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Textiles: A decisive part of Indian economy

June 02, 2008 14:08 IST

The Indian Textiles Industry has grown phenomenally and has an overwhelming presence in the economic life of the country. The last four years have proved to be a defining period for the Indian textiles industry.

In the face of testing global conditions, the ministry of textiles has stayed the course by introducing timely policy changes and innovative programmes aimed at spurring growth and development across the organised and unorganised sectors of the industry.

TEX-Summit 2007

The first ever "TEX-SUMMIT 2007" was organised in association with the Industry to deliberate on problems facing it. The Prime Minister, in his valedictory address to the Summit had announced a Technology Mission on Technical Textiles; Setting up of Investment Regions for the Textiles Sector; the finalisation of Scheme of Neighbourhood Apparel and Textiles Training Institutes for Job Assurance to train 4 million workers and the revitalisation of Handloom Cooperatives on the pattern of agricultural cooperatives and devising a strategy to expand market, diversify and realise greater value for textiles products.

Technical Textiles

The Technical Textiles are products used for their technical performance and functional properties. In pursuance of the announcement made by the prime minister, the government will shortly launch Technology Mission on Technical Textiles to build capacity, upgrade skills, create domestic and export market and standardise product development.

Besides, the government will implement 'Development and Growth of Technical Textiles' Scheme during the XIth Five Year Plan at an estimated cost of Rs 44 crore (Rs 440 million).

Four Centres of Excellence for technical textiles such as Meditech, Geotech, Agritech and Buildtech, will be set up under the scheme. The government intends to create a Development Council for Technical Textiles to identify the problems of the industry and suggest measures.

Infrastructure Development

The government is committed to develop world-class infrastructural and production facilities at handicrafts, handlooms, and decentralised powerlooms clusters with a minimum of 5,000 looms (handlooms and powerlooms) through adoption of a Comprehensive Cluster Development approach.

The following mega clusters will be taken up for development during this financial year:

Handlooms in Varanasi (Uttar Pradesh), and Sibsagar (Assam)

Handicrafts in Narsapur (Andhra Pradesh) and Moradabad (Uttar Pradesh)

Powerlooms in Bhiwandi (Maharashtra) and Erode (Tamil Nadu)

Integrated Textile Parks

The Scheme for Integrated Textile Parks was launched in July 2005 to strengthen infrastructural facilities in potential growth areas. Till March 31, 2008, 30 Integrated Textile Parks had been sanctioned.

These Parks will attract an investment of Rs. 16,953 crore (Rs 169.53 billion) and when operationalised, will create employment (direct and indirect) for 5.75 lakh workers, and produce goods worth Rs. 27,386 crore (Rs 273.86 billion) annually.

The scheme will continue during the XIth Five Year Plan. The government has earmarked Rs 450 crore (Rs 4.5 billion)for the Scheme during 2008-09. There is a proposal to develop ten additional parks during the XI th Five Year Plan.

The Palladam Hi-Tech Weaving Park, Tamil Nadu set-up under the SITP Scheme was inaugurated on April 19, 2008. The Park will provide employment to about 5,000 people. The remaining 29 parks will be completed by 2008-09.

Technology Upgradation

Recognising technological obsolescence as the main impediment to the growth of the textiles Industry, the government gave a new impetus to the Technology Upgradation Fund Scheme, which ensures the availability of bank finance, at rates comparable to global rates, to modernise the production facilities.

All the segments of the textiles industry are getting benefits under the Scheme. The efforts of the government have brought results; the Scheme had attracted 11,279 applications till March 31, 2007, involving an investment of Rs 93, 447 crore (Rs 934.47 billion).

The government has provided Rs 1,140 crore (Rs 11.4 billion) for the scheme during 2008-09. The scheme will continue till 2012.

Increased Plan Allocation

The textiles sector is seen as the main engine of growth and provider of employment opportunities. In 2007-08, the Plan allocation to textiles was Rs 2,243 crore (Rs 22.43 billion) which was 66.21 per cent higher than that of the previous year -- second only to the Department of Secondary Education & Higher Education, Ministry of Human Resource Development.

In 2008-09, Plan Allocation has shot up by over 11.45 per cent (Rs 2,500 crore or Rs 25 billion) over a much larger base. This shows the commitment of the government to develop the sector in a sustainable manner.


Investment has increased to touch Rs.1,50,600 crore (Rs 1,506 billion) by 2012. This enhanced investment will generate 17.37 million jobs (comprising 12.02 million direct and 5.35 million indirect jobs) by 2012. Investment in the textiles and clothing sector in the past three years was Rs. 70,526 crore (Rs 705.26 billion).


Cotton is one of the principal crops and plays an important role in the textiles economy. It provides sustenance to millions and contributes significantly to the country's export earnings. In 2007-08, exports are expected to touch 65 lakh bales.

Consequently, cotton imports have declined from around 17 lakh bales in 2002-03 to 5 lakh bales in 2006-07. Imports are expected to be around 6.50 lakh bales in 2007-08. Since 2005-06, the country has become a net exporter of cotton.

The Technology Mission on Cotton (TMC) launched on February 21, 2000, comprises four mini missions of which mini missions III and IV have been extended to March 31, 2009 from March 31, 2007. Under mini mission III of the 250 market yard which were to be setup / revived, 127 market yards have been completed at an estimated cost of Rs.255 crore (Rs 2.55 billion).

Under mini mission IV of the 1000 ginning and pressing factory, 679 had been completed.


