1963'. this commmitte sets the quality standards for textiles
manufactured for sale in the internal market as well as for export.

India exports yarn to Japan, United States, United Kingdom, Russia, France, Nepal,
Singapore, Sri Lanka and other countries. India has the second-largest installed
capacity of spindles in the world, with 43.13 million spindles (30 March 2011) after
China. Although India has a large share in world trade of cotton yarn, its trade in
garments is only 4% of the world's total.

Jute

India is the largest producer of raw jute and jute goods and the third largest exporter
after Bangladesh. There were about 80 jute mills in India in 2010–11, most of which
are located in West Bengal , mainly along the banks of the Hooghly River, in a
narrow belt (98 km long and 3 km wide).

In 2010-2011 the jute industry was supporting 0.37 million workers directly and
another 400,000 small and marginal farmers who were engaged in the cultivation of
jute.

7
Challenges faced by the industry include stiff competition in the international market
from synthetic substitutes and from other countries such
as Bangladesh , Brazil , Philippines , Egypt and Thailand. However, the internal
demand has been on the rise due to Government policy of mandatory use of jute
packaging. To stimulate demand, the products need to be diversified. In 2005, the
National Jute Policy, was formulated with the objective of improving quality,
increasing productivity and enhancing the yield of the crop.

The main markets for jute are the United States, Canada, Russia, United
Kingdom and Australia.

Ministry of Textile and Industry

In 2000, the Government of India passed the National Textile Policy. The major
functions of the Ministry of Textiles are formulating policy and coordination of
man-made fiber, cotton, jute, silk, wool industries, decentralization of power loom
sector, promotion of exports, planning & economic analysis, finance and promoting
use of information technology.

The Ministry of Textiles is currently led by Piyush Goyal . Darshanaben Jardosh is

currently Minister of State . The advisory boards for the ministry include All India
Handlooms Board, All India Handicrafts Board, All India Power looms Board,
Advisory Committee under Handlooms Reservation of Articles for Production and
Co-ordination Council of Textiles Research Association. There are several public
sector units and textile research associations across the country.

India's textiles sector is one of the oldest industries in the Indian economy, dating
back to several centuries.
The industry is extremely varied, with hand-spun and hand-woven textiles sectors at
one end of the spectrum, with the capital-intensive sophisticated mills sector on the
other end. The decentralised power looms/ hosiery and knitting sector forms the

8
largest component in the textiles sector. The close linkage of textiles industry to
agriculture (for raw materials such as cotton) and the ancient culture and traditions
of the country in terms of textiles makes it unique in comparison to other industries
in the country. India's textiles industry has a capacity to produce a wide variety of
products suitable for different market segments, both within India and across the
world .

MARKET SIZE

India's textiles industry has around 4.5 crore employed workers including 35.22 lakh
handloom workers across the country. Exports of textiles (RMG of all textiles, cotton
yarns/fabs/made-ups/handloom products, man-made yarns/fabs/made-ups,
handicrafts excluding handmade carpets, carpets and jute mfg. including floor
coverings) stood at US$ 29.8 billion between April-December 2021.

The Indian textiles market is expected to be worth more than US$ 209 billion by
2029.

9
India is the world's largest producer of cotton. Production stood at 360.13 lakh bales
for the crop year October 2021-September 2022. Domestic consumption for the
2021-22 crop year is estimated to be at 335 lakh bales.

Production of fibre in India reached 2.40 MT in FY21 (till January 2021), while that
for yarn, the production stood at 4,762 million kgs during same period.
India's home textile exports grew at a healthy rate of 9% in FY21 despite the
pandemic. In the year 2020-21, 1.13 million tonnes of cotton yarn were exported
from India.

INVESTMENT

The textiles sector has witnessed a spurt in investment during the last five years. The
industry (including dyed and printed) attracted Foreign Direct Investment (FDI)
worth US$ 3.93 billion from April 2000-December 2021.

In November 2021, Federico Salas, the Mexican Ambassador to India, visited the
Khadi India Pavilion at the India International Trade Fair 2021 and suggested that
India and Mexico should come together to promote Khadi globally.

10
Companies in home textile are using technology to optimise the value chain. For
example, in October 2021, Welspun India introduced Wel-Trak 2.0—an upgraded,
patented end-to-end traceability technology—to track textile raw materials
throughout the supply chain.

Home textile companies in India are also leveraging strategic partnerships to

strengthen their business operations and foothold in the country.

In October 2021, Welspun India collaborated with DuPont Biomaterials to introduce

a home textile range and strengthen the company's sustainable textiles business.
In May 2021, Indo Count Industries Ltd. (ICIL), announced an investment of Rs.
200 crore (US$ 26.9 million) to expand its production capacity.

GOVERNMENT INITIATIVES

Indian government has come up with several export promotion policies for the
textiles sector. It has also allowed 100% FDI in the sector under the automatic route.
The Rs. 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major
booster for the textile manufacturers. The scheme proposes to incentivise MMF
(man-made fibre) apparel, MMF fabrics and 10 segments of technical textiles
products.

Other Initiatives taken by Government of India are:

• In March 2022, the Bihar government submitted a proposal to the Union

Textiles Ministry to set up a mega hub under the PM Mitra Mega Textile Park.

• In March 2022, Tamil Nadu Chief Minister Mr. MK Stalin announced that the
State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) will set
up a mega textile park in the Virudhunagar district.

11
• Under the Union Budget 2022-23, the total allocation for the textile sector was
Rs. 12,382 crore (US$ 1.62 billion). Out of this, Rs.133.83 crore (US$ 17.5
million) is for Textile Cluster Development Scheme, Rs. 100 crore (US$
13.07 million) for National Technical Textiles Mission, and Rs. 15 crore (US$
1.96 million) each for PM Mega Integrated Textile Region and Apparel parks
scheme and the Production Linked Incentive Scheme.

• For the export of handloom products globally, Handloom Export Promotion

Council (HEPC) is participating in various international fairs/events with
handloom exporters/weavers to sell their handloom products in the
international markets under NHDP.

• The Ministry of Textiles has also been implementing Handloom Marketing

Assistance (HMA), a component of the National Handloom Development
Programme (NHDP), all across India. HMA provides a marketing platform to
the handloom weavers/agencies to sell their products directly to the
consumers and develop and promote the marketing channel through
organizing expos/events in domestic as well as export markets.

• In November 2021, Union Minister of Textiles, Commerce and Industry,

Consumer Affairs & Food and Public Distribution, Mr. Piyush Goyal, stated
the desire to target a 3-5x time increase in the export of technical textiles worth
US$ 10 billion over the next three years.

• The Indian government has notified uniform goods and services tax rate at
12% on man-made fabrics (MMF), MMF yarns, MMF fabrics and apparel,
which came into effect from January 1, 2022.

• Union Minister of Textiles, Commerce and Industry, Consumer Affairs &

Food and Public Distribution, Mr. Piyush Goyal announced a mega handloom
cluster in Manipur and a handloom and handicraft village at Moirang in
Bishnupur. The mega cluster will be set up at an estimated cost of Rs. 30 crore

12
 (US$ 4.03 million) under the National Handloom Development Programme
(NHDP).

• In October 2021, Union Minister for Commerce and Industry, Textiles,

Consumer Affairs, Food & Public Distribution, Mr. Piyush Goyal, announced
the creation of 100 textile machinery champions in the country and to promote
it in the global market. Through this, the government aims to make India a
global player in textiles machinery.

• In October 2021, the Ministry of Textiles approved continuation of the

comprehensive handicrafts cluster development scheme with a total outlay of
Rs. 160 crore (US$ 21.39 million). Through this scheme, the government aims
to support domestic SMEs and local artisans.

• In October 2021, the government introduced SAMARTH training at 75

training centers across the country, to accelerate the scheme's coverage among
artisans.

• The government allocated funds worth Rs. 17,822 crore (US$ 2.38 billion)
between FY16 and FY22 for the 'Amended Technology Up-gradation Fund
Scheme' (A-TUFS), to boost the Indian textile industry and enable ease of
doing business.

