Textiles
The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output. Employment generation and the export earnings of the country. Currently, it contributes about 14 per cent to industrial production, 4 per cent to the GDP, and 16.63 per cent to the country's export earnings. It provides direct employment to over 35 million people, which includes a substantial number of SC/ST, and women. The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.
The Indian textiles industry is in a stronger position than it was in the last six decades. The industry which was growing at 3-4 per cent during the last six decades has now accelerated to an annual growth rate of 16 per cent in value and should reach the level of US $ 115 billion (exports US $ 55 billion; domestic market US $ 60 billion) by 2012.
This is manifested by consistent increase in production of fabric and per capita availability of cloth. During 2006-07, the total production of fabric is estimated at 53 billion sq meters, compared to 50 billion sq meters in 2005-06 and 45 billion sq meters in 2004-05. During 2006-07, the per capita availability of cloth was 39.60 sq meters, compared to 36.10 sq meters in 2005-06 and 33.10 sq meters in 2004-05.
The catalyst for this exponential growth is a buoyant domestic economy, substantial increase in cotton production, a conducive policy environment provided in the Government, and the end of the Multi Fibre Agreement (MFA), on December 31, 2004. The rationalization of fiscal duties undertaken during the last three years has also provided a level playing field in all segments of the industry, resulting in the holistic growth of the industry. A strong foundation for industry has been laid on which world class manufacturing units can realize their full potential and make a mark in the international economy.
Plan Allocation
In 2007-08, the Plan allocation of textiles was Rs. 2,243 crore, which was 66.21% higher than that of the previous year-second only to the Department of Secondary Education & Higher Education, Ministry of Human Resource Development. In 2008-09, the Plan Allocation has shot up by over 11.45% (Rs. 2,500 crore) over a much larger base.
Investments
Investments have increased significantly in the textiles sector, and are expected to touch Rs. 1,50,600 crore by 2012. This enhanced investment will generate 17.37 million jobs (comprising 12.02 million direct and 5.35 million indirect jobs) by 2012. Investment in the textiles and clothing sector in the past three years increased from Rs. 4.349 crore in 2004-05 to Rs. 15,032 crore in 2005-06, and Rs. 79,100 crore in 2006-07. The total investment between 2004-07 was Rs. 1,01,481 crore.
Exports
The Indian textiles and clothing industry is the cornerstone of the national economy and textiles contribute substantially to the country's export. In retrospect, it can be said that the 90s were a watershed period for the Indian textiles export. This was the time when, in anticipation of the termination of the Multi-Fibre Arrangement (MFA), the industry started scaling up, improving efficiencies and modernizing technologies. Within the year of the MFA regime coming to a close on December 31, 2004, Indian exports grew at a rate of 22%. Though, this growth rate slowed down in subsequent years, opportunities in the shape of newer, larger markets, and products have remained. The exports of textiles and clothing during 2004-05, 2005-06 and 2006-07 were US$ 14 billion, US$ 17.52 billion and US$ 18.73 billion, respectively. These were US$ 21.46 billion in 2007-08, registering a growth of 12.10% in dollar terms.
Apparel & Clothing
The Clothing sector is an export intensive sub-sector and contributes about 40-45% to total textiles exports. It is a low investment and highly labour intensive industry: an investment of Rs. 1.00 lakh in the sub-sector creates 6-8 jobs.
The growth of the garment industry had been hamstrung by the reservation of garment manufacture for the small-scale industry. As a result, garment units could neither attain optimal economies of scale, nor produce international quality garments.
Keeping in view the changed situation, the Government de-reserved the woven apparel sector in 2002-03, and the knit-wear sector in 2005-06. The industry picked up momentum during the Xth Five Year Plan. It initially grew at 15-16 per cent and, during 2005-06, the growth increased to about 20-22 per cent. The catalyst for this accelerated growth rate was the end of the quota regime in the international market, growth in organized retailing, growing consumerism in the domestic market, and a favourable policy regime.
During the Xth Five Year Plan, exports of readymade garments increased at the annualised rate of growth of 13.72%. Major change was witnessed in 2005-06. When it increased by 28 per cent.The investment requirement of this sub-sector by 2012 will be Rs. 21.800.00 crores, and will create incremental employment for a 56.40 lakh workforce, of which 28.25 lakh will be semi-skilled, and 11.30 lakh un-skilled. Seeing employment and export potential in apparel and clothing sub-sector, the Government will give priority to ensure its development and expansion. Efforts will be made to reform rigid labour Laws, and Brand promotion through the Public Private Partnership route. Fashion hubs will be set-up to provide Common Data, and marketing outlets to the industry.
Technology Upgradation
Technology Upgradation Funds Scheme (TUFS)
The Indian Textiles Industry has, suffered from severe technology obsolescence and lack of economies of scale, which in turn diluted its productivity, quality and cost effectiveness, despite distinctive advantages in raw material, knowledge base, and skilled human resources.
Given the significance of textiles industry to the overall state of the Indian economy, its employment potential and the huge backlog of technology upgradation, it was felt that to sustain and improve its competitiveness and overall long term viability, it is essential that the textiles industry has access to timely and adequate capital, internationally comparable rates of interest.
Source: National Portal Content Management Team, Reviewed on: 23-03-2009 
