1. THE INDIAN TEXTILE INDUSTRY and ITS RELATIONS WITH European Union Presented by:- Pallavi Gupta 500901036 ShrayJali 500901062 Sumit Sharma 500901063

2. Roadmap of the Presentation Why did we choose the Indian textile industry? SWOT Analysis of Indian Textile Industry Agreements related to textiles Government initiatives European Union India- EU trade relations Conclusion

3. Why Indian Textile Industry? Sunrise Sector The textile industry is the one of the largest industries of modern India as it contributes about 14 % to industrial production, 4 % to the country's GDP 17 %to the country’s export earnings 12% share of the country's total exports basket [Source: Annual Report 2009-10 of the Ministry of Textiles] Single largest employer in the industrial sector employing over 35 million people

4. Indian Textile Industry

6. Vision To ensure the growth of the Indian textile industry at 16 percent per annum in value terms, to US$ 115 billion, by the end of the Eleventh Five Year Plan (2007-2012) To secure a 7 percent share in global textile trade by the end of the Eleventh Five Year Plan. Source: planningcommission.nic

7. Catalysts for exponential growth Buoyant Domestic economy Substantial increase in cotton production Government Policies TUFS Quotas Expiration of MFA on 31st Dec’ 2004

8. Problems and Challenges Sickness Obsolete Technology Cotton grown per hectare of land is very low Competition from man-made fibers

9. FDI in Textiles FDI in Textiles [Source: cci.in]

10. Export Promotion Councils Apparel Export Promotion Council (AEPC) Sponsored by Ministry of Textile Monitors Quotas and conducts trade fairs Cotton Textile Export Promotion Council Autonomous, non-profit export promotion council International face of Indian textile Handloom Export Promotion Council Statutory body Indian Silk Export Promotion Council

11. SWOT ANALYSIS

12. Strengths Independent and self-reliant Vertical and horizontal integrated textile value chain Globally competitive spinning industry Low wages Unique strength in traditional handlooms and handicrafts

13. Weaknesses Highly fragmented and technology backward textile processing sector Except spinning, all other segments are predominantly in decentralized sector Rigid labour laws Infrastructural bottlenecks in terms of power, utility, road transport, port handling capacities etc. Higher taxes and interest rates

14. Opportunities Large potential domestic and international market Revolution in organized retailing Increased disposable income Availability of cheap finance Emerging retail stores and malls

15. Global recession triggered by a weakening dollar Higher competition from China, Pakistan, Bangladesh Non-availability of indigenous textile machinery. Lack of domestic capital

16. Porter Diamond Model

18. Low cost

19. Flexibility

20. Skilled labour

21. Ability to produce customized apparels

22. Dominated by unorganized sector

23. Highly competitive and fragmented

24. Entry of foreign players

25. Large domestic potential

26. Favourable demographics

27. Growing income and purchasing power

28. Growth of organized retail malls

29. Product development /design

30. Cheap and abundant raw material

31. Well developed IT capabilities

34. Non-Tariff Barriers

35. Short –term agreement

37. In US textile and apparel imports, China and Hong Kong had higher market shares than India.

38. The effect of trade liberalization on India :

39. increased output

40. employment

43. To overcome technological obsolescence and create economies of scale

44. Transition from quantitatively restricted textiles trade to market-driven global merchandise

46. Launched to create new textile parks of international standards. Merging of APE & TCIDS Objective:to provide the industry with world-class infrastructure . SITP

47. EUROPEAN UNION

48. Birth of European Union After the second world war, Politicians in several countries of Europe were convinced that the only way prevent another war in Europe is to unite the countries economically and politically

49. European Union Members

50. Characteristics of European Union Single currency managed by European Central Bank (12/27 members) Free movement of persons, goods, services and capital Common Agricultural, Trade, Fisheries, Foreign and Security Policy

51. India-EU Trade Relations

52. Introduction Relations between ancient India, Greek, and Roman empires are 2000 years old. Relations between India and EU began in 1963 with EEC

54. India is one of the growing economies.

55. The EU is India’s first and largest partner.

58. In addition to multilateral and bilateral negotiations with India, the European Commission works on a day to day basis.

63. Developed countries contribute about one third of the total global exports of textile and clothing.

64. List of products and services which are exported from India.

65. India’s export stats to the world.

66. India Export to EU.Global Trade in Textile and Clothing

68. Asia predominates the EU market in both clothing and textiles, with 30% and 17 % share.

69. India is one of the leading suppliers of textile products and ranked fourth with a market share of 5.2% (US $ 0.45bn).

71. For the entire year 2009 a general decrease of 11% .

72. EU Textile and Clothing export figures, exports have decreased by 17% with a decline of textile exports by 18% and by 16% of clothing exports.

74. Present status of doing business with central and Eastern Europe, according to industry response:-

75. Plans for exporting the EU, Of the companies that are not presently exporting to the EU , 85% intent to export to this region in the near future. European Union-An important export destination

77. Present status of doing business with central and Eastern Europe, according to industry response:-

80. India needs to move from the lower-end markets.

81. The government also needs to make policy changes like dereserving the small-scale sector.

82. Handlooms by their very nature can adopt a strategy of “niche” marketing.

83. Need for a cradle-to-grave approach.