Exports of Knitted and Crotchet Ed Fabrics

7/31/2019 Exports of Knitted and Crotchet Ed Fabrics

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INTERNATIONAL TRADE OPERATIONS

GROUP PROJECT REPORT:

Import Procedure and Strategy of Knitted orCrocheted Fabrics (60)

Submitted by: Group- (Class-B)

ARITRA SENGUPTA 1OB

BIBASWAN BANERJEE 16BOM PASHUPATI 31B

PARTHA CHANDRA 32B

RAJESH JADDU 38B


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INDEX

1. Trends in Global Trade of Knitted and

Crocheted Fabrics............................. 3

2. Production and Consumption Trends of Knitted or Crocheted Fabrics in

India.............................................................................. ....... 5

3. Major Exporters of Knitted or

Crocheted Fabrics....................................................................... 9

4. Major Importers of Knitted or

Crocheted Fabrics.................................................... ...................... 11

5. Policy and Procedure Governing Import of Knitted or

Crocheted Fabrics........................................................................ 13

6. Import Planning of Knitted or Crocheted Fabrics for Indian

Markets................................................................................ 16

7. Selling Knitted or Crocheted Fabrics in

India: Operational Challenges..................... 17

References.


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1Trends in Global Trade of Knitted and

Crotched Fabrics with respect to India


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World Trade Atlas

India - Imports from -- World --

Millions of US Dollars

January - December

% Share % ChangeHS Description 2008 2009 2010 2008 2009 2010 - 10/09 -

-- World -- 321410.1022 257658.0057 350782.9754 100 100 100 36.14

60 Knit,Crocheted Fabrics 154.541439 154.202726 226.804322 0.05 0.06 0.07 47.08

6001 Pile Fabrics 27.021585 17.365379 13.255679 17.5 11.26 5.85 -23.67

6002 Oth Fabric,Knit/Croch 7.951335 3.303529 2.24248 5.15 2.14 0.99 -32.12

6003 Knit/Croh Fabs, Wd30 Cm,5% 9.676741 4.546556 7.180727 6.26 2.95 3.17 57.94

6005 Warp Knit Fabrics, Other Than 58.108392 61.138721 99.723129 37.6 39.65 44 63.11

6006 Knitted Or Crocheted Fabrics, 49.742982 66.88274 102.895443 32.2 43.37 45.4 53.84

DGCI&S, Ministry of Commerce

World Trade Atlas

India - Exports to -- World --

Millions of US Dollars

January - December

% Share % Change

HS Description 2008 2009 2010 2008 2009 2010 - 10/09 -

-- World -- 195069.9458 165201.6402 222922.225 100 100 100 34.9460 Knit,Crocheted Fabrics 108.684719 110.170891 143.834122 0.06 0.07 0.07 30.56

6001 Pile Fabrics 30.891688 26.258831 21.802795 28.4 23.84 15.2 -16.97

6002 Oth Fabric,Knit/Croch 7.691378 7.67121 8.594852 7.08 6.96 5.98 12.04

6003 Knit/Croh Fabs, Wd30 Cm,5% 5.431057 3.760016 5.205182 5 3.41 3.62 38.44

6005 Warp Knit Fabrics, Other Than 4.828957 6.573961 3.401789 4.44 5.97 2.37 -48.25

6006 Knitted Or Crocheted Fabrics, 56.41026 62.809654 102.348931 51.9 57.01 71.2 62.95



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Exports of HS 60 increased both times i.e.in 2009 and 2010over the previous year in terms in

millions of US$. The increase in 2009 was 1.36% while that in 2010 was 15.31%. However,

what is interesting to note is that in 2009 as compared to 2008, the volume exported

actually decreased by almost 31% (in Kgs) before dropping even further, albeit by a lesser

amount in 2010. This can be attributed to a fall in production and increased prices of Indian

knitted and crocheted fabrics in the international markets in this time period. The biggest

contributor to this occurrence has been the drop in export of HS 6004 i.e. knitted and

crocheted fabrics with yarn width greater than 30cm and HS 6002.

Indian imports (value in terms of US$)of HS 60 remained more or less constant in 2009 as

compared to the previous year before posting a 33% increase in 2010. This could be

attributed to a spurt in domestic consumption. The imports of HS 60 (in Kgs) support the

above as we can see that in 2009, imports fall but recover strongly in 2010. The changes as

mentioned were majorly contributed by HS 6005 and HS 6006.

