The Indian Textile Industry in 2005

India produces all varieties of cotton. In 2003-04, the industry accounted for 21 per cent of global spinning capacity and 33 per cent of global weaving capacity. The industry contributed about 25 per cent share of the world trade in cotton yarn.

The industry has high levels of operational efficiencies in spinning and weaving: around 96% for spinning and 85-90% for weaving. The skilled manpower available in India has been relatively low-cost in an industry where labour contributes the largest component of manufacturing cost in textiles (Refer Figure II for data on labour cost component of textile units of various countries).

The wide availability of skilled labour in India has been another differentiator. India has been adept at traditional apparel-making skills like embroidery, mirror work and beading, design and at making complex garments. Some Chinese buyers are planning to manufacture part of their value added products in India. There are training institutions like the National Institute of Fashion Technology, which produces nearly 1000 graduates a year, and this has enhanced design capabilities of India in the fashion industry.

The government is encouraging the textile sector through a liberal policy on external borrowings and concessions on capital goods imports for the textile industry.