Announcement of first ever National Jute Policy in April 2005, decision to revive the National Jute Manufacturing Corporation by running three of its Jute Mills ( Kinnison, Khardah and RBHM Katihar), launch of the Jute Technology Mission in February 2007 at an estimated cost of Rs 355.00 crore (Rs 3.55 billion), substantial enhancement of minimum support price of raw jute, vigorous implementation of the Jute Packaging Material, (Compulsory use in Packaging Commodities) Act, 1987 and proposal to set up the National Jute Board to synergeis the activities of various organizations engaged in jute sector are some path- breaking measures taken by government for revival of the jute industry.

The Bill to set up National Jute Board is before the Parliament.

Textiles Export

Merchandise exports, particularly textiles, witnessed only a gradual growth during a major period of 2007-08, the main contributory factor being the appreciation of the Indian rupee by around 15 per cent since October 2006 vis-à-vis the dollar.

The government has taken steps by enhancing the Duty Entitlement Pass Book and Duty Drawback Rates, exempting Service tax on 12 services, reducing interest rates on pre-and post shipment credit, and facilitating faster clearance of arrears of terminal excise duties and Central Sales Tax.

In spite of a difficult global scenario, the government is confident of achieving the exports target set out for the XIth Five Year Plan. In 2007-08, the Textiles exports were $20.5 billion, against the target of $25 billion, registering a growth of 9.4 per cent in dollar terms against exports in 2006-07.

The exports grew only by 1.49 per cent between April-October 2007, but the situation improved radically in the later half of the fiscal, registering a total growth of 9.4 per cent.

Village and Small Enterprises Sector

Sericulture and Silk Textiles: The government introduced Silk Mark Scheme in June 2004 to promote the distinctive quality of Indian silk products. The Silk Mark scheme has given a new thrust to the brand promotion of Silk involving all the stake holders, i.e., from farmers to exporters. Approximately, 36 lakh Silk Mark labeled products have reached the market.

Wool And Woollen  Textiles: A new Scheme for Shepherd and Sheep Insurance introduced during the XIth Five Year Plan will cover 93,500 shepherds and 24 lakh sheep by 2012, at an estimated cost of Rs. 22.16 crore (Rs 221.6 million) by 2012.

Handlooms: During the XIth Five Year Plan, 625 clusters each with 300-500 looms will be taken up for development, at an estimated cost of Rs 60 lakhs (Rs 6 million) per cluster.

The government is committed to the welfare of weavers who form the lowest rung of the society. The new Health Insurance Scheme (in place of the earlier one) was launched on November 3, 2005.

The scheme covers all pre-existing and new diseases. Mahatma Gandhi Bunker Bima Yojna launched on October 2, 2005, in collaboration with the Life Insurance Corporation of India Ltd, covers natural and accidental deaths.

To give a distinctive identity to handlooms products, the Handloom Mark was launched on June 28, 2006, and till March 2008, 76.54 lakh Handloom Mark labels had been sold, and 544 handloom showrooms were selling products bearing the Handloom Mark label.

Handicrafts: The handicrafts sector has emerged as one of the most important foreign exchange earners for India on a sustained basis.

The progress in terms of product range, number of companies and value of exports has been tremendous. However, the exports in 2007-08 were Rs175.37 crore ($4.36 billion) indicating a declining trend. The appreciation of Indian rupee against the dollar had been one of the causes for this.

Human Resources Development

The National Institute of Fashion Technology Act, 2006 empowers NIFT to award degrees to its students from 2007 onwards.

The President of India is the visitor of the Institute. The Institute has pioneered the evolution of fashion business education across the country through seven centres at New Delhi, Bengaluru, Chennai, Gandhinagar, Hyderabad, Kolkata, Mumbai, and Rae Bareli.

The Foundation Stone of NIFT centre at Kannur, Kerala was laid by the Minister of Textiles Shri Shankersinh Vaghela, on April 19, 2008. The government is seriously considering a proposal to confer the status of Centre of Excellence on the Sardar Vallabhhai Patel Institute of Textiles Management during the XIth Five Year Plan for which a vision document is under preparation.

National Textiles Corporation

The Modified Revival Scheme for the National Textiles Corporation, at an estimated cost of Rs. 5,267 crore (Rs 52.67 billion), was approved by the government on December 5, 2006. This scheme will be financed through interest free loans of Rs 528 crore (Rs 5.28 billion) from the government, and Rs 4,739 crore (Rs 47.39 billion) will accrue from the sale of land and other assets.


  • The first major sale of 5 mills land in Mumbai by the Corporation between the months of January to July, 2005 at a consideration of Rs. 2,200 crore (Rs 22 billion).
  • The above funds were the main source for initiating the Revival Scheme.
  • Modernisation of 22 mills at a cost of Rs 530 crore (Rs 5.3 billion).
  • 15 mills will be modernised by May 2008.
  • Mobilised Rs. 4,033 crore (Rs 40.33 billion) by sale of assets of the closed mills and surplus assets of the viable mills.
  • Closed down 67 unviable mills and 2 mills had been handed over to government of Puducherry. Paid Rs. 2,100 crore (Rs 21 billion) towards MVRS compensation to its employees in the closed mills.
  • NTC proposes to develop an Indian Textiles Plaza in Ahmedabad, and an International Trade Tower at Mumbai.

Looking Ahead

Today, the industry is increasingly embracing modern technology and work processes, becoming more globally competitive, building strong brand equity for its products, and consistently achieving higher growth rates than ever in its long history.

The challenges are many. The government is committed to transform what is today an emerging or sunrise sector, into a developed industry.

Inputs from the ministry of textiles; Courtesy:

Commodity Online