World Trade Atlas

India - Imports from -- World --

Quantity

January - December

% Change

HS Description 2008 2009 2010 - 10/09 -

-- World -- 0 0 0

60 Knit,Crocheted Fabrics 131766308 KG 68057081 KG 87428469 KG 28.46

6001 Pile Fabrics 7630907 KG 5092655 KG 3609703 KG -29.12

6002 Oth Fabric,Knit/Croch 1381856 KG 912298 KG 642592 KG -29.56

6003 Knit/Croh Fabs, Wd30 Cm,5%>El 1519574 KG 1457404 KG 1674642 KG 14.91

6005 Warp Knit Fabrics, Other Than 104300997 KG 31784699 KG 38881113 KG 22.33

6006 Knitted Or Crocheted Fabrics, 16338184 KG 28422571 KG 42026452 KG 47.86


World Trade Atlas

India - Exports to -- World --

Quantity

January - December

% Change

HS Description 2008 2009 2010 - 10/09 -

-- World -- 0 0 0

60 Knit,Crocheted Fabrics 56454684 KG 39037369 KG 33538047 KG -14.09

6001 Pile Fabrics 8439438 KG 8296821 KG 5949546 KG -28.29

6002 Oth Fabric,Knit/Croch 28144586 KG 10519295 KG 1505081 KG -85.696003 Knit/Croh Fabs, Wd30 Cm,5%>El 2939340 KG 859815 KG 852093 KG -0.9

6005 Warp Knit Fabrics, Other Than 1049309 KG 769715 KG 821228 KG 6.69

6006 Knitted Or Crocheted Fabrics, 15107600 KG 17773782 KG 23744660 KG 33.59



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2Production and Consumption Trends ofKnitted and Crotched Fabrics in India

Power Looms: Production and Value Addition, Number of Units and Looms,

Employment

OAME NDME DME

OAME,

NDME,

DME

Small to

Medium

Unorgan

ised

Small to

Medium

ASI Medium Large Total

ower loom, mill and

osiery sector

o of units 3,79,103 59,508 41,775 4,80,386 25,550 174 1,474 2,315 50,899

share in total units 74.3 11.7 8.2 94.2 5 0 0.3 0.5 100

er unit looms 1 3.3 8 15 15 32 90

stalled looms and

nitting machines 3,79,103 1,96,376 3,34,200 9,09,679 3,83,250 2,610 47,168 2,08,350

15,51,0

57

share in total

oms 24.4 12.7 21.5 58.6 24.7 0.2 3 13.4 100

mployment per unit 1.5 3.3 8 13 13 25 63

mployment 5,68,655 1,96,376 3,34,200 10,99,231 3,32,150 2262 36,850 1,45,845

16,16,3

38

share in total

mployment 35.2 12.1 20.7 68 20.5 0.1 2.3 9 100

roduction/unit/year

sqm 14,136 40,450 2,32,167 2,86,753 7,04,693

7,04,69

3 15,50,325 43,20,000

75,66,4

64

otal productionmnsqm) 3,483 1,685 7,759 12,927 15,304 104 2,057 9,501 39,893

share in total

roduction 8.7 4.2 19.4 32.4 38.4 0.3 5.2 23.8 100

alue added/sqm 7.42 10.5 15.77 6.61 6.61 5.46 4.58

alue added (million

s) 25,846 17,692 1,22,360 1,65,898 1,01,161 689 11,229 43,513

3,22,49

1

share in totalalue added 8 5.5 37.9 51.4 31.4 0.2 3.5 13.5 100


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Fabrics Producing Units: It has been observed that the total number of woven and knitted

units run manually in India is estimated at 11.29 lakh (handloom and hand-knitted units)

and those run with power are estimated at 5.02 lakh (power loom/ mill and hand-knitted

units), out of total 16.39 lakh cotton and synthetic fabrics producing units.8 The OAME units

account for 14.35 lakh, out of which 10.57 lakh are running manually and 3.78 lakh arepower-driven. The woven and knitted units, which should have been a part of ASI segment,

but are listed in NSS unorganised manufacturing data, are estimated at 57,756. Among the

woven units, handloom accounts for 11.24 lakh and power loom/mill 4.92 lakh out of total

16.16 lakh woven units. This is one crucial finding as there has been lots of controversy sur-

rounding the exact number of handloom and power loom units existing in the country. The

comparison of Statewise estimates of various types of units derived, using secondary

sources (NSS data on unorganised manufacturing sector and ASI data), is quite matching

with the information collected from the survey/primary sources and other secondary

sources except in case of a few states. For example, in the case of Delhi, the power loomunits are banned, but the data available from ASI and NSSO 62nd round shows the existence

of power loom units in Delhi.

