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Presented by:-

Pallavi Gupta 500901036

Shray Jali 500901062

Sumit Sharma 500901063

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Roadmap of the Presentation

Why did we choose the Indian textileindustry?

SWOT Analysis of Indian Textile Industry

Agreements related to textiles

Government initiatives

European Union

India- EU trade relations

Conclusion

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Why Indian Textile Industry?

Sunrise Sector

The textile industry is the one of the largest industries ofmodern India as

it contributes about 14 % to industrial production,

4 % to the country's GDP

17 % to the countrys export earnings

12% share of the country's total exports basket[Source: Annual Report 2009-10 of the Ministry of Textiles]

Single largest employer in the industrial sector employingover 35 million people

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Indian Textile Industry

Indian Textile Industry

tt n Textile

OrganizedSect

r

tt n Mills

DecentralizedSect

r

Handl ms P wer L ms

Man-made Silk len Jute

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Vision

Source: planningcommission.nic

To ensure the growth of the Indian textile industry

at 16 percent per annum in value terms, to US$ 115

billion, by the end of the Eleventh Five Year Plan

(2007-2012)

To secure a 7 percent share in global textile trade by

the end of the Eleventh Five Year Plan.

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Catalysts for exponential growth

Buoyant Domestic economy

Substantial increase in cotton production

Government Policies

TUFS Quotas

Expiration of MFA on 31st Dec 2004

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Problems andChallenges

Sickness

Obsolete Technology

Cotton grown per hectare of land is

very low

Competition from man-made fibers

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FDI in TextilesFDI in Textiles

[Source: cci.in]

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Apparel Export Promotion Council (AEPC)

Sponsored by Ministry of Textile

Monitors Quotas and conducts trade fairs

Cotton Textile Export Promotion Council

Autonomous, non-profit export promotion council

International face of Indian textile

Handloom Export Promotion Council

Statutory body

Indian Silk Export Promotion Council

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Strengths

Independent and self-reliant

Vertical and horizontal integrated textile value

chain

Globally competitive spinning industry

Low wages

Unique strength in traditional handlooms and

handicrafts

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Weaknesses

Highly fragmented and technology backward textile

processing sector

Except spinning, all other segments are predominantly in

decentralized sector

Rigid labour laws

Infrastructural bottlenecks in terms of power, utility, road

transport, port handling capacities etc.

Higher taxes and interest rates

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Opportunities

Large potential domestic and international market

Revolution in organized retailing

Increased disposable income

Availability of cheap finance

Emerging retail stores and malls

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Global recession triggered by a weakening dollar

Higher competition from China, Pakistan, Bangladesh

Non-availability of indigenous textile machinery.

Lack of domestic capital

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On January 1st 1974, the Arrangement Regarding

the International Trade in Textiles known as the

MFA came into force.

Non-Tariff Barriers

Short term agreement

Agreement on Textiles and Clothing (ATC)

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In 1993, a study found that the price of cotton yarn per kilo

was cheapest in India at US$ 2.79

In US textile and apparel imports, China and Hong Kong had

higher market shares than India.

The effect of trade liberalization on India :

increased output

employment

increased profits

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Introduced on 1999

To overcome technological obsolescence and create

economies of scale

Transition from quantitatively restricted textiles trade

to market-driven global merchandise

Crucial for all the inter-connecting sectors such as

spinning, weaving, knitting, processing and garmenting

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Launched to create new textile parks of

international standards.

Merging ofAPE & TCIDS Objective: to provide the industry with world-

class infrastructure .

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Birth of European Union

After the second world

war, Politicians in

several countries of Europe were convinced

that the only way

prevent another war in

Europe is to unite thecountries economically

and politically

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Single currency managed by European

Central Bank (12/27 members)

Free movement of persons, goods, services

and capital

Common Agricultural, Trade, Fisheries,

Foreign and Security Policy

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The year 2009 marked 46 years of formal

relations between India and the EU.

India is one of the growing economies.

The EU is Indias first and largest partner.

India-EU Round Table is a significant steps

towards greater mutual cooperation in all

fields.

