The Indian Textile Industry in 2005
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Case Details:
Case Code : BSTR163
Case Length : 20
Pages Period : 2005
Organization : -
Pub Date : 2005
Teaching Note :Not Available
Countries : India
Industry : Textile
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Excerpts
The Chinese Factor
Trade pacts like NAFTA have given countries like Mexico an
advantage over India when competing in the US market. Mexico has close to 30%
share in categories 347 and 348, while India's share in these two categories is
around 1% (Refer Table IV). India has lagged behind neighboring countries like
China, Bangladesh, Sri Lanka and Pakistan for items like 339, 347 and 348 (Refer
Table V).
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In terms of exports of apparel to the US (in value terms) in 2003-04, the
countries that figure in the top 15 in order of their ranks are Mexico, China,
Hong Kong, India, Honduras, Dominican Republic, Bangladesh, Korea, Indonesia,
Thailand, Philippines, El Salvador, Taiwan, Pakistan and Turkey.
These countries together had a market share of 60.2 per cent in volume terms
while they had a value share of 35.2 per cent of the US apparel imports. The
average Unit Value Realization (UVR) of India has been rising through the years
(Refer Table VI) and India has the highest UVR among the top 15 suppliers.
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The immediate competitors at close ranges were China, Hong Kong, Korea,
Thailand and Pakistan. India's Asian neighbours UVR rates have been falling,
except for China which has been consolidating its position over the years...
Conclusion
The N K Singh Committee on Investment & Growth of the Textile
Industry has suggested creating a Textile Industry Reconstruction Fund with an
initial corpus of Rs.30 billion for financial restructuring of the textile
industry.
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In 2004,
the textile ministry recommended the abolition of the textiles committee
cess, changes in the duty structure for synthetic yarn and reduction in
the customs duty for remaining textile machinery to 5 per cent.
"Among measures for reining in raw material costs is lowering of import
duty of cotton from 10% to 5% immediately and progressively reducing the
same to zero. Existing biases against manmade fibres by way of
rationalization of excise duties in line with those leviable on cotton
yarn and lower import duties on raw material used to manufacture
synthetic yarn need to be removed on a priority basis," said Bhasin... |
Exhibits/Figures
Exhibit I: The Multi-Fibre Arrangement (MFA)
Figure I: Direction of Apparel Exports from India in 2004
Figure II: Labour As A Percentage Of Total Cost
Figure III: Export Fabric Mix 2003-04 (%)
Figure IV (a): Moving Averages for Indian Rayon at National Stock Exchange (NSE)
Figure IV (b): Moving Averages for Arvind Mills Ltd at National Stock Exchange (NSE)
Figure IV (c): Moving Averages for Raymond Ltd. at National Stock Exchange (NSE)
Figure IV (d): Moving Averages for Mahavir Spinning Mills Ltd. at National Stock
Exchange (NSE)
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