Per Unit Ratios for Units Producing Fabrics Power loom, Hosiery and Mill Sector Units: The

number of looms installed per unit varies from average size of 1 to 90 in units running with

power and employment from 1.5 to 63. The weighted value added9 per square metre of

fabrics is estimated at Rs 7.42 for OAME units, Rs 15.77 for DME unit and Rs 4.58 for large

size.

The weighted average production per unit on the basis of sample design is estimated and

varies from 14,136 sqm for an OAME unit to 43.2 lakh for large size units. Thus, the

production depends on the workers per unit, which in turn, depend upon the number of

looms installed per units. Thus, an analysis of these units as per the size is very crucial for

finding the exact number of looms, employment, production and value added estimates

Handloom and Manual Knitting Units: The per unit estimates have been worked out on the

basis of NCAER, 2008-09, field data. The per units loom installed varies from an average size

of 1 to 94 in the units running without power, employment from 1.5 to 94, weighted value

added per sqm of fabrics from Rs 9.80 for OAME units to Rs 21.30 for NDME units, annual

production per units from 2,500 sqm in OAME units to 2, 93,233sqm for large size units

(Table 2, p 64). As in case of Power Loom units, the profit margin taken varies in the range of

5% to 25% for various categories of units.


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Hand Looms: Production and Value Addition, Number of Units and Looms,

Employment

OAME NDME DME

OAME,

NDME,

DME

Small to

Medium

Unorganised

Small to

Medium


Handloom and

hand-knittingsector

No of units 10,53,750 48,419 17,428 11,19,597 6,256 222 1,753 1,715 11,29,543

% share in total

units 93.3 4.3 1.5 99.1 0.6 0 0.2 0.2 100

No of loom per

unit 1 3.5 7.5 17 17 34 94

Number of

ooms andhand-knitting

machines

nstalled 10,53,750 1,69,466.50 1,30,710 13,53,927 1,06,352 3,774 59,602 1,61,210 16,84,865

% share in total

ooms 62.5 10.1 7.8 80.4 6.3 0.2 3.5 9.6 100

Employment

per unit 1.5 3.5 7.5 17 17 34 94

Employment 15,80,625 1,69,467 1,30,710 18,80,802 1,06,352 3,774 59,602 1,61,210 22,11,740

% share in total

employment 71.5 7.7 5.9 85 4.8 0.2 2.7 7.3 100

Production/

unit/ year (sqm) 2,500 20,568 45,052 68,120 89,384 89,384 1,96,645 2,93,233 7,36,766

Total

production

mnsqm) 1,054 498 628 2180 475 17 310 478

3,460

(3,145*)

% share in total

production 30.5 14.4 18.2 63 13.7 0.5 9 13.8 100Value added/

sqm 9.8 21.3 14 13.14 13.14 10.98 10.24

Value added

million Rs) 10,327 10,606 8,794 29,727 6,246 222 3,407 4,892 44,493

% share in total

value added 23.2 23.8 19.8 66.8 14 0.5 7.7 11 100


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Handloom and Manual Knitting Units: The per-unit estimates have been worked out on the

basis of NCAER, 2008-09, field data. The per units loom installed varies from an average size

of 1 to 94 in the units running without power, employment from 1.5 to 94, weighted value

added per sqm of fabrics from Rs 9.80 for OAME units to Rs 21.30 for NDME units, annual

production per units from 2,500 sqm in OAME units to 2,93,233sqm for large size units

Mill, Hosiery and Handloom Sector

OAME NDME DME

OAME,

NDME,

DME

Small to

Medium

Unorganised

Small to

Medium


Total no of

units 14,32,853 1,07,927 59,203 15,99,983 318,06 396 3,227 4,030 16,39,442Handloom

and hand-

knitted share 73.5 44.9 29.4 70 19.7 56.1 54.3 42.6 68.9

nstalled

ooms 14,32,853 3,65,843 4,64,910 22,63,606 4,89,602 6,384 1,06,770 3,69,560 32,35,922

Handloom

and hand-

knitted share 73.5 46.3 28.1 59.8 21.7 59.1 55.8 43.6 52.1

Employees

engaged in

hese sectorsn India 21,49,280 3,65,843 4,64,910 29,80,032 4,38,502 6036 96,452 3,07,055 38,28,077

