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Industry Analysis

Textile and
Apparel
Industry
By
Avanthika Musipatla
Dinesh Reddy Vakiti
Kesav Tallapragada
Sarvesh Kumar Gantala
Richa Gour

Introduction
India has improved its ranking to emerge as the second largest textile exporter in
the world beating competitors like Italy, Germany and Bangladesh in calendar year
2013
Worlds second largest producer of textile & apparels
Potential size of Indian textile industry is expected to reach US $223 Billion by

2021.
Textile industry has made major contribution to the national economy
Contributes 14% to industrial production, 4% to GDP and 27% to countries foreign

exchange inflows

Worlds No1. Textile Industry


The Textile Industry is a recognized national precious
stone in China
Chinas textile productionaccounts for nearly 54% of
the worlds total production

Market Size
The Indian textile industry currently estimated around
$108bn is expected to reach $223 billion by 2021.
It has a potential to grow five fold over the next 10
years
It is the second largest employer after agriculture,
providing employment to over 45 million directly and 60
million indirectly.
Textile industry contribute to 5% of GDP and 14% to IIP.
Current industry size comprises $68 bn domestic market
and exports of $40 bn.

Evolution

2014-onwards
2000-2014
1951-2000

1901-1950

1854-1900

No. of mills
increased
from 178 in
1901 to 417
to 1945.

First cotton
textile millMumbai-1854
First cotton mill
of- Ahmedabad1861-Rival

TUFS (Textile
Upgradation fund
scheme) was setup
-1999.

TMC was launched


NTP was
announced-2010

SITP was
implemented to
facilitate setting
up of textile units
with appropriate
set up infra.
Free trade
agreement with
ASEAN countries
and proposed
agreement with
EU Under
discussion.
Restructured
TUFS- Subsidy
cap of USD
420.65 Millions

Make in
India
Campaign
Attract
manufacturer
s and FDI
Under union
budget 201516
Government
has allocated
USD 584.49
million
MeasuresFaster
clearance of
imports &
Exports

PROCESS FLOW IN TEXTILE INDUSTRY

Exports
Textile and apparel exports from India are
expected to increase to US$ 82 billion by
2021 from US$ 40 billion in 2014.
One of the largest contributor to export ,
Contributing 11 % to the countrys total
exports basket
Apparel exports from India have registered a
growth of 17.6 per cent in the period April
September 2014 over the same period in
the previous financial year.
Readymade garments remain the largest
contributor to total textile and apparel
exports from India.
In FY15 the segment had a share of 40 per
cent of all textile and apparel exports.
Cotton and man-made textiles were the
other major contributors with shares of 31
per cent and 16 per cent, respectively.

Source: Ministry of Textiles, Budget 2015

Imports
Import April - December, 2014 (as per DoC data)
Total Textile and Clothing Import US$ 4075.19 million
The domestic textile and apparel industry in India is
expected to reach US $141 billion by 2021.
Source: DGCI&S

GOVERNMENT POLICIES
The Indian textile industry has come up with number of export
promotion policies for textile sector.
100% FDI
TUFS investment of more than INR 2500 billion in the industry.
Scheme for integrated Textile parks provides world class
infrastructure to new textile units.
57 textile parks have been sanctioned with INR 60 million. By 2017,
25 more textile parks have to been sanctioned.
Integrated skill development scheme has provided training to 1.5
million people to cover all the sub sectors of textile such as textile
and apparel, handicrafts, handlooms , jute and sericulture.
R&D incentives

Key Players
Arvind Mills: World class apparel and textiles
organization
2000 Establishes garments exports division lifestyle
apparels
2008 Expands presence in the brands and retail segmentsMega Market
2011 Sets up JV for marketing Tommy Hilfiger brand
2012 Signs distribution agreement with Billabong; acquires
India operations of Debenhams, Next, Nautica
2014 Buys 49% stake in Calvin Klein in India; JV with Goodhill
corporation of Japan for launch of formal suits

Bombay Dyeing
Established in 1879.
2nd largest producer of textiles in India
A prestigious part of Wadia Group 250 Years Old -The company
specializes in stylish linens, towels, home furnishings, leisure
clothing available in over 350 retail or 2000 multi brand stores
Annual Revenue 2500 Crores

Grasim Industries
Started in 1948 Mumbai, Maharashtra
Subsidiary of Aditya Birla Group - 1995
Largest producer of Viscose Rayon.

Raymond Group :

Incorporated in 1925
Indias 4th Largest fabric & fashion retailer
One of leading producers of suiting fabric in the world.
One of largest networks with more than 700 retail shops across
India & overseas.
Company has divested into readymade garments, designer ware,
cosmetics and toiletries.
Revenue INR 14.06 Billion.

Raymond 90 years old Indian textile manufacturing company

with a capacity of 38million meters in wool and wool blended


fabrics
It has 60% market share in worsted suiting in India
It ranks amongst the first three fully integrated manufacturers of
worsted suiting in the world
It exports products to over 55 countries
It is the first to introduce polyester wool viscose in India

Reliance Textiles
Reliance Textiles- Only Vimal - Established in 1932
Indias largest private sector enterprise
Largest polyester yarn & fiber producer in the world.
Vimal Growth drivers are retail presence across india,
innovation & focus on premium products and improved customer
service.
Automated Polyester filament yarn plant at Silvassa.

Performance

Structure

Economics of
Demand:

Conduct

SCP Framework

Porter Five Forces Analysis


Threat of New Entrants
(High)

Bargaining Power
of
Customers
(Moderate)

Competiti
ve Rivalry
(Moderat
e)

Substitute Products
(High)

Bargaining Power
of Suppliers (Low)

Porter Five Forces Analysis


COMPETITIVE RIVALRY
Intense competition between established brands and private
label brands.
Industry

is

highly

fragmented

with

organized

sector

contributing only 31 percent in 2011.

THREAT OF NEW ENTRANTS


100 percent FDI (automatic route) is allowed in the Indian
textile sector
A few large suppliers are focusing on forward integration

SUBSTITUTE PRODUCTS
Low cost substitute products from countries like Pakistan and
Bangladesh
Threat from unorganized sector

BARGAINING POWER OF SUPPLIER


Significant presence of small suppliers has reduced the
bargaining power.
We also find new emerging trends of WHO resulting an effect
on the bargaining power.

BARGAINING POWER OF CUSTOMER


Major clothing brands have better bargaining power over textile
manufacturers, as the product differentiation is low and number
of players are high and fragmented.

SWOT
Strengths
Independent and self-reliant industry that has shown sustainable growth.
One of the largest and oldest industry in India
Abundant raw material availability

Weaknesses
It is a highly fragmented industry
It has high dependence on cotton sector
Lower productivity

Opportunities
There is a growing demand for polyester fabric- grow five fold over next 10
years ; expected to reach US$500 billion.
100% FDI
Increase in disposable income & purchasing power of Indian consumer opens new
product development

Threats
Huge competition from developing countries like China.

Thank you

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