Industry Analysis of Textile Industry

Topics: Cotton, Textile, Textile manufacturing Pages: 15 (4478 words) Published: November 3, 2008

The Indian Industry as a whole has given away a growth which is of positive but comparatively less than the previous year. For instance the Industry registered a growth of 7% in the month of April 2008 as compared to 11% growth registered in the same month of the previous year. In March 2008 industrial growth which was recorded was 3.9% the lowest in past 6 years. The growth slipped due to the sharp downfall in the manufacturing and specifically electrical sector to 7.5% and 1.4% respectively from a high of 12.4% and 8.7% respectively clocked in April 2007.


The textile industry holds significant status in the India. Textile industry provides one of the most fundamental necessities of the people. It is an independent industry, from the basic requirement of raw materials to the final products, with huge value-addition at every stage of processing. Today textile sector accounts for nearly 14% of the total industrial output. Indian fabric is in demand with its ethnic, earthly colored and many textures. The textile sector accounts about 30% in the total export. The textile industry is the largest industry in terms of employment economy, expected to generate 12 million new jobs by 2010. It generates massive potential for employment in the sectors from agricultural to industrial. Employment opportunities are created when cotton is cultivated. It does not need any exclusive Government support even at present to go further. Only thing needed is to give some directions to organize people to get enough share of the profit to spearhead development.

Position of the Indian Textile Industry in the World Textile Economy India contributes 20% to world spindleage capacity, the second highest spindleage in the world after China. It contributes 6% to the world rotorage and 62% to the world loomage. However in High-tech Shuttless Looms this industry’s contribution is only 4.1% to the world Shuttless loomage. 12% to the world production of textile fibres and yarns is from India and is the largest producer of Jute, second largest producer of silk and cellulose fibre / yarn, third largest producer of cotton and fifth largest producer of synthetic fibres / yarns. India’s key assets include a large and low-cost labour force, sizable supply of fabric, sufficiency in raw material and spinning capacities. On the basis of these strengths, India will become a major outsourcing hub for foreign manufacturers and retailers, with composite mills and large integrated firms being their preferred partners. It will thus be essential for SMEs to align with these firms, that can ensure a market for their products and new orders.



Economic trends can and do affect the industry performance. This indicates that the economic cycle of India is directly proportional to its business cycle. Now let us have a fleeting look over the GDP growth rate of the manufacturing industry sector over the years from 2002 to today

The value of 2008-09 is estimated to be 7.3

Having seen the real time growth rate of the manufacturing industry, lets now see the pattern of how a business or economic cycle looks in fig 2.


There are 5 white spots indicating 5 different stages in a business cycle. The first spot is when the growth is about to fall to its minimum. In this case sectors like financial sectors will dominate as the investors will seek financial advisors for investing in a declining market and another reason is that the companies due to their declining profits start getting loans from bank and this becomes an added advantage to the financial sector. In figure 1, the GDP of 2002-03 year shows this kind of behaviour. The second spot is the lowest state after which the growth rate starts increasing. The third spot indicates the stage where the growth rate keeps...
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