Indian Textile and
Dr. T. S Devaraja
Indian Textile and Garment Industry‐
By: Dr. T. S Devaraja
Department of Commerce
Post Graduate Centre
University of Mysore
The work described in this working paper was substantially supported by a grant from the Indian Council of Social Science Research, Ministry of Human Resource Development, Government of India, New Delhi.
India is the world’s second largest producer of textiles and garments after China. It is the world’s third largest producer of cotton-after China and the USA-and the second largest cotton consumer after China. The Indian textile industry is as diverse and complex as country itself and it combines with equal equanimity this immense diversity into a cohesive whole. The fundamental strength of this industry flows from its strong production base of wide range of fibres / yarns from natural fibers like cotton, jute, silk and wool to synthetic /man-made fibres like polyester, viscose, nylon and acrylic. The growth pattern of the Indian textile industry in the last decade has been considerably more than the previous decades, primarily on account of liberalization of trade and economic policies initiated by the Government in the 1990s. In producer-driven value chains, large, usually transnational, manufacturers play the central roles in coordinating production networks. This is typical of capital- and technology-intensive industries such as automobiles, aircraft, computers, semiconductors and heavy machinery. Buyer-driven value chains are those in which large retailers, marketers and branded manufacturers play the pivotal roles in setting up decentralized production networks in a variety of exporting countries, typically located in developing countries. This pattern of trade-led industrialization has become common in labour-intensive, consumer-goods industries such as garments, footwear, toys, handicrafts and consumer electronics. Large manufacturers control the producer-driven value chains at the point of production, while marketers and merchandisers exercise the main leverage in buyer-driven value chains at the design and retail stages. Apparel is an ideal industry for examining the dynamics of buyer-driven value chains. The relative ease of setting up clothing companies, coupled
with the prevalence of developed-country protectionism in this sector, has led to an unparalleled diversity of garment exporters in the third world. Apparel is an ideal industry for examining the dynamics of buyer-driven value chains. Key words: liberalization, Textile and Garment industry, labour-intensive, Buyer-driven value chains, producer-driven value chains, protectionism, and capital and technologyintensive industries
In global capitalism, economic activity is international in scope and global in organization. “Internationalization” refers to the geographic spread of economic activities across national boundaries. As such, it is not a new phenomenon. It has been a prominent feature of the world economy since at least the seventeenth century when colonial powers began to carve up the world in search of raw materials and new markets. “Globalization” is more recent, implying functional integration between internationally dispersed activities.
Industrial and commercial firms have both promoted globalization, establishing two types of international economic networks. One is “producer driven” and the other “buyerdriven”. In producer-driven value chains, large, usually transnational, manufacturers play the central roles in coordinating production networks (including their backward and forward linkages). This is typical of capital- and technology-intensive industries such as automobiles, aircraft, computers, semiconductors and heavy machinery. Buyer-driven value chains are...
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