EU AND INDIAEU AND INDIA

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EUEU--INDIA Merchandise TradeINDIA Merchandise Trade

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In 2004 India became one ofthe few EU strategicpartners.

In addition to multilateral and bilateral negotiations

with India, the European Commission works on a

day to day basis.

To assist India in continuing its efforts to better

integrate into the world economy.

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The EUThe EU--IndiaIndia FTAFTA

India was an obvious partner for

one of the new generation of

EU FTAs launched as part of

the Global Europe strategy in 2006.

Negotiations for such FTA were

launched in June 2007 and, so far,

nine negotiating rounds have beenheld.

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EU-India trade has grown impressively over the years.

The EU accounts

1. 21% of Indias total exports

2. 16% of Indias total imports.

India accounts for a more limited but rapidly growing share

of EU trade:

1. 2.4% of EUs total exports

2. 1.9 % of the EUs total imports.

India ranked 10th in the list of the EUs main trading partners

in 2008, up from 15th in 2002.

INDIA TRADE WITH EUINDIA TRADE WITH EU

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EU-India trade:-

28.6billion in 2003 to over 55billion in 2007.

EU investment to India:-

759million IN 2003 to 2.4billion in 2006. EU- India trade in commercial services:-

5.2billion in 2002 to 12.2billion in 2006

Trade in goods

EU goods exports to India 2009: 27.5 billion

EU goods imports from India 2009: 25.4 billion

Trade in services

EU services exports to India 2009: 8.6 billion

EU services imports from India 2009: 7.4 billion

Foreign Direct Investment

EU outward investment to India 2009: 3.2 billion

Indian inward investment to EU 2009: 0.4 billion

EU technical and financial trade assistance to India

13.4million

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In 2003, the overall global trade in textiles and clothing amounted

to US $ 385 billion, of which textiles alone contributed 43%.

Developed countries contribute about one third of the

total global exports of textile and clothing.

List of products and services which are exported from India.

Indias export stats to the world.

India Export to EU.

Global Trade in Textile and ClothingGlobal Trade in Textile and Clothing

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Effects Of The Economic Crisis Since 2008Effects Of The Economic Crisis Since 2008

Production as well as consumption levels have experienced a

sharp decrease from June 2008 to June 2009.

For the entire year 2009 a general decrease of 11% .

EU Textile and Clothing export figures, exports have

decreased by 17% with a decline of textile exports by 18% and

by 16% of clothing exports.

Since July 2009 a slow stabilization of these levels can be

observed and since January 2010 a recovery is observed.

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Exporting, 5

5%

ot

xporting,

5%

According to FICCI, 71% of participating companies have said their

organization perceives the EU as an important export market.

Present status of doing business with central and Eastern Europe,

according to industry response:-

Plans for exporting the EU, Of the companies that are not presently

exporting to the EU , 85% intent to export to this region in the near future.

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According to FICCI, 71% of participating companies have said their

organization perceives the EU as an important export market.

Present status of doing business with central and Eastern

Europe, according to industry response:-

Plans for exporting the EU, Of the companies that are not presently

exporting to the EU , 85% intent to export to this region in the near future.

Exporting, 55%

Not

exporting, 45%

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There are tremendous opportunities. As per FICCI Indias

trade volume with each country can easily de doubled

in less than three year.

Uniform trade regulations.

A uniform duty structure.

Common technical specification.

In those countries that have joined the EU there is a

big possibility of entering into joint ventures

as well as outsourcing services from these countries.

Good time to set up representative offices in these

countries and undertake tailor-made marketing

campaigns.

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Invest in research and development.

India needs to move from the lower-end markets.

The government also needs to make policy changeslike dereserving the small-scale sector.

Handlooms by their very nature can adopt a strategyof niche marketing.

Need for a cradle-to-grave approach.

Efficiency and output of handloom and power loom

sectors also needs to be increased.

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commerce.nic.in

wto.org

planningcommission.nic texmin.nic.in

aepcindia.com

worldtradelaw.net

ec.europa.eu

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