Handloom

and hand-

knitted share 73.5 46.3 28.1 63.1 24.3 62.5 61.8 52.5 57.8

Production in

mnsqm 4,537 2,183 8,387 15,107 15,779.50 121 2,367 9,978.50 43,353

Handloom

and hand-

knitted share 23.2 22.8 7.5 14.4 3 13.9 13.1 4.8 8

Value added

million Rs) 36,173 28,298 1,31,154 1,95,625 1,07,406 911 14,636 48,406 3,66,983

Handloom

and hand-

knitted share 28.5 37.5 6.7 15.2 5.8 24.3 23.3 10.1 12.1


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3Major Exporters ofKnitted or Crocheted FabricExporters Trade IndicatorsValue

exported in

2010 (USD

thousand)

Trade

balance in

2010 (USD

thousand)

Annual

growth in

value

between

2006-2010

(%)

Annual

growth in

value

between

2009-

2010 (%)

Share in

world exports

(%)

World 26210936 4752205 3 21 100

China 8666501 6321083 15 35 33.1

Republic of Korea 3703810 3598767 5 17 14.1

Hong Kong, China 2522289 338693 -7 11 9.6

Chinese Taipei 2060057 2027174 -1 23 7.9

Turkey 1267134 894978 11 29 4.8

Italy 1168080 502648 -4 7 4.5

United States ofAmerica 1062242 282235 -14 17 4.1

Germany 977524 523535 -5 11 3.7

Japan 688615 574150 1 12 2.6

France 502397 101106 -5 3 1.9

Spain 269985 75761 -5 8 1

Thailand 260761 -139099 12 40 1

Belgium 191118 40928 -3 3 0.7

United Kingdom 176986 -23973 -5 8 0.7

Austria 170427 57940 -3 8 0.7

Malaysia 153197 4718 6 13 0.6

India 143794 -48236 19 32 0.5

Portugal 131808 33616 22 23 0.5

Greece 128259 41389 5 -6 0.5

Israel 112844 50533 173 15 0.4

Viet Nam 109862 -2154887 24 33 0.4

Guatemala 102612 -82430 148 32 0.4


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Singapore 95771 -35298 -10 13 0.4

Indonesia 92776 -855293 0 21 0.4

Poland 91278 -145915 0 18 0.3

Czech Republic 83175 1843 14 3 0.3

-2000000 0 2000000 4000000 6000000 8000000 10000000

China

Hong Kong, China

Turkey

United States of

Japan

Spain

Belgium

Axis Title

Chart Title

Exports for Chapter 60

Trade Balance


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4Major Importers of Knitted or Crocheted Fabric Importers

Trade IndicatorsAverage

tariff

(estimated)

applied by

the

country (%)

Value

imported

in 2010

(USD

thousand)

Trade

balance in

2010 (USD

thousand)

Annual

growth in

value

between

2006-

2010 (%)

Annual

growth in

value

between

2009-

2010 (%)

Share in

world

imports

(%)

World 21458731 4752205 1 19 100

China 2345418 6321083 1 10 10.9 20

Viet Nam 2264749 -2154887 24 33 10.6 13.8

Hong Kong, China 2183596 338693 -8 5 10.2 0

Cambodia 1001396 -998770 8 36 4.7 6.9

Indonesia 948069 -855293 109 51 4.4 9.5

Mexico 798449 -764156 -8 23 3.7 7

United States of

America 780007 282235 -8 12 3.6 10.8Italy 665432 502648 6 25 3.1 2.1

Brazil 522346 -469735 54 54 2.4 24.9

Sri Lanka 479675 -459049 2 15 2.2 0

Germany 453989 523535 -5 13 2.1 2.1

France 401291 101106 -3 -1 1.9 2.1

Thailand 399860 -139099 -2 27 1.9 5

Bangladesh 392087 -389270 5 37 1.8 25

El Salvador 391673 -341659 -8 31 1.8 9.4

Russian Federation 377968 -376592 23 35 1.8 13Turkey 372156 894978 16 61 1.7 3.6

Jordan 343771 -330653 -9 19 1.6 0

Morocco 325016 -314935 6 8 1.5 17.5

United Arab

Emirates 263581 -259809 5 7 1.2 4.7

Romania 262110 -241297 3 16 1.2 2.1

Poland 237193 -145915 -5 16 1.1 2.1

Bulgaria 216168 -187779 3 3 1 2.1

Philippines 211618 -206699 -21 2 1 8.2Honduras 205875 -161159 -20 9 1 9.5


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United Kingdom 200959 -23973 0 45 0.9 2.1

