Indian Textile Industry and Its Share in GDP

Posted by Default on December 22, 2018 in

Source: Textile Review

India textile industry largely depends upon the textile manufacturing and export. It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the COP of the country. India textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors.

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

India textiIe industry largely depends upon the textiIe manufacturing and export. It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textiIe exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the GDP of the country. India textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. Indian textile industry currently generates employment to more than 35 million people. It is also estimated that, the industry will generate 12 million new jobs by the year 2010

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Author is Assistant professor ,Department of Commerce ,Karpagam University,Coimbatore 

Originally published in Textile Review : April 2010

industry had to face adverse agro-c1imatic conditions, it succeeded in producing 290 lakh bales of cotton comparing to 315 lakh bales last year, yet managed to retain its position as world's second highest cotton producer.

Strengths

• Vast textiIe production capacity
• Large pool of ski lied and cheap work force
• Entrepreneurial skills
• Efficient multi-fiber raw material manufacturing
• capacity
• Large domestic market
• Enormous export potential
• Very low import content
• Flexible textile manufacturing systems

Weaknesses

• Increased global competition in the post 2005 trade
• regime under WTO
• Imports of cheap textiles from other Asian neighbors
• Use of outdated manufacturing technology
• Poor supply chain management
• Huge unorganized and decentralized sector
• High production cost with respect to other Asian competitors

Cotton exports from India

Current facts on Indian textile industry

• India retained its position as world's second highest cotton producer.
• Acreage under cotton reduced about 1 % during 200809.
• The productivity of cotton which was growing up over the years has decreased in 2008-09.
• Substantial increase of Minimum Support Prices (MSPs).
• Cotton exports couldn't pick up owing to disparity in domestic and international cotton prices.
• Imports of cotton were limited to shortage in supply of Extra Long staple cottons.

Role of Textile Industry in India GDP

Role of Textile Industry in India CDP has been quite beneficial in the economic life of the country. The worldwide trade of textiles and clothing has boosted up the CDP of India to a great extent as this sector has brought in a huge amount of revenue in the country.

In the past one year, there has been a massive upsurge in the textile industry of India. The industry size has expanded from USD 37 billion in 2004-05 to USD 49 billion in 200607. During this era, the local market witnessed a growth of USD 7 billion, that is, from USD 23 billion to USD 30 billion. The export market increased from USD 14 billion to USD 19 billion in the same period.

The textile industry is one of the leading sectors in the Indian economy as it contributes nearly 14 percent to the total industrial production. The textile industry in India is claimed to be the biggest revenue earners in terms of foreign exchange among all other industrial sectors in India. This industry provides direct employment to around 35 million people, which has made it one of the most advantageous industrial sectors in the country.

Some of the important benefits offered by the Indian textile industry are as follows:

• India covers 61 percent of the international textile market
• India covers 22 percent of the global market
• India is known to be the third largest manufacturer of cotton across the globe
• India claims to be the second largest manufacturer as well as provider of cotton yarn and textiles in the world
• India holds around 25 percent share in the cotton yarn industry across the globe
• India contributes to around 12 percent of the world's production of cotton yarn and textiles

The Role of Textile Industry in India CDP had been undergoing a moderate increase till the year 2004 to 2005. But ever since, 2005-06, Indian textiles industry has been witnessing a robust growth and reached almost USD 17 billion during the same period from USD 14 billion in 200405. At present, Indian textile industry holds 3.5 to 4 percent share in the total textile production across the globe and 3 percent share in the export production of clothing. The growth in textile production is predicted to touch USD 19.62 bi Ilion during 2006-07. USA is known to be the largest purchaser of Indian textiles.

Following are the statistics calculated as per the contribution of the sectors in Textile industry in India GDP:

• India holds 22 percent share in the textile market in Europe and 43 percent share in the apparel market of the country. USA holds 10 percent and 32.6 percent shares in Indian textiles and apparel.
• Few other global countries apart from USA and Europe, where India has a marked presence include UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan
• Ready made garments accounts for 45 percent share holding in the total textile exports and 8.2 percent in export production of India
• Export production of carpets has witnessed a major growth of 42.23 percent, which apparently stands at USD 654.32 million during 2004-05 to USD 930.69 million in the year 2006-07. India holds 36 percent share in the global textiIe market as has been estimated during April-October 2007
• The technical textiles market in India is assumed to touch USD 10.63 billion by 2007-08 from USD 5.09 billion during 2005-06, which is approximately double. It is also assumed to touch USD 19.76 billion by the year 2014-15
• By 2010, India is expected to double its share in the international technical textile market
• The entire sector of technical textiles is estimated to reach USD 29 billion during 2005-2010

Conclusion

The Role of Textile Industry in India GDP also includes a hike in the investment flow both in the domestic market and the export production of textiles. The investment range in the Indian textile industry has increased from USD 2.94 billion to USD 7.85 billion within three years, from 2004 to 2007. It has been assumed that by the year 2012, the investment ratio in textile industry is most likely to touch USD38.14billion

Reference

• Doshi, Gaurav "Textile Industry in India." Textile Industry in India. 1 Dec. 2006 EzineArticles.com. 9 Feb. 2010
• FICCI, "Trends Analysis of India & China's Textiles and Apparel Exports to USA Post MFA, FICCI, New Delhi, July 2005.
• Texmin, Official website of Ministry of Textiles, Government of Indian, http://texmin.nic.in,2005.
• " OTC, "Compendium of Textile Statistics," Office of Textile Commissioner, Minsitry of Textiles, Government of India, Mumbai, 2004.

Author is Assistant professor ,Department of Commerce ,Karpagam University,Coimbatore 

Originally published in Textile Review : April 2010