• Techtextil India, a trade fair focused on technical textiles, nonwovens and

composites was held from 25th to 27th November 2021 in Mumbai. Tamil
Nadu government signed up for Techtextil India 2021 to strengthen
indigenous textile production and attract textile investments into the State.
The State government promoted technical textile policies through both
physical and virtual segments of the hybrid fair organised by Messe Frankfurt
Trade Fairs India.

13
• In August 2021, Minister of State (MoS), Ministry of Petroleum & Natural
Gas and Labour & Employment, Mr. Rameswar Teli launched ONGC-
supported Assam handloom project 'Ujjwal Abahan' through the virtual
platform. The project will support and train >100 artisans of Bhatiapar of
Sivasagar, Assam in Hathkharga handicraft.

• In August 2021, Flipkart and Himachal Pradesh State Handicrafts and

Handloom Corporation Ltd. (HPSHHCL) signed a memorandum of
understanding (MoU) to help the state's master craftsmen, weavers and
artisans showcase their hallmark products on e-commerce platforms.

• In August 2021, Union Minister of Textiles, Commerce and Industry,

Consumer Affairs & Food and Public Distribution, Mr. Piyush Goyal said that
steps needed to be taken to boost production capacities of handloom sector
from the existing Rs. 60,000 crore (US$ 8.06 billion) to 125,000 crore (US$
16.80 billion) in the next three years.

He added that target must be set to increase exports of handloom items from
existing Rs. 2,500 crore (US$ 335.92 million) to Rs. 10,000 crore (US$ 1.34
billion). He also announced that a committee would be constituted consisting
of all weavers, trainer equipment makers, marketing experts and other stake
holders to recommend ways and means to achieve these objectives and
enhance overall progress of the handloom sector.

• In July 2021, the government extended the Rebate of State and Central Taxes
and Levies (RoSCTL) scheme for exports of apparel/garments and made ups
until March 2021. This will help boost exports and enhance competitiveness
in the labour-intensive textiles sector.

• To support the handloom weavers/weaver entrepreneurs, the Weaver

MUDRA Scheme was launched to provide margin money assistance at 20%
of the loan amount subject to a maximum of Rs. 10,000 (US$ 134.22) per

14
 weaver. The loan is provided at an interest rate of 6% with credit guarantee of
three years.

• Gorakhpur is on track to become a major garment manufacturing centre,

boosting the economy in eastern Uttar Pradesh. The Gorakhpur Industrial
Development Authority (GIDA) will provide four acres of land for
construction of a flattened factory and will enable access to entrepreneurs.

• In March 2021, The Ministry of Textiles favoured limited deal for the India-
UK free trade agreement that could boost the garments sector.

o In 2020-21, the UK is India's fourteenth largest trading partner,

accounting for US$ 8.7 billion in exports and US$ 6.7 billion in
imports.
o Under the proposed trade agreement, the Textile Ministry expects
more market access for the Indian textiles and clothing sector in order
to achieve its full potential.

• In March 2021, under the ongoing sub-mission on agroforestry (SMAF)

scheme, the Ministry of Agriculture and Farmers Welfare signed a
memorandum of understanding (MoU) with the Central Silk Board, under
the Ministry of Textiles, on a convergence model to implement agroforestry
in the silk sector.

• Effective 1 January 2021, to boost exports, the government has extended the
benefit of the Scheme for Remission of Duties and Taxes on Exported
Products (RoDTEP) to all exported goods

• Defence Research and Development Organisation (DRDO) is helping the

Indian textile industry to produce yarns and eliminate dependence on import
of Chinese and other foreign clothing for military uniforms. Indian defence
sector has expressed support towards the Indian technical textile sector.

15
 • In March 2021, while addressing the 9th edition of TECHNOTEX 2021
organized by FICCI, General Bipin Rawat, Chief of Defence Staff
appreciated the innovations in Indian technical textiles and stated that the
armed forces will rather reduce imports and instead procure technical
textiles from Indian industries as a part of the Atmanirbhar Bharat initiative.

ACHIEVEMENTS

Following are the achievements of the Government in the past four years:

• In June 2021, KVIC recorded a 7.71% growth in gross annual turnover to

Rs. 95,741.74 crore (US$ 12.85 billion) from Rs. 88,887 crore (US$ 11.93
billion) in FY20.

• In CY2020, Cotton Corporation of India made a record procurement of ~

151 lakh bales under MSP operations, which is ~ 290% higher than 38.43
lakh bales procured during the corresponding period last year.

• Under the Scheme for Integrated Textile Parks (SITP), 59 textile parks were
sanctioned, out of which, 22 have been completed.

• Employment increased to 45 million in FY19 from 8.03 in FY15.

• Sangam India Ltd, one of the foremost producers in PV dyed yarn, cotton
and OE yarn and also ready to stitch fabric, has installed two solar power
plants of 5 MW that, on average, helps them to bring down their carbon
footprint by at least 20% per annum. SIL also plans to increase the use of
recycled fibre, leading to lesser consumption of plastic waste by using it as a
raw material.

ROAD AHEAD

India is working on major initiatives, to boost its technical textile industry. Owing
to the pandemic, the demand for technical textiles in the form of PPE suits and

16
equipment is on rise. The government is supporting the sector through funding and
machinery sponsoring.

Top players in the sector are attaining sustainability in their products by

manufacturing textiles that use natural recyclable materials.

The future of the Indian textiles industry looks promising, buoyed by strong
domestic consumption as well as export demand. With consumerism and disposable
income on the rise, the retail sector has experienced a rapid growth in the past decade
with the entry of several international players like Marks & Spencer, Guess and Next
into the Indian market.
High economic growth has resulted in higher disposable income. This has led to rise
in demand for products creating a huge domestic market.

India - Knitting the future

India is among the world's largest producers of Textiles and Apparel
The domestic apparel & textile industry in India contributes 5% to the country’s
GDP, 7% of industry output in value terms, and 12% of the country’s export
earnings. India is the 6th largest exporter of textiles and apparel in the world.

India is one of the largest producers of cotton and jute in the world. India is also the
2nd largest producer of silk in the world and 95% of the world’s hand-woven fabric
comes from India. The Indian technical textiles segment is estimated at
$16 bn, approximately 6% of the global market.

17
The textiles and apparel industry in India is the 2nd largest employer in the
country providing direct employment to 45 million people and 100 million people
in allied industries.
India has also become the second-largest manufacturer of PPE in the world. More
than 600 companies in India are certified to produce PPEs today, whose global
market worth is expected to be over $92.5 bn by 2025, up from $52.7 bn in 2019.

• FDI in the textiles and apparel industry in India has reached up to $3.9 bn till
December 2021.

• India’s exports of textiles and apparel are expected to reach $100 bn in the
next 5 years, growing at a CAGR of 11%.

• To double the Indian textile and apparel industry size to $190 bn by 2025-26,
7 mega textile parks have been planned.

• The Indian technical textiles market was estimated at $17.6 bn in 2020-21 and
grew at a CAGR of 10% since 2015-16.

• The domestic technical textile market for synthetic polymer was valued at
$7.1 bn in 2020 and is projected to reach $11.6 bn by 2027, growing at a
CAGR of 7.2%, while the technical textile market for wovens is expected to
grow at a CAGR of 7.4% to $15.7 bn by 2027, up from $9.5 bn in 2020.

• India has a share of 4% of the global trade in textiles and apparel.

• The export of cotton Textiles was US$ 17.2 Bn with 39% share registering a
growth of 54% and 67% during 2021-22 over FY 2020-21 and FY 2019-20,
respectively.

Industry Scenario

Textiles and garments industry is expected to reach $190 bn by 2025-26 from

$103.4 bn in 2020-21.

The textiles and apparel industry in India has strengths across the entire value chain
from fiber, yarn, fabric to apparel. The Indian textile and apparel industry is highly

18
diversified with a wide range of segments ranging from products of traditional
handloom, handicrafts, wool, and silk products to the organized textile industry in
India. The organized textile industry in India is characterized by the use of capital-
intensive technology for the mass production of textile products and includes
spinning, weaving, processing, and apparel manufacturing.

The domestic textiles and apparel industry stood at $108.5 bn in 2019-20 of which
$75 bn was domestically consumed while the remaining portion worth $28.4 bn
was exported to the world market.