Spain 194224 75761 -2 11 0.9 2.1

India 192030 -48236 16 18 0.9 11.2

Guatemala 185042 -82430 154 -3 0.9 9.1

0

5

10

15

20

25

30

0

500000

1000000

1500000

2000000

2500000

Imports Vs Average Tariff

Imports in 1000s

Average Tariff

-4000000 -2000000 0 2000000 4000000 6000000 8000000 10000000

China

Viet Nam

Hong Kong, China

Cambodia

Indonesia

Mexico

United States of America

Italy

Brazil

Sri Lanka

Germany

France

Thailand

Bangladesh

Trade Balance

Imports in 1000s


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5Policy & Procedure governing import (export) ofKnitted or Crocheted Fabric

1.6001: PILE FABRICS, INCLUDING LONG PILE FABRICS AND TERRY

FABRICS, KNITTED OR CROCHETED

Tariff Item Description of goods Unit Standard Rate of duty6001 10 Long pile fabrics :

6001 10 10 Of cotton Kg. 10%

6001 10 20 Of man-made fibres Kg. 10%

6001 10 90 Of other textile materials Kg. 10%

---- Looped pile fabrics :

6001 21 00 Of cotton Kg. 10%

6001 22 00 Of man-made fibres Kg. 10%

6001 29 00 Of other textile materials Kg. 10%

---- Other :

6001 91 00 Of cotton Kg. 10%

6001 92 00 Of man-made fibres Kg.

10% or- Rs. 100 per Kg.,

whichever is higher

6001 99 Of other textile materials :

6001 99 10 Of wool or fine animal hair Kg. 10%

6001 99 90 Other Kg. 10%


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2.6002 KNITTED OR CROCHETED FABRICS OF A WIDTH NOT EXCEEDING

30 CM, CONTAINING BY WEIGHT 5% OR MORE OF ELASTOMERIC YARN

OR RUBBER THREAD, OTHER THAN THOSE OF HEADING 6001

TariffItem Description of goods Unit

Standard Rateof duty

6002 40

00

Containing by weight 5% or more of elastomeric yarn but not

containing rubber thread Kg. 10%

6002 90

00 Other Kg. 10%

3.6003: KNITTED OR CROCHETED FABRICS OF A WIDTH NOT EXCEEDING30 CM, OTHER THAN THOSE OF HEADING 6001 OR 6002

Tariff Item Description of goods Unit Standard Rate of duty


6003 20 00 Of cotton Kg. 10%

6003 30 00 Of synthetic fibres Kg. 10%

6003 40 00 Of artificial fibres Kg. 10%

6003 90 00 Other Kg. 10%

4.6004 :KNITTED OR CROCHETED FABRICS OF A WIDTH EXCEEDING 30

CM, CONTAINING BY WEIGHT 5% OR MORE OF ELASTOMERIC YARN OR

RUBBER THREAD, OTHER THAN THOSE OF HEADING 6001

Tariff Item Description of goods Unit

Standard Rate of

duty

6004 10 00

Containing by weight 5% or more of elastomeric yarn but

not containing rubber thread Kg. 10%6004 90 00 Other Kg. 10%

5.6005: WARP KNIT FABRICS (INCLUDING THOSE MADE ON GALLOON

KNITTING MACHINES), OTHER THAN THOSE OF HEADINGS 6001 TO

6004


--- Of cotton :6005 21 00 Unbleached or bleached Kg. 10%


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6005 22 00 Dyed Kg. 10%

6005 23 00 Of yarns of different colours Kg. 10%

6005 24 00 Printed Kg. 10%

-- Of synthetic fibres :

6005 31 00 Unbleached or bleached Kg. 10%

6005 32 00 Dyed Kg. 10%


6005 34 00 Printed Kg. 10%

--- Of artificial fibres :


6005 42 00 Dyed Kg. 10%


6005 44 00 Printed Kg. 10%

6005 90 00 Other Kg. 10%

6.6006 OTHER KNITTED OR CROCHETED FABRICS



--- Of Cotton :


6006 22 00 Dyed Kg. 10%


6006 24 00 Printed Kg. 10%

--- Of synthetic fibres :


6006 32 00 Dyed Kg. 10%


6006 34 00 Printed Kg. 10%

--- Of artificial fibres :


