Benefits From Investing In Textile Industry Essay

The fabric industry, being one of the most important sectors in the Indian economic system, has been a cardinal focal point country for the Government of India. A figure of policies have been put in topographic point to do the industry more competitory. These all prescribed strategies turn out different benefits in the signifier of inducements.

The Technology Up step Fund Scheme

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Integrated Textile Parks Scheme

Scheme for Handlooms

Health Insurance Scheme

Quality Improvement
The Textile Commission, under the Ministry of Textiles, facilitates houses in the industry to better their quality degrees and besides acquire recognized quality enfranchisement.

Foreign Direct Investment ( FDI ) Policy
100 % FDI is allowed in the fabric sector under the automatic path. FDI in sectors to the extent permitted under automatic path does non necessitate any anterior blessing either by the Government of India or Reserve Bank of India ( RBI ) . The investors are merely required to advise the Regional Office concerned of RBI within 30 yearss of reception of in word remittal.

Abundant handiness of Raw Materials





Low costs
India has significantly lower natural stuff costs, wastage costs and labour costs when compared to other states. A recent survey estimated India ‘s labor costs ( entire employment cost for labour across industries ) to be amongst the lowest ( 2.024 Euro ) in the universe, a sixth of even China ‘s ( 13.88 Euro )

Manufacturing flexibleness
The disconnected industry construction and little mean graduated table of operation in India ‘s fabric industry has created the capableness for enhanced flexibleness in production. Indian houses are used to managing small-runs, and have skilled work force with the ability and willingness to work on complex designs. Therefore India has the ability to bring forth non merely big orders but besides smaller and complex orders. In contrast, the fabric industry in other states like China is more industrialised, and production lines are largely geared to manage comparatively simple designs that can be easy broken down and mass-produced. The flexibleness offered by India ‘s fabric industry can be a important advantage for the manner industry, which typically demands little tonss of complex designs. India besides offers flexibleness in its ability to manage different stuffs such as cotton, wool, silk and jute, with equal accomplishment. These advantages besides enable the Indian industry to bring forth high value customized dress that is progressively finding demand in several exports markets.

Lower lead times
India is one of the few developing states today with a to the full developed fabric value concatenation widening from fiber to fabric to dress exports. The presence of capablenesss across the full value concatenation within the state is an advantage as it reduces the lead clip for production and cuts down the intermediate transportation clip. Indian fabric houses have leveraged this advantage to incorporate their operations, either frontward or rearward. For illustration, Arvind Mills, the largest manufacturer of blends and jean in the state and the 3rd largest jean manufacturer globally, supplies fabric to virtually every major vesture trade name in the universe, such as Levi ‘s, Gap, Dockers and so on. Three old ages ago it integrated frontward into garment fabrication ( denims and Jerseies ) , puting more than $ 30 million in 10 new mills.

Favorable demand conditions – big, turning domestic market
Demographic tendencies in India are altering, with addition in disposable income degrees, consumer consciousness and leaning to pass. Harmonizing to NCAER informations, the Consuming Class, with an one-year income of US $ 980 or above, is turning and is expected to represent over 80 per cent of the population by 2009-10. There is a alteration in the consumer mentality that has led to a tendency of increased ingestion on personal attention and lifestyle merchandises every bit good as branded merchandises. These tendencies offer great growing chances for companies across assorted sectors, including fabrics. Supporting the increasing demand for ingestion is the revolution taking topographic point in India ‘s retail sector. Organized retail is playing a cardinal function in structuring the Indian domestic market, reinforced by the rapid rise of supermarkets, promenades, subject shops and franchises across urban India. India therefore presents a big and vivacious market for fabrics and dresss, with a possible for sustained growing.

Strong presence of related and back uping industries
India ‘s fabric industry is supported by good established back uping industries and establishments that provide inputs and expertness to the industry in footings of design, technology and machinery.

Product development/ design
India has built equal substructure throughout the assorted phases in fabric development, that is, design, sourcing, selling and production. Apart from institutes such as NIFT ( National Institute of Fashion Technology ) and Apparel Training Institutes, there are several colleges, including the Indian Institutes of Technology and National Institutes of Technology that offer courses in Textile Engineering. Thus, India has the substructure in topographic point to bring forth qualified and skilled work force in countries of fabric design and technology Indian houses have leveraged this strength to develop a competitory advantage – the ability to lend to the design, non merely in fixing samples and paradigms, but besides in interpreting constructs into assortments of finished designs, every bit good as presenting designs of their ain. Several Indian houses have their ain design sections and in the last five old ages have begun to work closely with abroad interior decorators and/or agents. High value, up-market forte purchasers value such expertness and have been leveraging this while purchasing from India.

Fabric machinery
The Indian fabric technology industry, which began as an outgrowth of the fabric industry, is today reckoned as the largest section in the state. Indian fabric machinery makers are able to bring forth at competitory monetary values sophisticated machines of higher velocity and production capableness. The fabric industry besides gets important support from the well developed IT capablenesss of Indian houses.

Industry competition – promotes invention
Despite a big and turning market, the presence of a big figure of little graduated table participants makes the Indian fabric Industry extremely competitory. A figure of MNCs have besides entered India in different countries. The high degree of competition in the industry impels the houses to work to increase in productiveness and invention. India today is one of the lowest cost makers of quality fabrics, non merely due to its built-in strengths, but besides because industry competition has prompted houses to concentrate on quality betterment, cost decrease and productiveness addition.

Favorable Policy Enterprises
The Indian Government is seeking to make an environment to pull an investing of Rs 1,400 billion in the Eleventh Plan period ( 2007-2012 ) when the fabrics and garment exports are expected to lift from the current US $ 14 billion to US $ 40 billion. The Multi Fiber Arrangement ( MFA ) that came to an terminal on January 1, 2005 has opened up a overplus of chances for the Indian fabric industry. Global trade in fabrics is expected to increase to US $ 600 billion by 2010 from US $ 356 billion in 2003. The phasing-out of MFA has ensured that quota limitations in US, European Union and Canada which restricted fabric and dress exports from India to these parts have been removed. India and China are the two states poised to deduce the maximal benefit from the phasing out of MFA. India ‘s quota allotment for of import markets likes the US, EU and Canada was really low.

By analysing all benefit of fabric industry, an investor can anticipate a high rate of return on investing which is done in fabric industry.


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