The highest contributors to FDI in the Textile sector of India (including dyed,
printed) from April 2016 to March 2021 are Japan, Mauritius, Italy, and
Belgium. India scaled its highest ever exports tally at US$ 44.4 Bn in Textiles and
Apparel (T&A) including Handicrafts in FY 2021-22, indicating a substantial
increase of 41% and 26% over corresponding figures in FY 2020-21 and FY 2019-
20, respectively.

Cotton production supports 5.8 million farmers and 40-50 million people in allied
sectors.

Further, the domestic consumption of $75 bn was divided into apparel at $55 bn,
technical textiles at $15 bn and home furnishings at $5 bn. While exports comprised
of apparel exports at $12 bn; home textiles exports at $4.8 bn; fabric exports at $4
bn; yarn exports at $3.8 bn; fiber exports at $1.8 bn and others at $2 bn.

USA was the top export destination accounting for 27% share, followed by EU
(18%), Bangladesh (12%) and UAE (6%).

Exports of RMG of all Textiles values at USD 1415.25 mn in May 2022 and records
positive growth vis-à-vis May 2021 of 27.85%

Exports of Man-made Yarn/Fabs./made-ups etc. values at USD 422.61 mn in May

2022 and records positive growth vis-à-vis May 2021 of 2.82%.

Exports of Jute Mfg. including Floor Covering values at USD 42.94 mn in May 2022
and records positive growth vis-à-vis May 2021 of 21.37%.

19
 A total of 1,77,825 Weavers and Artisans are registered on Government-e-
Marketplace (GeM).

GROWTH DRIVERS
• Abundance of raw material.

• Presence of entire value chains.

• Competitive manufacturing costs.

• Availability of skilled manpower.

• Large and growing domestic market.

• Rising per capita income, higher disposable incomes and preferences for
brands.

• Organized retail landscape & e-Commerce.

• Increased focus on technical textiles due to growth of end-user industries such

as automotive, healthcare, infrastructure and oil and petroleum.

• Production-Linked Incentive (PLI) Scheme in Man-made fiber and technical

textiles with financial outlay of INR 10,683 cr under Atmanirbhar Bharat
package.

Golden Era of Indian textile industry $650 billion opportunity by 2025

Indian manufacturers line up massive investment & expansion plans

It could well be considered the beginning of the Golden Era for the Indian textile
industry. The current year and beyond promises to be an excellent period of growth for
the industry. The Government led by Prime Minister Narendra Modi has given the much-
needed encouragement and confidence to the business community to further invest,

20
expand and grow. In our recent interaction with industry leaders, a sense of optimism
and confidence was quite evident.

The Government is expected to announce its new textile policy with an ambitious target
of achieving 20 per cent share of the global textile trade and helping the domestic
industry attain a size of $650 billion by 2024-25 by focussing on investments, skill
development and labour law reforms. The policy blueprint, termed the ‘Vision, Strategy
and Action Plan’ for the textiles and apparel industry, lays thrust upon diversification of
exports through new products and markets along with increasing value addition and
promoting innovation and R&D activities.

The textile industry is expected to attract investment of about $120 billion by 2024-25
and create about 35 million additional jobs in the process. Exports are also expected to
rise from the current $39 billion to $300 billion by 2024-25. The action plan notes that
attracting the required investment entails ready availability of developed land with
adequate infrastructure, skilled manpower and easy connectivity to ports, along with
creation of new mega textile parks, lowering the cost of production and logistics, and
encouraging new entrants through start-ups as well as FDI.

With the textile industry growth, the textile machinery sector size is also expected to
double to Rs. 45,000 crores in the next seven years from the present Rs. 22,000 crores
on the back of the new projects coming up and emphasis on setting up textile parks. “The
growth in the sector and upcoming new projects, along with the Government initiative
to set up textile parks, may boost the textile machinery industry. The market size of the
sector is set to double to Rs. 45,000 crores in the next 7 years from the present Rs. 22,000
crores,” the India ITME Society Chairman, Mr. Sanjiv Lathia said.

Seeing the future potential, Indian textile companies have already lined up investments
for future capacity expansion. Companies like Trident, Welspun, Nandan Denim, KPR
Mills, RSWM, Indo Count, Sutlej, Arvind, Raymonds, Himatsingka, Nitin Spinners and
Mafatlals have announced significant investments in areas like home textiles, denim and
garmenting.

21
India has become a dream market for most marketers across many product segments. In
textiles and apparel specifically, domestic consumption has grown at over 13 per cent
per annum over the last five years and crossed the $60 billion level, fuelled by the
demographic advantages of India’s population, increasing urbanisation, growing
disposable income and higher marked penetration of organized retail. India’s export of
textiles and apparel has also grown at over 11 per cent in the last five years and currently
stands at $40 billion – a success but a long way from where China’s industry stands
today (just 10 per cent), and nowhere near its potential.

Traditionally Indian textile and apparel manufacturing industries have been cotton
focused. Even today, cotton has more than a 60 per cent share compared to 40 per cent
share globally. But this scenario is changing fast. Manufacturers, as well as brands, are
increasingly looking towards other fibre options, mainly polyester. With the increase in
the ‘Value Retailing’ format in the domestic market and rising demand for synthetic
fibre-based products from global brands and retailers, demand for polyester is set to
grow.

22
However, India’s downstream industry in textiles and apparels is not well developed,
resulting in a weak link in the value chain. Investment is therefore required from
international groups, as well as local Indian companies, to adjust the scale, efficiency
and sophistication of India’s textile system to match future demand growth.

The Indian textile industry is now going through a consolidation phase. There are now
30 companies with a turnover of more than $200 million, and many of them are
registering double-digit growth. There are another 100 companies which are seen as stars
of the future. We believe that it is these companies that could attract a host of leading
edge, international textile and apparel companies into successful joint ventures. A more
experienced and commercially enhanced system can be created in order to successfully
compete against China and other Asian nations and drive India’s textile industry forward
to reach new heights.

The Indian technical textile industry is expected to grow at a rate of 20 per cent annually
to touch $30 billion in the next five years. “In view of the growing demand, the country’s
technical textile industry is expected to grow at a rate of 20 per cent annually to touch
$30 billion over the next five years,” the Textile Commissioner, Ms. Kiran Soni Gupta,
said at the recent Techtextil India show in Mumbai.

The emergence of India as the second largest textile exporter in 2013 has encouraged
textile players in the country to widen their production base extensively. In this edition,
we have put together some of the major investment and expansion programs by Indian
textile companies, some of which have been completed, some in progress and many lined
up for the future.

The textile industry is one of the oldest business options in India since the ancient
age. Different types of textile fibers are produced in India, among which cotton, jute,
silk, and wool are the major ones. Both skilled laborers and unskilled officials are
needed to run this business smoothly.

23
Thus, the textile industry serves as the platform offering a huge number of
employment opportunities to eligible people in India. The products of the Indian
textile industry with the traditional designs and textures are very popular all over the
world. People associated with this industry hope to see a great comeback in 2022,
overcoming the setback during the past 2 years due to the pandemic situation.

Several obstacles faced by the Indian textile industry recently

• In the last financial year, the pandemic was still at a great height that
eventually led to the closure of several manufacturing units in the textile
industry. These factory owners were forced to close due to the shortage of
manpower. The lack of funds to buy raw materials for production was another
drawback in this industry.

• According to the government rules, all textile factories had to work with only
50% manpower. Thus, these companies could not meet the deadlines of bulk
orders, though such orders were rare to receive at that time.

• The Indian government imposed new GST with higher rates on industries. So,
the textile industry now finds it harder to pay the taxes on their sales.
Therefore, business owners are quite agitated due to its negative impact.

• Political tensions or militant activities in some places hinder the smooth

operations of the textile industry there. Many textile companies face severe
labor shortages and a lack of regular transportation if their factories are located
in remote places.

• The government provides financial support only to small and medium-scale

companies. Hence, many business owners do not strive for further growth of
their textile companies to keep on receiving those benefits.

• Cotton textile is the major player in the Indian textile industry. The price of
cotton has risen too much now, which is a major setback for textile industry
owners. They find it hard to maintain their supply chain due to this price hike.