6006 42 00 Dyed Kg. 10%


6006 44 00 Printed Kg. 10%

6006 90 00 Other Kg. 10%

Source: CBEC


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6Import Planning of Knitted and CrochetedFabrics for Indian Markets

In order to get started with the importing of Knitted and Crocheted Fabrics for marketing

and sale in India, it is important to do suitable planning so as to complete the task

successfully. Firstly, all the regulatory and licensing tasks as spelt out by Indian government

regulations will have to be completed and one will have to become a licensed importer

registered with a suitable body. Then the registered firm or individual will have to gauge themarket carefully to find out if there is scope for importing Knitted or Crocheted Fabrics in

India, and if there does, only then should the firm go ahead with the import. Also, the duty

structures charged by government and the regulations will have to be considered all the

while doing the importing procedure.

All imports now fall into one of the following four categories:

1. Freely importable items; most capital goods fall into this category. Items in thiscategory do not require import licences and may be freely imported by any

individual or entity.

2. Licensed imports; certain items can be imported only with licences and only byactual users. The current "negative list" of items in this category includes several

broad product groups that are classified as consumer goods; precious and semi-

precious stones; products related to safety and security; seeds, plants and animals;

some insecticides, pharmaceuticals and chemicals; some electronic items; several

items reserved for production by the small-scale sector; and 17 miscellaneous or

special-category items. In April 1993 the government ended licensing requirements

for several agricultural items, including prawns, shrimp and poultry feed.

3. Canalised items; Items under this category can be imported only by specified public-sector agencies. These include petroleum products (to be imported only by the

Indian Oil Corporation); nitrogenous phosphatic, potassic and complex chemicalfertilizers (by the Minerals and Metals Trading Corporation) vitamin- A drugs (by the

State Trading Corporation); oils and seeds (by the State Trading Corporation and

Hindustan Vegetable Oils); and cereals (by the Food Corporation of India).

4. Prohibited items; only three items-tallow fat, animal rennet and unprocessed ivory-are completely banned from importation.

Knitted and Crocheted Fabrics in India falls under the first category, i.e. freely importable

items, whereby the importer can import of the good into the country in order to meet the

shortfall in domestic production to satisfy the market supply.


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7Selling Knitted and Crocheted Fabrics inIndia: Operational Challenges

The Indian textile and clothing industry continues to have an important place in the national

economy as regards employment, income generation and export earnings. It is estimated to

provide employment to more than 16.98 million workers as per the National Sample Survey (NSS)61st round July 2004-June 2005 and 12.6 million as per the Annual Survey of Industries (ASI) and

NSSO data on unorganised manufacturing sector, 62nd round, 2005-06, 1 contribute to 11.6% of

manufacturing value added during 2006-07 (GoI 2008c), and 13.8% of total export earnings during

2007-08 (Compendium of Textile Statistics). The share of clothing in total expenditure of

households is estimated at 6.65% in 2004-05 at the all-India level (365 days as reference period,

NSS, 61st round), while the expenditure on clothing account for more than 4.02% of total private

consumption expenditures during 2006-07 (GoI 2008c).

The industry is dominated by small, fragmented, non-integrated units with the only exception

being the spinning sector. The spinning is dominated by large units and major modernisation

process in this sector goes back to the 1990s.

The main factors which led to modernisation in spinning sector include lowering of custom du ties

and other restrictions on imports of machinery and equipment and lowering of restrictions on

imports and exports of raw cotton and yarn. However, the weaving, dyeing and garment sectors

lag behind in the process.

The reservation of small-scale sector for garment sector till recently was one main factor

responsible for demand of fabrics in smaller lots, which was conducive for the production offabrics in small-scale Power Loom sector and small-scale dyeing units. It is also true that the

policies pursued till lately related to various taxes, labour and other regulations were favourable

for the growth of small-scale, labour-intensive enterprises and discriminated against large-scale,2

capital-intensive firms3 in weaving, processing and garment sectors.

Since weaving takes place primarily in the unorganised sector, the estimates of this sector are not

properly accounted for. It is thus important to make an assessment of the contributions made by

various size classes of units in the handloom, power loom/mill and knitting sectors to the overall

employment, output, value addition, fabrics production, etc.


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Power loom Sector:

MARKETING

The power loom clusters are located in diverse geographical boundaries and are mainly the

outgrowth of handlooms centres, where handlooms were unable to compete with the mill sector.

Easy availability of raw material and skilled labour, proximity to dyeing, bleaching and processing

kind of ancillary units are crucial in determining the location of the power loom clusters. Power

loom units are not as labour-intensive as handloom, especially at the higher scale.

