SWOT analysis of Indian Apparel & Textile Industry
SWOT analysis of Indian Apparel & Textile Industry
The Indian Textile industry adds 14% to the industrial production and 8% to the GDP of India. It provides employment to 38 million people and thus, is the second largest employment provider after agriculture. The Indian Apparel & Textile Industry is one of the largest sources of foreign exchange flow into the country with the apparel exports accounting for almost 21% of the total exports of the country. A systematic SWOT analysis of the textile and apparel industry indicates the following:-
1. STRENGTH
I. Raw material base
India has high self sufficiency for raw material particularly natural fibres. India’s cotton crop is the third largest in the world. Indian textile Industry produces and handles all types of fibres.
II. Labour
Cheap labour and strong entrepreneurial skills have always been the backbone of the Indian Apparel and textile Industry.
III. Flexibility
The small size of manufacturing which is predominant in the apparel industry allows for greater flexibility to service smaller and specialized orders.
IV. Rich Heritage
The cultural diversity and rich heritage of the country offers good inspiration base for designers.
V. Domestic market
Natural demand drivers including rising income levels, increasing urbanisation and growth of the purchasing population drive domestic demand.
2. WEAKNESS
I. More dependence on cotton
Due to over specialization in cotton, the bulk of the international market is missed out, synthetic products in India are expensive and fabric required for items like swimsuit, sky-wear and industrial apparel is relatively unavailable.
II. Spinning Sector
Spinning sector lacks modernization and there is a need of introducing new technology.
III. Weaving Sector
India has relatively less number of shuttle-less loom.
IV. Fabric Processing
Processing is the weakest link in the Indian textile value chain, adversely affecting its ability to compete in exports.
V. Poor Infrastructure
High power costs and long export lead times are eroding India’s export competitiveness across the textile chain.
VI. Low Labour Productivity
Productivity levels for manufacturing various apparel items are far lower in India in comparison with its competitors.
OTHER WEAKNESSSES
VII. Less attention on man power training
VIII. Poor quality standards
IX. Distance of the potential market
X. Lower average consumption in domestic market
XI. Lack of professionalism and integration of supply chain
XII. Dependence on quota system
XIII. Very low investment on R&D
XIV. Limited exploitation of economies of scale
3. OPPORTUNITIES
I. Growing Industry
World textile trade would continue to grow at a rate of 3-4% to reach $200-210 billon by 2010.
II. Market access through bilateral negotiation
The trade is growing between regional trade blocs due to bilateral agreements between participating countries.
III. Integration of Information technology
‘Supply Chain Management’ and ‘Information Technology’ has a crucial role in apparel manufacturing. Availability of EDI (Electronic Data Interchange), makes communication fast, easy, transparent and reduces duplication.
IV. Opportunity in High Value Items
India has the opportunity to increase its UVR’s (Unit Value Realization) through moving up the value chain by producing value added products and by producing more and more technologically superior products.
4. THREATS
I. Decreasing Fashion Cycle
There has been an increase in seasons per year which has resulted in shortening of the fashion cycle.
II. Formation of Trading Blocks
Formation of trading blocks like NAFTA, SAPTA, etc; has resulted in a change in the world trade scenario. Existence of bilateral agreements would result in significant disadvantage for Indian exports.
III. Phasing out of Quotas
India will have to open its protected domestic market for foreign players thus domestic market will suffer.
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