• The inflation in the Indian economy results in frequent demands among

laborers for salary hikes. Thus, industry owners do not find the means to
expand their business and compete with global textile leaders from other
countries.

24
 • Common laborers do not have the skills to produce the best textile designs.
They are not formally trained in textile manufacturing and learn only while
working here. This practice has a negative effect on the quality of end products
manufactured by these textile companies.

• Many textile business owners lack updated knowledge of the modern trend.
Hence, they cannot produce stylish products that will satisfy global customers.

• The high cost of power in India is another hindrance to textile production.

Most modern machines are power-driven, which raises the overall production
costs for business owners.

• Unfavorable government policies in India also obstructed the growth of the

textile industry. But other countries provide more support to their textile
businesses. Thus, the textiles of India cannot compete with them in the global
market.

Useful measures taken by the government for the Indian textile industry.

Fortunately, the Indian government has taken a series of positive steps to support the
textile industry in this country. The Union Ministry of Textiles is more active in
developing the textile industry, by constant coordination with business owners of
this sector. The Union Budget for 2022 – 23 also announced some benefits that can
help in the growth of the Indian textile industry.

• The government has launched an Emergency Credit Line Guarantee Scheme.

The aim of this scheme is to provide funds to micro and small textile business

25
 owners. This will help them to invest in increasing their production and
minimize the effect of the pandemic. This scheme will be available till March
2023, with a huge guarantee cover.

• The Indian government has several portals for the welfare of laborers. Udyam,
NCS, e-Shram, and ASEEM are the government portals that help people in
finding employment in various MSMEs. All these portals are now interlinked
to help business owners in finding manpower.

• The existing Credit Guarantee Trust for Micro and Small Enterprises is
improved by adding more funds for textile business owners. Thus, they can
spend more to expand their businesses and earn more revenue.

• The Indian government has allowed 100% Foreign Direct Investment (FDI)
in the textile industry. Thus, it will be easier for small companies to grow and
export their products to other countries.

• The National Technical Textiles Mission was proposed in the Union Budget
for 2020 -21. It will be active till 2023 – 24 with an estimated expense of Rs
1480 crore for the betterment of the textile industry.

• The government has made the packaging of food grains, sugar, and other dry
food materials only in jute sacks. This will boost the jute textile with better
business profits in India.

• The rates of incentives for the exports of readymade garments and dress
materials are increased from 2% to 4% by the Directorate General of Foreign
Trade. Thus, textile industry owners can expect more profits by exporting
their products now.

• The Indian government also approved the Integrated Wool Development

Programme (IWDP) to support the production of woolen garments. The
quality and production speed of woolen garments are also expected to improve
with the use of high-quality materials.

• Scheme for Capacity Building in Textile Sector (SCBTS) is launched by the

Cabinet Committee on Economic Affairs. An estimated expense of Rs 1300
crore was designated for this scheme, for the skill development in the textile
industry.

26
 • The Union Finance Minister has emphasized the development of
infrastructure and the setting of centralized Effluent treatment plants for the
textile industry. So, funds are allotted in the current budget for these purposes,
for the best interest of this industry in India.

• The government has drawn certain schemes for farmers growing silk and
cotton in India. This support provided for the promotion of Sericulture and
cotton farming has decreased the prices of silk and cotton fibers. Thus, the
availability of raw materials at lower prices has made it easier for textile
industries to deal with these fibers.

• Production-linked incentive (PLI) scheme is launched for promoting the

apparel industry, as stated by the Secretary of Textiles Ministry Upendra
Prasad Singh.

• Prime Minister Mega Integrated Textile Region and Apparel (PM MITRA) is
another beneficial scheme created for the betterment of the infrastructure of
the textile industry.

The future of the Indian textile industry in 2022 and beyond

India is now recognized as the largest producer of cotton and jute garments in the
world. There is tough competition from China, Bangladesh, Pakistan, and Vietnam
for exporting textile products in the global market.

However, the Indian textile industry still manages for a comeback even after the
decline of the business in 2020 – 21. Since the textile industry not only comprises
large textile mills and high-end garment boutiques, self-employed artisans from rural
areas are also promoted through government schemes, like MGNREGA. Many rural
cooperatives and NGOs are also providing support to people working on a small-
scale for the textile industry.

All garment manufacturing units are returning to the normal state though at a slow
pace at present. The Indian textile industry is aiming to export products worth $40
to $100 billion within 2027. These garment units are fast expanding in size and
investments, to meet the bulk orders pouring in from various foreign countries in the
west.

27
The promotion of this industry through several government schemes has been the
greatest in the last three decades. The apparel industry is progressing fast with the
manufacturing of more varieties of products. This textile business is also spreading
in more countries across the world, leading to more earning of foreign money.

Narendra Goenka, the chairman of the Apparel Export Promotion Council has
confirmed this speedy growth of the textile industry in India after the pandemic
situation. A Comprehensive Economic Partnership Agreement is signed between
India and the United Arab Emirates in February 2022, in terms of the exports of
textiles and jewelry.

The textile units based in Noida and Tirupur have taken the responsibility of meeting
the export demands, which will start from May 2022. So, these units will increase
their manpower up to 30%, due to which more skilled people will get employment
there.

The technical matters of the textile industry have improved a lot in recent years.
However, the Indian textile industry still needs to progress in the research and
development of designs. The quality of raw materials also needs to be upgraded for
the production of the best quality garments.

Now, the textile industry contributes 5% to the GDP from domestic trade and 7%
from foreign exports. However, these values are expected to increase this year,
making this industry one of the leaders in the Indian economy.

• The Textile industry in India is one of the largest in the world with a
large raw material base and manufacturing strength across the value
chain.

• India is the 2nd largest producer of MMF Fibre. India is the 6th largest
exporter of Textiles & Apparel in the world.

28
• India became the second-largest manufacturer of Personal Protective
Equipment (PPE) kits in the world.

• India is the 6th largest producer of Technical Textiles with a 6% Global

Share (12% CAGR), the largest producer of cotton & jute in the world.

• India is:
▪ The second-largest producer of silk in the world
▪ Largest consumer and the second-largest producer of cotton
with 6 Mn tons of cotton production every year which is
about 23% of the world cotton.

• India is a global leader in jute production, accounting for about 70% of

estimated world production.

• The total number of looms installed in the jute industry was 48,322, as
of 01 January 2018. The installed spindles in jute mills other than 100 %
export oriented units were 7,48,612. The maximum installed capacity in
jute mills other than 100% export-oriented is about 2.75 mn tonnes
annually.

• The industry contributes to 7% of industrial output in value terms, 2% of

India’s GDP and 12% of the country’s export earnings.

• Four International Expos – Indian Handwoven and Home textiles

Sourcing were participated by Handloom Export Promotion Council in
different countries on virtual mode during March 2021 at Australia &
New Zealand; USA & Canada; Japan and Spain, France & Italy.

• Cotton production supports 5.8 Million farmers & 40-50 mn people in

allied sectors. India is also the second-largest producer of silk in the
world and 95% of the world’s hand-woven fabric comes from India.

• As per the 4th All India Handloom Census 2019-20, there are 35.22 lakh
handloom workers across the country.

29
 • The Textile industry in India is one of the largest sources of employment
generation in the country. The sector engages 16.73 lakhs of people
consisting of 10.28 % of the total employment share.

The Indian textiles sector has been one of the worst hit sectors due to the COVID-
19 crisis. In the context of its socio-economic primacy for the Indian economy,
which is second only to agriculture, the industry must be given sufficient attention
in academic and policy circles. This perspective is an earnest attempt at filling the
void in scholarship on the issue of linkages between the Indian textiles sector and
the COVID-19 crisis.

The unprecedented crisis in the form of COVID-19 flu pandemic has threatened to
derail the socio-economic life of people globally. In the current context, this article
discusses the impact of COVID-19 on the globalized Indian textiles sector, given the
primacy of the same with regard to social and economic realms of the country. The
study employs the method of assessing the impact of crisis from both demand and
supply sides, which in turn generates a combined impact.

