Page 1 of 20
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 06
July 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 103
Indian Textile Industry: A SWOT analysis
Madhu Malti Sharma*& Shallu Sehgal**
*Research Scholar, Department of Economics, University of Jammu,(J&K), India.
**Assistant Professor, Department of Economics, University of Jammu,(J&K).India.
madhumaltiju@gmail.com ; drshallusehgal@gmail.com
Abstract:
SWOT analysis is a part of strategic planning
process attempted to identify the strengths,
weakness, objectives and threats. It aims at
identifying and analyzing key or critical success
factors or variables in order to formulate
policies keeping in view these variables. This
paper intends to identify the significance of
Textile industry in Indian economy particularly
with respect to its strengths, weakness
objectives and threats and trace out the impact
of quota removal on Indian textile industry.
Removal of quota has given some stimulus to
the Indian textile industry but it has also
increased competition in the international
market especially among developing countries
of Asian nations which have comparative
advantage in textile sector.
Keywords: Textile Industry, SWOT, Multi-fibre
Agreement, quota removal
Introduction:
Textile industry is one of the oldest and most
global industries in the world. It is starter
industry for labour intensive developing
countries going for export oriented
industrialization. It provides an opportunity to
low income countries for the diversified
expansion of manufacturing exports and exploit
the labour cost advantages to fulfill market
demand. Textile industry has played a crucial
role in the early phase of industrialization in
United Kingdom, Japan, North America and
recently in growth of East Asian economies.
Industrial revolution in England started with
rise of textile manufacturing before spreading
to other sectors. Later textile sector again
played an important role in development of
manufacturing of East Asian nations which
emerged as East Asian miracle. The production
and exports of textile and clothing industry at
global level has increased many fold with world
trade of textile and clothing increased from US$
310 billion in 1995 to $ 270 billion in 2012(
Sachit Jain, Vardhman group, 2010). Indian
textile industry is one of the leading industries
of Indian economy and has important place in
industrial cluster of India. India has been
known for its textile products since ancient
times but the traditional textile industry in India
virtually decayed under the colonial rule of
British. However the modern textile industry
Page 2 of 20
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 06
July 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 104
emerged in early ninth century with the
establishment of first textile mill in Calcutta in
1818. The cotton textile industry made its
beginning in Bombay in 1850s. Cotton textile
industry made rapid progress during nineteenth
century but suffered in the first half of 20th
century due to famines and partition of India.
After independence Indian textile industry
made rapid progress under different plans and
expanded its capacity many fold. India is now
the second largest producer of textiles and
garments after china. India is a traditional
textile producing country with its export quality
and volume expanding over time. Textile
industry accounts for 14% of industrial
production, 4% of GDP, employs 45 million
people and contributes 12% of the total export
earnings (Ministry of Textile, International
trade division updated on 3/11/2014). After
agriculture textile industry provides
employment to maximum number of people
and has emerged as alternative employment
avenue to low-wage earning workers in
agriculture and service jobs especially women
and unskilled workers. Low skill requirement
and huge labour absorption potential have made
it an important source of non-agrarian
employment particularly in rural areas. Textile
industry provides employment to 45milloin
people and is projected to employ up to 52
million people by the year 2017 (Textile
commission).
India is among the major exporting
countries as far textile sector is concerned.
Textile industry is the only industry that is self
sufficient and complete in value chain i.e. from
production of fiber to finished garment products
(Samar Verma, 2002). India is the third largest
exporter of textile, in global textile trade, after
china and EU. The working group, on boosting
India’s manufacturing exports during 12th five
year plan envisages India’s textile and clothing
exports to surge up to $64.41 billion by 2017.
Structure and composition of Indian Textile
Industry:
Indian textile industry is vertically integrated
covering a wide range of activities from
production of basic raw material like jute,
cotton, silk and wool to manufacturing of
varieties of synthetic and man-made fibres and
to the provision of higher value added
consumer products such as fabrics and
garments. The current market size of Indian
textile industry is estimated at around
US$108bn. comprising domestic market of US$
68 billion (bn) and exports of US$ 40bn. and is
expected to reach US$ 141bn by 2021. The
industry realized export earning of US$ 41.57
bn in 2013-14 (Indian brand equity foundation
Page 3 of 20
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 06
July 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 105
www.ibef.org).The textile industry is divided
into two broad segments i.e. unorganized
segment covering handloom, handicraft,
sericulture, power loom and organized
including spinning, apparel and garments.
Indian Textile industry is highly diversified and
complex ranging from hand spun khadi and
traditional textile woven on handloom at
cottage industry to highly capital intensive mill
sector and synthetic fibre manufacturing hubs.
Strong position of India in terms of textile
sector makes it interesting to have a brief look
at the strengths of Indian textile industry,
analyze its weaknesses, search for new
opportunities particularly after the phasing out
of MFA(Multi fibre agreement) and look for
possible global threats and way to deal with it.
The paper attempts to explore above stated
issues and try to give relevant suggestions.
Indian Textile industry has strong presence in
entire value chain right from spinning to
finished textile. Most of the Yarn production
originates from organized spinning mills. No of
spinning units has increased from 2867 in 2001
to 3278 in 2013(office of textile commissioner,
Textile Industry value chain
Raw materials
Yarn
Fabrics
Finished Textiles
Spinning
Weaving/Knitting
Processing cutting/stitching