FINANCE

The profit margin taken is about 5% for OAME units as most of the benefits are enjoyed by intermediary,

10% for NDME, 20% for medium and 25% and for large size units

An average worker (a weaver or a helper or any other assistant) can operate one-loom/knitting

machine in small units engaging less than 10 looms and 2-3 looms/knitting machines,

simultaneously in the middle to large size units with modern technology. The wages are linked to

the Piece production per worker/loom, skill and the quality of fabrics produced, scarcity of labour

and the presence of trade unions in the cluster. The wage rates in Ichalkaranji and Malegaon

(Maharashtra) Power Loom clusters are lower compared to Sircilla in Karimnagar district of

Andhra Pradesh and Panipat in Haryana because of absence of trade unions. The wage cost to

produce per square metre of a cotton saree in West Bengal is Rs 2.51 as the labour is unionised

compared to Rs 1.10 in Tamil Nadu. The power rate and the kind of loom/knitting machine used

are other important factors explaining the wide variations in these variables and overall cost per

square metre of fabrics production across states

The benefits enjoyed by the small and marginal unorganised sector include lower power cost per

unit, lower labour cost (as several labour laws are not applicable), lower overhead costs, tax

saving/evasions, etc. These led to the growth of small- and medium- sized Power Loom units. The

average size of the surveyed units varies between three, four and six looms, respectively in UttarPradesh, West Bengal and Madhya Pradesh compared to around 40 looms in Tamil Nadu and

Maharashtra. For other states, it varies between these two limits. Most of the Power Loom units

operate round the clock throughout the year in two shifts of 12 hours each in the state of Tamil

Nadu and Gujarat, and in Punjab, Uttar Pradesh and Orissa in one shift of around 12 hours a day.

Profit margin/overhead costs vary in the range of 5% to 35% across clusters. This is subject to the

market conditions and the order received from the buying party.

SUBSIDY


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Tamil Nadu, Andhra Pradesh, Karnataka and Gujarat provide power subsidy to small size units. It

was noticed during the survey that a few big corporate houses run many small- and medium-

sized Power Loom units in different work sheds and under different banners across the clusters to

enjoy this benefit. In Tamil Nadu, the connection for lower horse power (up to 10 HP) is easy to

get and is charged at Rs 2.30 per unit consumption compared to Rs 4.90 for connection higherthan 10 HP. The Government of Andhra Pradesh follows similar power policy in 2001, and Rs 0.87

were charged per unit for connection up to 5 HP compared to Rs 1.74 for connection more than 5

HP.

CO-OPERATIVES

The cooperatives are running effectively in Tamil Nadu, Maharashtra, Madhya Pradesh and

Kerala. In Tamil Nadu, the Power Loom weavers cooperative societies mainly produce the cloth

required under the scheme of free supply of saris, dhoti sand uniforms to schoolchildren as per

the directives of the state government. In Madhya Pradesh, the Power Loom cooperative societies

have to supply bed sheets and other made-ups to state government hospitals and government

offices. The handloom cooperatives operate on same lines and function well in Tamil Nadu and

Kerala. The handloom cooperatives procure yarn from the National Handloom Development

Corporation and a few other agencies. The marketing of this product and payment is ensured and

made immediately. But in Orissa, the cooperatives are not functioning effectively and payment is

a problem. The handloom owners in such states have to take recourse to local buyers or

middlemen for making their needs.

In clusters like Jabalpur (Madhya Pradesh), the supply of yarn units is entirely dependent on the

Madhya Pradesh State Power loom Weavers Cooperative Federation. But the cooperative is not

able to timely supply yarn to the units in adequate quantity and the alternative sources are very

costly. In Seminar cluster of Coimbatore, the Power Loom units complain the non-availability of

yarn in the local market at reasonable price due to excessive exports of yarn. The smaller size

units suffer more due to lack of storing capacity.

A large number of so-called handloom cooperative units in Delhi are actually managed by single

individual/family owners. The other registered cooperative members remain dormant or work as

labourers in the same unit under one shed, but units enjoy all the benefit of cooperatives. Some

of these handloom units even own a showroom in which various items actually produced in the

Power Loom sector are sold as handloom products.

Knitted and Hosiery Sector


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Hosiery broadly refers to the garments made from knitted fabrics. Most of the knitting and

hosiery production activities take place in three clusters, namely, Tirupur, Ludhiana and Kanpur.