It is found that the crisis has manifold implications for this vital industry. Be it from
the angle of consumer demand or production networks, the calamity has made its
presence felt across different processes of the sector. Given the multiplicity and
depth of these influences, it becomes imperative for the stakeholders, namely
government, industry and the citizens to evolve innovative and valuable measures to
contain the negative fallout from the crisis on this vital business.

Failure to do so could imperil scores of jobs and livelihoods and impede economic
growth. While the exact impact and combative strategies may be dynamic and
evolutionary as and when the crisis unfolds, the study pieces together diverse aspects
of the fallout of COVID-19. The analysis emphasizes on the need to think ‘out of
the box’ for tackling this unprecedented crisis. Some of the probable solutions to

30
tackle the crisis could be relaxation of tax compliance deadlines and rules, especially
for the lower economic strata, so that consumer demand conditions do not deteriorate
precipitously.

Also, a more comprehensive financial package than the ones already announced
(read: Atmanirbhar Bharat Abhiyan), factoring in labour and export-intensive
sectors of the likes of textiles, could be announced to stem the negative fallout of the
pandemic on the sector. The other major step could be concessions to exporters
against the Remission of Duties or Taxes on Export Products scheme so that they
are reimbursed for the hitherto unpaid duties and taxes.

The effect of COVID-19 on the Indian textiles industry is manifold. Be it demand or

supply, inputs or output, the flu pandemic has impacted almost all facets of the
Indian textiles industry. Needless to say, the issues and challenges presented by this
pandemic need a proper discussion to mitigate and contain its impact not only on the
industries but also on the entire economy, given the pre-eminence of this sector
within India’s economic landscape.

The primacy of the sector could be gauged with the aid of some simple statistics. As
of 2018–2019, the industry employed over 105 million people both directly and
indirectly, contributed about 12%–13% towards total industrial output, 12% towards
total exports and 2%–2.5% towards the country’s gross domestic product (GDP). In
fact, the sector is the second most important employment generator after agriculture.

The country exports a large part of its production to the USA, the EU and the Middle
East (PIB, 2020).In light of the above facts and explanation of the significance of
the sector for the Indian economy, it is important to be cognizant of some of the
issues and challenges before it in the wake of COVID-19 outbreak. Quite briefly,
these issues and challenges could range from low consumer demand owing to job
losses and wage reductions of buyers, illness of workers and consumers and supply

31
chain disruptions, thanks to the ‘stay at home’ quarantine measures taken by the
government.

Even though these self-isolating steps are important for containment of the disease,
their impact on the socioeconomic well-being is at best questionable. The Indian
textiles sector, which is one of the major employment providers, is undoubtedly
bearing the brunt of this pandemic, largely in part due to its integration with the
global economy. With depressed worldwide demand for consumer goods such as
textiles and disrupted supply chains, it is all too apparent that this globalized sector
is facing one of its worst crises in recent times.

The Pandemic

India, like the rest of the world, continues to reel under the COVID-19 crisis on an
unabated rate and scale. The virus has infected over 2,836,925 people in India and
killed as many as 53,866 till 20 August 2020. The corresponding global figures stand
at 22.41 million and 787,701, for people infected and killed by the virus.

These figures aid in understanding the gravity of this pandemic, which while not the
first flu pandemic to have afflicted humankind, happens to be one of the worst in
terms of its impact on the socio-economic landscape of not just India but the entire
world, given the greater global interconnectedness among different economies. The
outbreak threatens to derail trade and commerce for months and years to come, as
also jeopardizing employment of millions.

It is in this context that this article discusses some of the issues, challenges and
prospects of the COVID-19 outbreak with regard to the Indian textiles sector, one of
the major industries from an employment and trade perspective.

32
The Impact of COVID-19 on Indian

Given the pre-existent challenges in the demand and supply sides of the industry, an
acquaintance with the same shall be helpful for the upcoming analysis in the context
of COVID-19. The Indian textile sector is besotted with issues such as lack of
technology upgradation, inefficient infrastructure, fragmented industry structure,
sluggish demand in major export markets like the USA and the EU due to the
vestigial impact of the Global Financial Crisis and rising competition from countries
such as Vietnam, Bangladesh, China and Turkey in areas such as apparels, cotton
fabric and carpets (Anthony & Joseph, 2014; Dhiman & Sharma, 2017; Kathuria,
2013, 2018; Kumar, 2001).

All these factors only sought to provide a weak foundation to the sector when it came
to weathering the storm of COVID-19 that further complicated the overall impact
on this already beleaguered sector.This section describes the methodology of the
study the implications of COVID-19 for the Indian textiles sector.

The modern textile industry

Both industrialized and developing countries now have modern installations capable
of highly efficient fabric production. In addition to mechanical improvements
in yarn and fabric manufacture, there have been rapid advances in development of
new fibres, processes to improve textile characteristics, and testing methods
allowing greater quality control.

The modern textile industry is still closely related to the apparel industry, but
production of fabrics for industrial use has gained in importance. The resulting wide
range of end uses demands a high degree of specialization. In the most technically
advanced communities, the industry employs technicians, engineers, and artists; and
a high degree of consumer orientation leads to emphasis on marketing operations.
Some manufacturing operations, usually serving specialized or local markets and

33
dependent on a limited number of firms for product consumption, still employ many
hand operations, however.

Modern fabrics

The many types of modern textile fabrics, produced from both traditional
and synthetic materials, are often classified according to structure. Fabrics made by
interlacing include woven and knitted types, lace, nets, and braid; fabrics produced
from fibre masses include bonded types, wool felt, and needle-woven
types; composite fabrics are produced by uniting layers of various types.
Conventional weaving and knitting methods are currently the major textile
manufacturing techniques, but newer construction methods are achieving
acceptance and may replace certain long-established products as costs of
conventional textiles continue to rise and rapid technological advances continually
develop new materials.

Quality control

Textile fabrics are judged by many criteria. Flexibility and sufficient strength for the
intended use are generally major requirements, and industrial fabrics must meet rigid
specifications of width, weight per unit area, weave and yarn structure, strength and
elongation, acidity or alkalinity, thickness, and porosity. In apparel fabrics, design
and colour are major considerations, and certain physical properties may be of
secondary importance. In addition, the various tactile properties of a fabric,
described as its “hand,” “handle,” or “feel,” influence consumer acceptance.

The textile industry increasingly employs research and development in the area of
quality control. Medieval craft guilds were concerned with maintaining high quality
standards, and later textile mills established rigid systems of inspection, realizing
that a reputation for supplying fault-free goods encouraged repeat orders. Modern
quality control has been assisted by development of techniques and machines for
assessing fibre, yarn, and fabric properties; by the introduction of legislation
regarding misrepresentation in many industrialized countries; and by the
establishment of rigid specifications by a growing number of buyers.

34
Specifications have been established for the purchase of industrial fabrics, for
textiles used by the military and other branches of governments, and for similar
purchasing methods adopted by some retailers and other large buyers. In consumer-
oriented areas, the public is becoming aware of product testing and is beginning to
require proof that products have met certain test standards.

Many modern textile organizations test product quality at every major stage of
processing. Yarns are tested for uniform thickness and other characteristics; fabric
pieces are checked for defects; and the fastness of finishes and colours to various
conditions is determined. Although it would not be feasible to test each yarn or
fabric piece produced, statistical techniques allow maintenance of quality within
previously specified limits, and the introduction of automatic testing devices has
greatly reduced testing time and cost.

Methods for assessing such properties as dimensions, strength, and porosity have
been established, and their validity is generally accepted within the industry.
Standards are available for colourfastness, although such important properties as
water-repellency, resistance to creasing, and flame resistance are presently more
difficult to define, and various organizations have adopted their own test procedures.
It is important, for example, that a fabric described as flame-resistant should conform
to some specification in which the meaning of flame resistance is clearly defined.

Some manufacturers attach trademarks and quality labels to tested goods, and
licensed trademarks are often associated with particular processes for which the
manufacturer has been granted a license. The terms of the license require the
manufacturer to ensure that his products meet the standards laid down by
the proprietors of the particular process.

