The Textile Industry and Exports in Post-Liberalization India

Rahul Dhiman

• Publisher: Routledge India
• Year: 2020
• ISBN:
  9781000076127
• Edition: 1
• Topic: Economia
• Subtopic: Esportazioni e importazioni

This book is a comprehensive examination of the Indian textile industry and the various determinants affecting its export performance, trends in labour, and capital productivity in the post-liberalization years. Employing 45 million people, including skilled and unskilled workers, the Indian textile and clothing industry occupies a significant position in the Indian economy in terms of industrial production, employment, and exports.

This work traces the growth and expansion of this industry in the post-reform period and studies its contributions to the economic development of the nation. It discusses global trade agreements, India's share in international exports, and its major trading partners across the globe including the USA, UK, UAE, Germany, China. It also provides recommendations to Indian policy makers for a possible improvement in the textile exports across the globe.

The Textile Industry and Exports in Post-Liberalization India will be of interest to students and researchers of politics and international relations, economics, development studies, labour economics, sociology and social policy, and South Asian studies.

1 An introductory note about the Indian textile and clothing industry

Introduction

The Indian textile and clothing industry is one of the largest industries of modern India and also the largest foreign-exchange-earner of the nation. The introductory chapter of this volume deals with historical overview of the Indian textile industry, key agreements and policies, contribution of the textile industry in economic development, and major issues of industry. This volume shall make an effort to address export performance, direction, and various determinants affecting the export performance of the Indian textile industry in the following chapters.

The textile and apparel industry in India enjoys a rich heritage, as it was the well-organized industry that came up in India first. A country like India which has abundant availability of raw materials has always been recognized for textile goods since very ancient times. The textile industry is among the leading sectors that have been regarded as the route to the industrial development by many nations across the world. This industry has the power to transform a country from poverty to prosperity provided continuous steps are undertaken by the government. This sector has played a crucial part in achieving high economic growth, offering employment opportunities, growth in industrial production, and bringing foreign exchange reserves. The textile industry also contributes to the total export basket. The commencement of globalization of trade and economic liberalization in India posed new challenges as well as opportunities for the textile firms in India. The economic reforms since 1991 have brought a new regime for the textile and clothing sector, and much-needed action plans were undertaken to boost the exports. The reforms identified the major role of the textile industry to ensure growth in apparel manufacturing of satisfactory quality at realistic prices in order to meet the clothing needs of increasing people. The policy reforms visualized that this crucial aim could be achieved through efficiencies in the cost and free participation of market forces.

Historical overview of the Indian textile industry

The products of the textile industry are utilized by everyone. The process of the textile industry starts from the stage of manufacturing raw materials to the manufacture of a broad range of semi-finished as well as finished products. The raw material of the industry comprises natural and man-made fibres. In the period before colonization, the manually operated textile machines of India were among the best across the globe and served as replicas of the manufacture of the textile machines in Britain and Germany (Roy, 1996). The Indian textile industry had gone through tough times during the colonial regime. However, the industry was revived in the 19th century, when the first textile mill in the nation was introduced in Calcutta near Fort Gloster in 1818. The development of the textile industry in the country started gaining momentum due to the accessibility of home-grown cotton and British machinery. The textile commodities were very competitive during this period, and the British knew that they were unable to compete with it. Tariffs were designed in such a manner that the British goods would go through the Indian market almost free of cost. However, the products of India were kept out of the market of Britain. This arrangement stayed in place until the fight for independence began in India. The major activities related to the textile and clothing industry are outlined as mentioned below:

• The management of raw materials, i.e. manufacturing fibres like cotton, flax, silk, wool, jute, etc. Man-made fibres comprise a variety of textile fibres and production of yarns through spinning. The natural cellulosic fibres, synthetic fibres, and fibres from inorganic materials such as carbon, glass, and metal.
• The activities related to knitting and weaving.
• The finishing actions for the purpose of providing fabrics the visual and physical properties to meet the demands of consumers such as bleaching, printing, dyeing, impregnating, etc.
• The last activity converts these fabrics into finished products, such as clothing products, carpets and other textile floor coverings, common household textile products such as kitchen linen, bed linen, toilet linen, curtains, etc.

The textile sector of India can broadly be categorized as (i) organized mill sector and (ii) unorganized decentralized sector. The organized mill sector comprises an updated and highly mechanized mill sector. Spinning mill and composite mill are two types of such mills. A composite mill is a place where the activities of spinning, weaving, and processing are performed under one roof. The decentralized mill sector has insufficient organizational setup in terms of updated technology or machinery requirements, production pattern, employment, etc. The unorganized mill sector is occupied primarily in performing activity related to weaving. As a result, it gets a great deal reliant on the organized mill in order to m...