Swot Analysis Oh Indian Textile Industry

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  • Topic: Textile industry, Economics, Textile manufacturing
  • Pages : 6 (1619 words )
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  • Published : August 19, 2010
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SWOT analysis of the Indian textiles industry:
We now do a SWOT analysis of the Indian textile industry keeping in mind the global changes that have taken place in the post quota regime.

STRENGTHS-
1. Abundant raw material
2. Low cost skilled labour
3. Presence across the value chain
4. Growing domestic market
5. Strong backward integration
6. Third largest cotton producer as well a the largest area under cultivation 7. Increasing presence across entire value chain
8. Cheap and skilled manpower
9. Sharp reduction in borrowing costs
10. Recent government efforts to promote the industry.
11. Truly vertically integrated from raw material to finished products. 12. Steadily diversified its raw material base to include man-made fibres such as Polyester, viscose, acrylic, polypropylene etc. as well as other natural fibres 13. Flexible in terms of production quantity and lead time.

WEAKNESS:

1. Fragmented industry
2. Effect of historical govt policies
3. Lower productivity and cost competitiveness
4. Tech obsolescence. Quality is not consistent
5. Caters mainly to the low-end class.
6. Low level of training.
7. The export-import policy of India changes too frequently due to which it becomes very difficult for importers to import goods. 8. Delay in delivering the goods at the right time.
9. Lack of economies of scale and advance processing capabilities.

OPPORTUNITIES:
1. Huge demand for value added goods in all major countries. 2. Relocation from high cost economies.
3. Large and relatively untapped domestic market
4. Large Indian Expatriate community. Hence there is large demand for Indian Garments.
5. Rate of import duties is minimal.
6. Bilateral Agreements on Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to taxes on income and capital have further opened the Opportunity for higher export for the garment sector.

7. Extensive commercial interactions have greatly helped in laying the foundation for the development of a multi-dimensional relationship between India and the US. 8. India appears to be a competitive and sustainable hub of production globally, and therefore manufacture-suppliers are investing in India as a growing market 9. India is also an emerging market for used and refurbished machinery.

THREATS:

1. Competition in domestic market
2. Economic and social awareness
3. Regional awareness
4. Developed countries are bound to increase the non-tariff barriers like safeguard measures and anti-dumping duties to protect their domestic industries. 5. Creation of trade blocks on the lines of EU and NAFTA, which runs against the free and fair trade. 6. Tariff on most of the industrial items have been decreased by 38 percent as against 22 percent deduction in case of readymade garments. The tariff imposed by most of the developed nations is very high in case of textiles. 7. Not enough quotas to utilize its fullest potential.

PEST Analysis:
Political Factor:
Uneven political conditions, deteriorating law and order situation and instability in gas and electricity prices are adversely affecting the textile sector, while government has hardly taken any step to give some relief or incentives to the mill owners. Textile mill owners and exporter have strongly denounced the recent increase in the gasoline prices and demanded from the government to withdraw the recent increase and take serious steps to help textile industry survive through difficult times According to the sources, if prices continue to increase at current rate, the textile industry would find it difficult to survive as the recent increase has already proven deadly and many mills have started to shutdown in the wake huge price increase. It was also witnessed that due to prices increase in gas has not only adversely affected the productivity of the textile industry but has also caused sudden increase in the production cost and has badly affected the economy of the country. On the other hand,...
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