Production of yarn

35
Yarn is a strand composed of fibres, filaments (individual fibres of extreme length),
or other materials, either natural or synthetic, suitable for use in the construction of
interlaced fabrics, such as woven or knitted types. The strand may consist of a
number of fibres twisted together; a number of filaments grouped together but not
twisted; a number of filaments twisted together; a single filament, called a
monofilament, either with or without twist; or one or more strips made by dividing
a sheet of material, such as paper or metal foil, and either twisted or untwisted. The
properties of the yarn employed greatly influence the appearance, texture, and
performance of the completed fabric.

Textile fibres
Raw materials

Fibres are units of matter having length at least 100 times their diameter or width.
Fibres suitable for textile use possess adequate length, fineness, strength, and
flexibility for yarn formation and fabric construction and for withstanding the
intended use of the completed fabric. Other properties affecting
textile fibre performance include elasticity, crimp (waviness), moisture absorption,
reaction to heat and sunlight, reaction to the various chemicals applied during
processing and in the dry cleaning or laundering of the completed fabric, and
resistance to insects and microorganisms. The wide variation of such properties
among textile fibres determines their suitability for various uses.

The first fibres available for textile use were obtained from plant and animal sources.
Over a long period of experimentation with the many natural
fibres available, cotton, wool, jute, flax, and silk became recognized as the most
satisfactory. The commercial development of synthetic fibres began late in the 19th
century, experienced much growth during the 1940s, expanded rapidly after World
War II, and is still the subject of extensive research and development.

This group includes regenerated fibres, such as rayon, made from fibre-forming
materials already existing in nature and manipulated into fibrous form, and synthetic
fibres, with the fibre-forming substance produced from chemicals derived from such
sources as coal and oil and then made into such fibres as nylon and polyester.

36
In modern mills, most fibre-processing operations are performed by mechanical
means. Such natural fibres as cotton, arriving in bales, and wool, arriving as fleece,
are treated at the mill to remove various foreign materials, such as twigs and burrs.
Wool must also be treated to remove suint, or wool grease; silk must be treated to
remove sericin, a gum from the cocoon, and the very short silk fibres, or waste silk.
Raw linen, the fibre of flax, is separated from most impurities before delivery.
Synthetic fibres, since they are produced by factory operations, rarely contain
foreign materials.

Blending, frequently employed for natural fibres, involves mixing fibres taken from
different lots to obtain uniform length, diameter, density, and moisture content, thus
assuring production of a uniform yarn. Blending is also employed when different
fibres are combined to produce yarn. Synthetic fibres, which can be cut into uniform
tow, do not require blending unless they are to be mixed with other fibres.

Cotton, wool, waste silk, and synthetic staple are subjected to carding, a process of
separating individual fibres and causing many of them to lie parallel and also
removing most of the remaining impurities. Carding produces a thin sheet of uniform
thickness that is then condensed to form a thick, continuous, untwisted strand
called sliver.

When very fine yarns are desired, carding is followed by combing, a process that
removes short fibres, leaving a sliver composed entirely of long fibres, all laid
parallel, and both smoother and more lustrous than uncombed types. Slivers may be
loosely twisted together, forming roving. Hackling, a process applied to straighten
and separate flax, is similar to combing.

Fabric construction yarns

Almost any textile yarn can be used to produce such interlaced fabrics as woven and
knitted types. In weaving, the warp, or lengthwise, yarns are subjected to greater
stress and are usually stronger, smoother, and more even and have tighter twist than
the weft, or crosswise, yarns. A sizing (stiffening) material such as starch may be

37
applied to warp yarns, increasing their strength to withstand the stresses of
fabric construction operations. Weft yarns, subjected to little stress during weaving,
may be quite fragile.

Warp and weft threads used in the same fabric may be of differing diameter,
producing such special effects as ribbing or cording in the fabric. Special effects may
also be obtained by combining warp and weft yarns of fibre from differing origin, or
with different degrees of twist, or by introducing metallic threads into weaves
composed of other fibres.

Yarns for machine knitting are usually loosely twisted because softness is desired in
knit fabrics.

Yarns used in handwork

Yarns used in hand knitting are generally of two or more ply. They include such
types as fingering yarns, usually of two or three plys, light to medium in weight and
with even diameter, used for various types of apparel; Germantown yarns, soft and
thick, usually four-ply and of medium weight, frequently used for sweaters and
blankets; Shetland yarns, fine, soft, fluffy, and lightweight, frequently two-ply, used
for infants’ and children’s sweaters and for shawls; worsted knitting yarn, highly
twisted and heavy, differing from worsted fabric by being soft instead of crisp, and
suitable for sweaters; and zephyr yarns, either all wool, or wool blended with other
fibres, very fine and soft, with low twist, and used for lightweight garments.

Embroidery floss, used in hand embroidery, generally has low twist, is of the ply or
cord type, and is made of such smooth filaments as silk and rayon. Yarn used for
crocheting is frequently a loose cotton cord type; and darning yarns are usually
loosely spun.

Sewing thread

Sewing threads are tightly twisted ply yarns made with strands having equally
balanced twist, producing a circular cross section. Thread for use in commercial or

38
home sewing machines and for hand sewing should allow easy movement when
tension is applied and ease in needle threading; should be smooth, to resist friction
during sewing; should have sufficient elasticity to avoid the breaking of stitches or
puckering of seams; and should have sufficient strength to hold seams during
laundering or dry cleaning and in use.

Threads for special uses may require appropriate treatment. Garments made of
water-repellent fabrics, for example, may be sewn with thread that has also been
made water-repellent. Thread is usually subjected to special treatment
after spinning and is then wound on spools. Thread size is frequently indicated on
the spool end, and systems for indicating degree of fineness vary according to the
textile measurement system used locally.

Silk thread has great elasticity and strength combined with fine diameter. It can be
permanently stretched in sewing, and is suitable for silks and wools. Buttonhole
twist is a strong, lustrous silk about three times the diameter of normal sewing silk,
and is used for hand-worked buttonholes, for sewing on buttons, and for various
decorative effects.

Cotton thread is compatible with fabric made from yarn of plant origin, such as
cotton and linen, and for rayon (made from a plant substance), because it has similar
shrinkage characteristics. It is not suitable for most synthetics, which do not shrink,
or for fabrics treated to reduce shrinkage. Its low stretch is useful for woven fabrics,
but not for knits, which require more stretch.

Nylon thread is strong, with great stretch and recovery, does not shrink, and is
suitable for sheers and for very stretchy knits. Polyester thread has similar
characteristics, and is appropriate for various synthetic and preshrunk fabrics, and
for knits made of synthetic yarns.

Measurement systems

Yarn measurements are expressed as yarn number, count, or size, and describe the
relationship of length and weight (or approximate diameter). Because methods
of measurement were developed in various areas of the world, there has been a lack
of uniformity in such systems.

39
Indirect systems

Indirect measuring systems are those employing higher number to describe finer
yarns and are based on length per unit weight. Most countries measure yarns made
from staple fibres according to the weight of a length of yarn. If one pound is used
as a standard unit, for example, a very fine yarn will have to be much longer than a
coarser yarn to weigh a pound, so higher counts indicate finer yarns. The size number
is an indication of the length of yarn needed to reach a weight of one pound.

In the United States, the system is based on the number of hanks per pound, with a
hank of 840 yards for cotton and spun silk, 300 yards (a lea) for linen, 256 yards for
woollen yarns, and 560 yards for worsted yarns. A widely used Continental system
is based on the number of hanks of 1,000 metres (one kilometre) required to reach a
weight of one kilogram.

Denier system

The denier system is a direct-management type, employed internationally to measure

the size of silk and synthetic filaments and yarns, and derived from an earlier system
for measuring silk filaments (based on the weight in drams of 1,000 yards).

Denier number indicates the weight in grams of 9,000 metres of filament or filament
yarn. For example, if 9,000 metres of a yarn weigh 15 grams, it is a 15-denier yarn;
if 9,000 metres of a yarn weigh 100 grams, it is a 100-denier yarn and much coarser
than the 15-denier yarn. Thus, a smaller number indicates a finer yarn. This system
is not convenient for measurement of staple yarns because their greater weight would
require the use of very large numbers.

