This is again from my own industry where I work, not only we produce word class Linen fabric at Aditya Birla Nuvo Ltd. (Unit: Jayashree Textiles Ltd.) from pure European flax fibre but also export the finest quality of flax yarn as well as textiles.

We cater to the top notch apparel and garment manufaturere for their international as well as domestic brands. Being in export market we are facing the same hurdle these days from which there is current slow down in the industry.

Facts about textile industry in India

Export target of India for current year is $25 bn but the trends shows it can barely hit a $18 bn. Despite the facts that India is the second largest textile and cotton yarn (threads) producer of world. Over 60% of world’s installed looms and 22% of the global spindles are in India. Its wage rates are barely 40 to 50% of the wages in developed countries. But current share of India in global apparel and textiles market is only $14 bn (global market $450 bn) – just 3%.

Our industry has often been hyped as the industry of promise, for driving job creation, exports earnings and industrial growth in the economy. So now why this slowdown next. In my earlier article about this sector I had discussed about the rupee value appreciation against the dollar over the past few months, and thus textile industry is back crying for government intervention and an unending supply of incentives.

So there does the problem lies - The Industry structure which is too fragmented and consists of too many small players who have not bothered to either create sustainable and strong brands or even create markets for themselves. According to a background paper on the industry prepared by the India Brand Equity Foundation in 2006, “India’s textile industry comprises mostly small-scale, non-integrated spinning, weaving, finishing, and apparel making enterprises.” The operative term is “non-integrated”.

For example, at the bottom end of the chain, at the spinning level alone, there are 1,135 small scale and 1,564 large units. In the weaving/knitting segment, there are 3.9 million hand loom units, 1.8 million power loom units, and only 0.1 million units in the organized sector.

In addition, there are 2,100 processing units and 77,000 units (mostly small scale) in the garment/ apparel segment. No wonder, despite the presence of so many weavers/ knitters, India’s fabric imports from both the US and EU have grown over the years. This fractured condition is also reflected in the large number of export promotion councils and industry associations.

What this clearly shows is that the industry needs composite mills with scales of economy (For example Jayashree Textiles Ltd). Tragically, there are about only 280 large mills, that can loosely be called composite mills, integrating the entire chain of spinning, weaving and sometimes even fabric finishing. But, they account for only about 3% of industry output.

The government has made many announcements to remedy some of the problems of textile industry. The prime minister has suggested the setting up of a committee comprising members from the ministries of finance, textile, commerce and industry, National Manufacturing Competition Council and various industry leaders to figure out a “durable, productive and pragmatic solution to the problems of the textile industry”.