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The Indian textile industry is one of the largest in the world with a massive raw material and textiles manufacturing base. Our economy is largely dependent on the textile manufacturing and trade in addition to other major industries. About 27% of the foreign exchange earnings are on account of export of textiles and clothing alone. The textiles and clothing sector contributes about 14% to the industrial production and 3% to the gross domestic product of the country. Around 8% of the total excise revenue collection is contributed by the textile industry. So much so, the textile industry accounts for as large as 21% of the total employment generated in the economy. Around 35 million people are directly employed in the textile manufacturing activities. Indirect employment including the manpower engaged in agricultural based raw-material production like cotton and related trade and handling could be stated to be around another 60 million.

The Government of India as well as the important state governments having a significant presence of the textile industry reviewed the whole spectrum of textile industry. Based on the above review and discussions, appropriate roadmaps have been drawn up for the development and promotion of all the sectors of the textile industry from cotton to finished products. The National Textile Policy 2000 has envisaged a foreign exchange earning to the tune of US $ 50 billion by the year 2010.

Besides, many important measures have been spelt out in the policy document. Before formulating the textile policy, the Government of India had set up a Committee under the chairmanship of Mr. Sathyam to examinePage 2

and draw up action points on various sectors of the textile industry. Accordingly, the committee in its report had outlined critical issues for development and growth.

In the textile industry, the weaving sector has been identified as one of the poorest technological links in the value chain. What makes the problem more serious is that the decentralized sector, both the power looms and the handlooms, which are accounting for the production of 76% of our fabrics needs, is marked by an overabundance. The textile industry can be broadly classified into two categories, the organized mill sector and the unorganized decentralized sector. Being a controlled sector, the organized mill sector has a complete information base on the organizational set-up, machinery installation, production pattern, employment etc. However, information-base on the decentralized sector on the above parameters are inadequate and policy planning has so far been based on hearsay and rough indirect estimates. The organized sector of the textile industry represents the mills. It could be a spinning mill or a composite mill. Composite mill is one where the spinning, weaving and processing facilities are carried out under one roof. On the other hand, the decentralized sector has been found to be engaged mainly in the weaving activity, which makes it heavily dependent on the organized sector for their yarn requirements. This decentralized sector is comprised of the three major segments viz., power loom, handloom and hosiery. In addition to the above, there are readymade garments, khadi as well as carpet manufacturing units in the decentralized sector. In a country like ours where labor is abundant and the unemployment poses a serious threat to the economic growth of the country, there is always a controversy about thePage 3

production technology to be adopted. The mill sectors competitiveness is at stake given the mushrooming of a large power loom sector that has production-function advantages. The textile production in case of the later entrants like power looms has therefore upset the entire production scenario. The power looms and mills are able to go for mass production with better quality products. IN spite of the fact that the industry could assimilate high technology levels for better quality production in the market, it has never adapted to the modern technology and, therefore, has remained obsolete.

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Indian textile industry concludes of various segments like: 1. Woolen Textile 2. Cotton Textiles 3. Silk Textiles 4. Readymade Garments 5. Jute And Coir 6. Hand-Crafted Textile Like Carpets 7. Man Made Textiles Indian textile industry in a very short span had made a distinct position globally, alluring the globe towards the World of Indian textiles. This has happened mainly because: High availability of raw materials Highly skilled economical labor, an added advantage Largest producer of cotton yarn contributing 25% towards worlds cotton Availability of all kinds of fibers like silk, cotton, wool and even high quality synthetic fibers. Flexibility of the readymade garment industry in terms of sizes, fabric variety, quantity, quality and cost.