The average size of the units is the highest in Tirupur, followed by Ludhiana and Kanpur. Most of

the units in Tirupur and Ludhiana produce both knitted fabrics and garments, mainly on a job

work basis, but units with entire value chain operation, from knitting to packaging of garments,are rare. A few integrated units exist with entire value chains, but even these are not

homogeneous in terms of operation, size and scale.

LOCATIONS

Most of firms in Tirupur are either single proprietorship or partnership owned by people mainly

from local or adjoining areas. Tirupur accounts for 80% of the countrys cotton hosiery exports,

and Ludhiana 70% of the woollen garment exports. The Kanpur cluster is not well-developed, butconcentrates on domestic markets with targets on lower end segment. Ninety per cent of units in

Tirupur are export-oriented units. In Ludhiana, a handful of spinning mills supply yarn to knitting

units often through their agents. Hosiery units frequently complain that prices are often raised

and rates are even renegotiated during the period between placing order and delivery of yarn by

the yarn mills depending upon the opportunity.

PROCUREMENT: In Kanpur, the grey hosiery yarn is imported from other states through

traders/brokers and non-availability of yarn locally is a major constraint.

OPERATIONS: In Tirupur and Ludhiana, most of the knitting is done on imported modern circular

and flat knitting machines with a large diameter. Knitting in these units is very capital-intensive

and one worker can run up to three knitting machines simultaneously. The yarn wastage is low

and knitting is done mostly in three shifts. In contrast to Tirupur and Ludhiana, in Kanpur, the

units have old conventional knitting machines with low speed and productivity .

FINANCE: The average cost per kilogram of knitted cotton fabric is lowest in Kanpur at Rs 176.59

and the highest in Tirupur at Rs 182.78. The average yarn cost at Rs 151.72 in Tirupur is also the

highest due to better quality of knitted fabric produced mainly for exports. Wages per kilogram of

fabric is lower in Tirupur compared to Ludhiana, but are higher than Kanpur. In contrast to

knitting units, garment units work 10-12 hours a day and run only in one shift. Manual or semi-

mechanised cutting operation is mainly performed in garment units. Fully mechanised cutting

machines are used rarely. A worker with no previous work experience in this sector, first, has to

work as a helper for a few years and then as a tailor or a supervisor.

OPERATIONS: Each piece goes through different stitching processes and to put accessories on

various power-aided stitching machines. The capacity utilisation of the machine is tricky. The

single and multiple- needle machines can be fully utilised, while the utilisation of the over lock

machine, cause machine, button machine, etc, depend upon the kind of fabrics produced.


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The medium and large garment units are mainly engaged in assembly line work such as the

stitching of various garment parts together and fixing accessories on these, and hence, production

per machine/labour is high in such units. The small units mainly perform slow labour-intensive

work. All stitched clothes need to go through a checking process. Dyeing/printing and/or

embroidery are done after stitching in some high value garments as per order. Labelling, ironingand packaging need to be undertaken on garments before dispatching them to the buying/export

houses. Many large units have a separate designing department and get support from institutions

like the National Institute Fashion Technology (NIFT). These larger units use Computer Aide d

Design (CAD) and Computer Aided Manufacturing (CAM) to improve the quality of their garments.

Some other units rely on internet for getting modern designs. Medium and small units mainly

depend on buyers for supply of design.

The average fabric cost in making a T-shirt is estimated at Rs 64 per piece in Tirupur compared to

Rs 35 in Ludhiana. In case of undergarments, the average fabric cost is estimated at Rs 5 in Tirupurcompared to Rs 10 per piece in Kanpur. In preparing a vest, the average fabric cost varies from Rs

6 in Tirupur to Rs 11 in Kanpur. The fabric cost of T-shirt is higher in Tirupur as most of the

surveyed units are engaged in exports for which they need superior quality fabric. Fabric cost per

piece depends on the quality and weight of the fabric

References


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www.cbec.gov.in

www.trademap.org

www.eximguru.com

www.dgft.gov.in

www.texmin.nic.in
http://www.cbec.gov.in/http://www.cbec.gov.in/http://www.trademap.org/http://www.trademap.org/http://www.eximguru.com/http://www.eximguru.com/http://www.dgft.gov.in/http://www.dgft.gov.in/http://www.texmin.nic.in/http://www.texmin.nic.in/http://www.texmin.nic.in/http://www.dgft.gov.in/http://www.eximguru.com/http://www.trademap.org/http://www.cbec.gov.in/

Documents

Exports of Knitted and Crotchet Ed Fabrics