Al Ahram Al Iktisadi, p.48 (9/4/2007)

Europe's share of Indian textiles exports reached 73%

By: Zeinab Abul Ela

Regulations and institutions play an important role in developing the textiles industry in India. There is a Ministry for textiles industries in India with its affiliated bodies that have a common strategic vision for that sector and they set up the required plans for it.

A study prepared by the Fund of Promoting Yarn and Textiles Industry which was entitled " an Analytical Study for the Textiles Products Sector in India", stated that the modernization and development witnessed by Indian industries, did not ignore the traditional handcrafts. It rather reorganized it to cater for the requirements of the market. This made India benefit from exporting its handcrafts and traditional products.

The study stated that the textile sector plays a pivotal role in the economic and social life in India. It accounts for 4% of the GDP, as per 2004 statistics. Textiles represented 17% of the total Indian exports in 2005/2006.

It is worth mentioning that there are about 35 million workers in this sector, which represents 10% of the Indian workforce. Thus, it is considered the second largest sector in India after the agricultural sector, in terms of the number of workers. India's share of world textile exports is 4% and its share of the world garments exports is 2.9 %.

The reform plan

There are several common factors between Egypt and India especially the economic reform programs. The reform program of the textile industry in India started in 1976. At the time, there was not a special department for this industry. It was affiliated to the Exports Promotion Department of the Ministry of Trade. Then, the government established an independent body affiliated to the Ministry of Trade in March 1976 to develop exports. In 1985, India decided to establish an independent ministry for Textile industries. Pakistan followed its suit and established independent ministries for textile industries.

The Ministry sets up the policies and plans which are necessary for developing, increasing exports, and formulating commercial systems. It also coordinates the activities of research institutes and funds them.

The Ministry of Textile industries in India comprise four sectors: yarn, textiles, developing handlooms, and handicrafts. This organization led to a quantum leap in the performance of this sector.

Yarn sector

The study stated that the production of the yarn and textile sector reached about 3411 tons in 2005/2006, 71.4% of which are cotton yarn, 17.2 % blended yarn, and 11.4 synthetic yarn.

The mechanical looms sector plays an important role in providing 63% of the Indian textile production. This sector includes 1,923,000 looms distributed to 430,000 small units. It provides about 2.9 million job opportunities and provides 80 % of the dyes required by the dyed textiles sector.

Pioneering sectors

As for the traditional looms sector, it comprises 12 million workers. Since the establishment of Development of Handlooms Bureau, a number of new work methods were introduced to promote this sector through the application of technological methods and marketing, research and development activities.

As for the synthetic filament and short yarn sector, statistics refer to that India's imports and exports of polyester represented 85% of synthetic filament in 2005.

As for the wool sector, 40% of the infrastructure of this sector is in the Punjab region. There are 1.2 million workers in this field. The Indian government established a center for developing wool products sector in 1987.

Natural silk sector

As for the natural silk sector, India enjoys a good reputation in this field. It ranks second worldwide, with 17,625 tons of production annually. There are 6 million workers in this sector. There are four sections in this sector: yarn, garments, carpets and textile remnants. The volume of natural silk exports represents 70% of the Indian exports.

A table showing the Indian textile exports during 2004/2005

As for the handcrafts, there are 5.3 workers in this sector. The production of this sector reached estimated at $ 3.5 billion in 2005. The most important products of this sector are: carpets, floor covers, and hand-embroidered stuff.

Jute sector

India ranks first worldwide in the Jute production. It produced 1.8 million tons in 2005/2006. This sector accommodates 4 million rural families. Besides, it comprises about 260,000 workers who work directly for this sector and 140,000 workers who are indirectly involved with it. India's Jute consumption reached 1424 tons in 2004/2005. India exports 3,218,000 tons of jute, which is estimated at 1146.9 rupees.

India's exports

The study reviews the volume of Indian textile exports that account for 4% of the world textile exports and 2.9% of the world garment exports. This is attributed to the magnitude of the textile production in India. The revenues of the textiles exports reached $ 17.1 billion in 2005/2006 compared to $ 14 billion in 2005. Furthermore, garments represented 45.4 % of the total textile exports.

The cotton textile products, excluding garments, grew by 26.8% in 2005/2006. They ranked second on the list of Indian textile exports and are estimated at $ 4.5 billion compared to $ 3.5 billion last year.

Export markets

The EU countries absorb about 73.6 % of the Indian textile exports and 26.4% of the world production. Last year, exports to the EU markets decreased due to the dumping suits filed against some of the Indian textile items.

The Indian textile exports to the US market amounted to 2,335 million square meters and are estimated at $ 4,617 million. The study showed that there are several supporting programs in the textile sector like that of funding the technological development which contributes to boosting competitiveness in the local and international markets. There is also the program of providing high quality yarn and training for workers in the textile sector in collaboration with the Ministry of textile industries, trade unions, concerned banks and emergency funds.

The study confirms that the result of the application of the abovementioned programs is that India has been possessing one of the rising economies after the implementation of transparency and trade liberalization policies.

Recommendations of the study

The study recommended that we should benefit from the Indian experience in the field of developing textile industries which was based on conducting economic and human development at the same time. It also stressed the pivotal role that can be played by small scale textile industries in absorbing labor and hence helping in addressing the unemployment problem and boosting development.  This is quite clear in the mechanical and hand looms sector. It is worth mentioning that the industry development process is based on providing raw materials, trained labor, and policies that govern such a process.

A Belgian-Indian merger for controlling the Jeans market

In a bid to maintain their market share and augment their profits in the Denim market, two Indian and Belgian companies have merged together.

UCO, a Belgian company and Raymond, an Indian company, merged to make use of the benefits of merging such as having the required raw materials, production machines and spare parts at competitive prices and having a wide variety of products to be able to cater for he requirements of the international market.

It is worth mentioning that the company ranks first in worldwide in the field of Denim production in spite of the fact that it was established in February 2006. It has a share of 1.6% of the world production which is estimated at 5.5 billion meters annually.

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