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Here are a few important facts about Indias textile: 1. There are approximately 1200 medium to large scale textile mills in India. Twenty percent of these mills are located in Coimbatore (Tamilnaidu). 2. India has 34 million cotton textile spindles for manufacturing cotton yarn. Cotton yarns account for 70 percent of India's textile exports. (China has 40 million cotton spindles.) 3. Of the Indian textile yarn exports, almost 80 percent come from coarser yarns (counts below 40s). Consequently, there is a need to upgrade the technology. 4. The domestic knitting industry is characterized by small scale units which lack adequate facilities for dyeing, processing and finishing. The industry is concentrated in Tripura

(Tamilnaidu) and Ludhiana (Punjab). Tripura produces 60 percent of the country's total knitwear exports. Knitted garments account for almost 32 percent of all exported garments. The major players include Nahar Spinning, Arun Processors and Jersey India.

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Vardhman Polytex Limited (VPL) was originally promoted by Mohta Group in collaboration with PSIDC (Punjab State Industrial Development Corporation Limited) under the name & style of M/s Punjab Mohta Polytex Limited.The foundation of stone of Punjab Mehta polytex limited was laid on 12th June 1983. The Mahavir Spinning Mill Limited purchased and incorporated Punjab Mohta Polytex Limited Bathinda on 20th January 1987. In 1991 the name of the unit was changed to Vardhman Polytex Limited as a separate company. But after family settlement between two brothers in 17 Jan 2003 the group is known as The Oswal Group over period of time, the company has grown manifold under the guidance of Mr. Oswal at 1987 when company has taken from mohta, it had only 12000 spindles. And at present the capacity has moved up gradually to 105000 spindles. After the takeover, the management increased the capacity gradually to `25,000 spindles in 1991 and also changed the name of the company as "Vardhman Polytex Ltd". In order to diversify the product range, the company also set up a worsted unit at Ludhiana in 1990 with an installed capacity of 8,000 spindles. In 1992, the company expanded its operations by installing a Unit with an installed capacity of 25,000 spindles at Baddi known as Arisht Spinning Mills. Later on, the capacity of this unit was further expanded to 65,760 spindles. This unit was transferred to Mahavir Spinning Mills Ltd against consideration under a scheme of family settlement.

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In 1994, further expansion was carried out at Bathinda with the setting up of 11,320 spindles for manufacturing of Tyre Cord and Hosiery Yarns. In order to further strengthen the unit, the company has added another 12,000 spindles in 1998. After this expansion, the capacity of the unit was 49,248 spindles. In 1999, the company further carried out the Modernization of its existing plant at Bathinda with the total capital outlay of Rs. 32Crores under the TUFS scheme. After the family settlement, in January 2003, the company is ushering under the newly formed Oswal Group. The company has set up a state of the art technology-spinning project at Focal Point Ludhiana with an installed capacity of 24,288 spindles in January, 2004. Further, a new state of the art Dye House has been installed at the same site with an installed capacity of 13 MT / day which has been increased to 15 MT/day.Page 8

The company has also set up a state of the art technology-spinning project at Bathinda with an installed capacity of 25,344 spindles for the manufacture of Cotton yarn/Blended yarn, which has started its commercial production in May, 2005. Thereafter, the company has expanded its capacity at Focal Point, Ludhiana with an installed capacity of 25,315 spindles for the manufacture of Cotton yarn/Blended yarn which has started its commercial production in October, 2006. In 2006, the Company has joined hands with one of the leading European shirting fabric manufacturer namely F.M. Hammerle. 1836 for setting up of a green field project of dyed yarn shirting fabric. The said project has been undertaken in the newly formed subsidiary company namely "Oswal F. M. Hammerle Textiles Ltd." at Kolhapur (Maharashtra) with annual capacity of 12 million meters.

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The dyed yarn shirting fabric plant of OSWAL GROUP is one of the best plants in India with latest state-of-art machinery and equipment. The commercial production is expected in the month of Aug 2008. In 2008, the Company completed another expansion of 30,000 spindles at its existing location in Bathinda and with this expansion, the total spinning capacity with OSWAL GROUP stands increased to 1,65,872 spindles.

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