Tex system

The tex system, originally devised in 1873, is a universal method developed for the
measurement of staple fibre yarns and is also applicable to the measurement of
filament yarns. It is based on the weight in grams of one kilometre (3,300 feet) of
yarn.

40
Production of fabric

Fabric construction involves the conversion of yarns, and sometimes fibres, into a
fabric having characteristics determined by the materials and methods employed.
Most fabrics are presently produced by some method of interlacing, such as weaving
or knitting. Weaving, currently the major method of fabric production, includes the
basic weaves, plain or tabby, twill, and satin, and the fancy weaves, including pile,
Jacquard, dobby, and gauze.

Knitted fabrics are rapidly increasing in importance and include weft types and the
warp types, raschel and tricot. Other interlaced fabrics include net, lace, and braid.
Nonwoven fabrics are gaining importance and include materials produced
by felting and bonding. Laminating processes are also increasing in importance, and
fairly recent developments include needle weaving and the sewing-knitting process.

Woven fabrics

Woven fabrics are made of yarns interlaced in a regular order called a binding
system, or weave. Weaving is the process of combining warp and weft components
to make a woven structure. The components need neither be parallel to each other
nor cross each other at right angles, but most woven structures are composed of two
sets of components, both flexible and crossing at right angles.

Weaving is differentiated from warp and weft knitting, braiding, and net making in
that these latter processes make use of only one set of elements. In addition, there
are geometrical differences, one of the most significant being the small angles
through which the components of a woven structure are, in general, bent, in contrast
with the components of other structures.

41
 CHAPTER -2
REVIEW OF LITERATURE

Bhaskaran (2013) studied that the Indian textile industry was one the of the largest
and oldest sectors in the country and among the most important in the economy in
terms of output, investment and employment. The sector employed nearly 35 million
people and after agriculture, it was the second‐highest employer in the country and
accounts for around 4 % of Gross Domestic Product, 14 % of industrial production,
18 % of employment in the industrial sector, and 16 % of the country’s total exports
earnings. For inclusive growth and sustainable development most of the Textile
Manufacturers had adopted the Cluster Development Approach for the textile
clusters like Maharashtra; Ludhiana Tirupur Textile Cluster, Tamilnadu and Panipat
Textile Cluster, etc. in India. It was concluded that for improving the performance
and for sustainable development, the textile industry should strengthen
infrastructure, Technology, production interrelationships and marketing
interrelationships to decrease cost, increase productivity and efficiency to compete
in the world market.

Maiyo and Imo (2012) found that with the Kenyan textile industry was one of the
most important contributors to industrial development, liberalization of the
country’s economy in the early 90’s and it resulted ingreat competition from
imported clothing leading to closure of some textile industries. Kenya’s textile
industry was adversely affected due to manpower underdevelopment, high cost of
production, competition both in the local and international markets, consumer
preference for imported textiles and corruption. The purpose of this study was to
study these crucial issues which obstructed the growth of Kenyan industry globally.
And challenges that the industry was facing due to liberalization. Significantly,
government support through reduction of operation costs and review of training
courses in relevant institutions to meet industry needs and increase human
development and training were importantin increasing the industry’s performance.

42
Abraham and Sasikumar (2011) analyzed the implementation of the Agreement
on Textile and Clothing (ATC) of the World Trade Organization (WTO),this
agreement both threatens and provides opportunities to India’s Textile and Clothing
(T&C) industry in the wake of liberal international trade. Firms acquire greater
international competitiveness through various cost cutting and efficiency enhancing
strategies. It was concluded that increasing the share of low cost labour would
improve the export performance of Indian textile industry. Further, the use of this
means the need to perform better in the international market aggravated in the period
after the implementation of the ATC. On the other hand, capital and technology
based factors did not have any perceptive effect on the export performance of Indian
firms in the international market.

Shaikh et al., (2011) highlightedthe impact of Global Financial Crisison textile

industry clusters in Pakistan. A cross sectional data was collected from 25 textile
industries by using simple random technique and data were analyzed using E-Views
software. Structural questionnaire was the basic tool for measuring the performance
of textile industry during the financial Recession in Pakistan. It was revealed that the
industry was in urgent need of financial and technological investments. It was also
revealed that the Global financial crisis had negative impact on the export of textile
industry in Pakistan. The export of textile related products had decreased by 20
percent due to the decrease in textile demand. It was further revealed that textile
industry was facing problems such as electricity and high taxes.

Rajesh, B. (2001),. Found that on the ongoing debate on the enactment of labour
laws in India on one hand, by reducing trade barriers and seeking the help of FDI,
on the other hand, going to face competition induced growth and attract FDI.
Highlighting the issue of a need for an industry friendly labour laws to enable the
textile industry to face emerging world competition .China had two sets of labour
laws, one for old companies and the other for the new ones. To attract investments,
they had made labour laws flexible for new companies. Therefore, it expresses a
feeling that government should allow a certain number of labour to be replaced so
that the new set of workers can handle new technology efficiently

43
 CHAPTER -3
Research Methodology

44
SECONDARY DATA

The method used in this paper is descriptive-evaluative method. The

study is mainly review based. It is purely supported by secondary source
of data, i.e. books, journals, papers and articles and internet.

Objectives of the Study :

1. To evaluate the textile industry and to study the challenges faced by the industry
in India.
2. To analyse the industry and to focus on contribution to Indian Economy.
3. To give suggestions to overcome the challenges of the textile industry in the
country.

Challenges faced by the Textile Industry in India

India has grown rapidly in the recent years, driven by the development of new-age
Industries. The rise in the purchasing power has also led to increase in the demand
for a new level of quality of service. With the changing economic environment, it
has become the need of an hour to focus on imparting and promoting the skills of
the young population of India as there, there is still a shortage of skilled manpower
to meet the increasing demands of the economy which is one of the challenge that
the industry is facing. This study attempts to come up with the suggestions to
minimize the existing challenges and propose solutions which could help to resolve
the above mentioned problem. It is explained as follows:

1. Outdated Technology
Due to the lack of domestic manufacturers of the machinery of the textile industry
there has been inability of the cloth manufacturers to replace old and worn out
machinery for production. Moreover there is a waiting period of 2 to 3 years and by
th3 time it is imported the machinery becomes outdated which affects the quality
and productivity. Apart from this, due to lack of investment and research in the area
of textile machinery, the industry is forced to import machinery to compete with

45
other textile producing countries which increases the costs and productive
efficiency. Although there have been schemes such as the Soft Loan Scheme for
modernization of textile industry equipment, the problem has not been completely
addressed. In fact, the rate of absorption of modern machinery and technology in the
industry has been slow.

2. Power Shortage
Textile mills face acute power shortage. Frequent electricity cuts and staggering
affect the industry tremendously, leading to loss of man hours and low production
in the mills. According to a report by research firm Fibre2fashion, states like Tamil
Nadu and Andhra Pradesh have lower textile production than their capability. The
industry in Tamil Nadu faces daily losses worth 300 crores due to power shortages
or irregular power supply. Small and medium scale textile enterprises are severely
affected by power shortage and are forced to use manual machines, which produce
lower quality products and are more costly to maintain which leads to longer
working hours and also affects the health of workers. In addition, the continuous rise
in oil prices made alternate arrangements costlier with the same consequences.

3. Illicit Markets
Rapid advancement in technology and liberalisation of the economy has provided
opportunities for misuse of existing brand values that have been cultivated and
nurtured over a period of time. Counterfeiting has become an economic problem of
international importance and has been growing in magnitude, affecting a wide range
of sectors including textiles and apparels. According to a worldwide survey by
OECD in 2008, the largest share (30%) of seizures of infringing items belonged to
the textiles and apparels industry. According to Fibre2fashion the most popular
counterfeit market in India is clothing, followed by shoes, watches, leather goods,
and jewellery. Foreign luxury brands such as Louis Vuitton, Gucci, Burberry,
Tiffany, Prada, Hermes, and Cartier are frequently pirated. Students and
businessmen are the largest consumers of these products. Manufacturers of original
products, face enormous losses due to counterfeit products. The common consumer,
with limited knowledge, prefers to buy these counterfeit products due to cheap or

46
discounted prices, usually 40% to 45%lower than original value, often willingly
compromising on quality.

