PROFILE OF INDIAN TEXTILE INDUSTRY

The textile industry is one of the most important part of the Indian economy. It contributes 4% to GDP and around 35% to gross foreign exchange earnings in merchandise trade. The Rs.1,300 billion (US$ 25 billion) industry accounts for 20% of the country’s industrial output and provides direct employment to about 35 million people, the second largest after agriculture. It also provides indirect employment to another 47 million people.

India has 19% of World’s spindleage with 34 million spindles, 395,000 rotors and 2 million looms. In terms of output, India accounts for 10% of World’s cotton yarn production and 15% of cotton fabric. The powerloom sector with 428,600 units has 1.91 million looms. In terms of output, the powerloom sector produces over 60% of all cloth produced in the country. The mill sector produces only 3% of cloth while the hosiery sector’s output accounts for 20% of total cloth production. The handloom sector with 3.89 million looms produces 13% of all cloths. Of the total cloth production in India, about 45% is made of cotton and only 13% in weaved with blended yarn. The rest, 40% is made up of 100% non-cotton yarn.

Textiles production increased handsomely by 8% in 2005-06 (measured in terms of Index of Industrial Production, Central Statistics Organization), over and above the 9% growth clocked in 2004-05. Such back to back high growth was last recorded in 1995-96 and 1996-97 when the increases were in double digits.

The growth of 2005-06 was led by 16% increase in the other textile product group, including apparels. Cotton textiles production too was up by 8.5%. Cotton textiles account for almost half of textiles industry in the country. In 2004-05 cotton textile production had risen by close to 8%, but the performance was dismal prior to that year. Production declined on three occasions during the period 2000-01 to 2003-04. The annual growth averaged a mere 0.5% in that period. On the other hand, production of other textile products, including apparels, increased significantly by 14% in 2002-03 and repeated the feat in 2004-05 by increasing at 19%.

Man-made fibers, wool and silk segment grew by modest 4.5% per annum during the 5-year period 2000-01 to 2005-06.

During the first year of quota-free global trade production increased leaps and bounds. Textiles production increased 10% over 2004. The growth was fuelled by a 22% rise in production of other textiles (including apparels). Cotton textile also posted an increase of 9%.