The Indian Textile Industry in 2005


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : BSTR163 For delivery in electronic format: Rs. 700;
For delivery through courier (within India): Rs. 700 + Rs. 25 for Shipping & Handling Charges

Themes

Industry Analysis | Growth Strategy | Competition
Case Length : 20 Pages
Period : 2005
Organization : -
Pub Date : 2005
Teaching Note : Not Available
Countries : India
Industry : Textile, Apparel, and Accessories

Abstract:

The Multi Fibre Arrangement (MFA) that came to an end on January 1, 2005 has opened up a plethora of opportunities for the Indian textile industry. With textiles accounting for almost 20 percent of Indian exports, and the industry and allied areas providing employment to around 80 million people in India, the Indian government is turning its attention to removing the bottlenecks that hinder its growth.

The Indian textile industry has the advantages of high operational efficiencies in spinning and weaving, low-cost skilled labour, availability of raw materials and design capabilities.

Yet, infrastructural bottlenecks like the transaction time at ports, inland transportation time, lack of initiative by textile manufacturers to go in for technological upgradation, fragmentation of the Indian textile industry etc., have been limiting the growth of the industry.

Analysts have a few recommendations to make on ways to increase the competitiveness of the Indian textile industry. The government should encourage the closure of non-competitive mills; and exporters should move up the value chain by focusing on apparel exports rather than fibre exports. Also, Indian companies should acquire companies abroad to gain direct entry into markets for value-added products in the European, Japanese, and US markets.

Issues:

» The evolution of the Indian textile industry.

» The different factors that determine the structure of the industry.

» The strengths and weaknesses of the Indian textile industry.

» The opportunities for the Indian textile industry under the new global textile regime.

» The chief challenges faced by the Indian textile industry and how these challenges may be met.

» The outlook for the industry and to discuss consolidation as an option for the future.

Contents:

  Page No.
Introduction 1
Competitiveness of Indian Textile Industry 2
The Chinese Factor 7
Conclusion 12
Exhibits/Figures 14

Keywords:

Indian textile industry, Multi Fibre Arrangement (MFA), Apparel exports, Cotton textile exports, Import quota restriction, Confederation of Indian Industry (CII), Value chain, KSA Technopak, Technology Upgradation Fund Scheme (TUFS), Vision 2010, Reliance Industries, Indorama Synthetics India, NAFTA (North American Free Trade Agreement), WTO (World Trade Organisation), Arvind Mills

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