4. Labour Related Problems

India has an extensive youthful populace holding on to join the workforce. The
textile industry has a lot to offer to these activity searchers attributable to its work
serious nature and ability to retain work into little units. However, as different
ventures, the textile industry in India additionally faces a few problems identified
with work, which are examined in the accompanying sections. First of all the textile
industry is highly fragmented which includes various processes from spinning to
garmenting. It is very much essential to see the safety and health concerns of the
workers working in this industry. child labour is another problem associated with
this industry. According to a report by the India Committee of the Netherlands
(ICN),in 2007, more than400,000 children under the age of 18 were found to be
employed in cotton seed farms in the states of Gujarat, Andhra Pradesh, Tamil Nadu
and Karnataka. More than half of these children were younger than fourteen
often below the official minimum.

Along with modernisation, there is a need for skilled workers in the industry, who
can run the machinery efficiently and understand modern production processes.
Thus the skill requirement increases with technological up gradation. In India, due
to the fear of increase in requirement of skilled labour, many firms in the industry
are hesitant to expand their scale of operations or enter into high end segments with
cutting edge technology. Currently, there is a massive gap between the availability
of skilled manpower and the requirements of the industry, particularly in the
weaving, dying, processing and garment segments. According to an analysis by
ICRA Management Consulting Services and National Skill Development
Corporation,53 the expected shortfall in skills in the textile and clothing industry is
estimated to at 26.2 million people in 2022.

5. Poor Working Environment

The type of work environment in which employees operate determines the way in
which such enterprises prosper. The basic facilities such as toilets, drinking water,
ventilation and fans are not available, working areas are engulfed in darkness and

47
layers of grease lay underfoot. According to a Fibre2fashion study in most textiles
units in India workers face a number of problems such as unsuitable furniture,
improper ventilation and lighting, and lack of efficient safety measures in case of
emergencies. Workers in such units are at risk of developing various diseases such
as musculoskeletal disorders, osteoarthritis of the knees etc.

6. Excise Duty on Man-Made Fibres

An industry research report states that factors like rise in disposable income, growing
consumer class, rising urbanisation, increasing retail penetration are likely to
increase the share of Man-Made Fibres (MMFs) like polyester and viscose in the
market by around 2017. Weavers and textile processors in Surat expect an increase
in consumption of MMFs in the domestic market at a compounded annual growth
rate of 5.2% at the end of 2015-16. The challenge however for the textiles and
apparels industry lies in the fact that while globally, there is no distinction made
between cotton and MMF, but in India there is a differential tax treatment for the
two segments. Excise duty on natural fibres like cotton, wool and flax is nil,
manmade fibre, filament and yarn attract duty as high as 12.5%. China, Pakistan, Sri
Lanka, Indonesia and Thailand follow fibre neutral policies where excise duty on
cotton/cotton yarn and MMF/MMF yarn textiles are at the same levels. MMF being
a high technology and high investment area requires an enabling and better fiscal
environment. Reduction in excise duty on MMF will stimulate growth of the
industry by attracting investments leading to completing the value chain and higher
production and exports, thereby generating additional employment.

The issues textile industry of India is facing like :-

• Shortage in supply of raw materials
• Increase in the cost of raw materials
• Environmental problems
• Infrastructure bottlenecks
• Impact of GST
• Shortage of laborer’s due to a mass return
• The decline in Apparel export.

48
 CHAPTER – 4
FINDINGS
1) For making the textile industry competitive in the global market we need to
focus on technology up-gradation and expand weaving capacity to scale-up
operations.

2) To enable the textile industry to compete at the highest level we need support
from both central and state government.

3) The state government should provide all the approval in place, including the
provision of common effluent treatment plants for rapid scaling up of
business.

49
 CHAPTER – 5
CONCLUSION & SUGGESTIONS
Certain suggestions and conclusions are suggested to overcome the challenges faced
by Textile Industry.
The Government had launched the Technology Up-gradation Fund Scheme (TUFS)
from 1st April,1999 to give the industry the facility of timely credit and capital at
internationally comparable rates of interest for upgrading its technology and
improving its competitiveness but less benefits are taken by the industrialist so the
suggestion is to take maximum advantage to improve the efficiency and
productivity. Further, uninterrupted power supply is necessary to support the textiles
and apparels industry in India which comprises several small and medium scale
units. . Anti-counterfeiting measures in India are not effectively implemented,
further aggravating the problem. Usually the cost of a duplicate product is always
cheaper than the original one as are result of which the original manufacturers are at
a loss and this affects the innovation and investment too so strict actions should be
taken by the government. Labour issues and poor working environment need utmost
attention. According to research from Fibre2fashion, lower excise on manmade
fibres has triggered tremendous growth in the MMF industry.

According to the Textile Ministry, although there has been substantial reduction in
excise duties on manmade fibres during the last 10 years, but still it is high. Any
reduction in excise duties on MMF and MMF textiles will have a positive impact on
the growth of MMF consumption and ultimately impact the textiles and apparels
industry as a whole.

The future for the Indian textile industry looks promising, buoyed by both strong
domestic consumption as well as export demand. With consumerism and disposable
income on the rise, the retail sector has experienced a rapid growth in the past decade
with the entry of several international players like Marks & Spencer, Guess and Next
into the Indian market. The organised apparel segment is expected to grow at a

50
Compound Annual Growth Rate (CAGR) of more than 13 per cent over a 10-year
period. The Union Ministry of Textiles, which has set a target of doubling textile
exports in 10 years, plans to enter into bilateral agreements with Africa and Australia
along with working on a new textile policy to promote value addition, apart from
finalising guidelines for the revised Textile up gradation Fund Scheme (TUFS). The
Indian cotton textile industry is expected to showcase a stable growth in FY2017-
18, supported by stable input prices, healthy capacity utilisation and steady domestic
demand.

High economic growth has resulted in higher disposable income. This has led to rise
in demand for products creating a huge domestic market. The domestic market for
apparel and lifestyle products, currently estimated at US$ 85 billion, is expected to
reach US $160 billion by 2025. The Indian cotton textile industry is expected to
showcase a stable growth in FY2017-18, supported by stable input prices, healthy
capacity utilization and steady domestic demand.

51
 ANNEXURE
• https://en.m.wikipedia.org/wiki/Textile_industry_in_India

• https://www.google.com/amp/s/fashinza.com/textile/fashion-industry/an-
overview-of-indias-textile-industry-in-2022/amp/

• https://www.indiantextilemagazine.in/golden-era-of-indian-textile-industry-
650-billion-opportunity-by-2025/

• https://www.researchgate.net/publication/334738057_ISSUES_AND_CHA
LLENGES_OF_TEXTILE_BUSINESS_IN_GLOBAL_SCENARIO

• https://www.google.com/search?q=challenges+and+issues+faced+by+textile
+industry+research+paper&hl=enGB&sxsrf=ALiCzsaNFTeAfutyXLncHwv
v2kKdb_zQ%3A1655633652978&ei=9PauYvysO_PD4EP4_2Z4AU&oq=h
allenges+and+issues+faced+by+textile+industry+research+paper&gs_lcp=C
hNtb2JpbGUtZ3dzLXdpei1zZXJwEAM6BwgAEEcQsAM6BAgeEAoBAh
EApKBAhBGABQzhNYhiZg5iloAXAAeACAAZICiAHoC5IBBTAuNC4z
mAEAoAEByAEIwAEB&sclient=mobile-gws-wiz-serp

• https://www.britannica.com/topic/textile/The-modern-textile-industry

• https://www.google.com/amp/s/www.businesstoday.in/amp/magazine/indust
ry/story/heres-what-the-indian-textile-industry-wants-316704-2022-01-03

• https://scholar.google.co.in/scholar?q=issues+faced+by+textile+industry+fin
dings&hl=en&as_sdt=0&as_vis=1&oi=scholart

• https://www.textilesphere.com/2021/08/indian-textile-industry-challenges-
remedies-government-initiatives.html?m=1

• https://en.m.wikipedia.org/wiki/Textile_industry#:~:text=The%20textile%20
industry%20is%20primarily,products%20of%20the%20chemical%20industr