The Indian Textiles Industry has an overwhelming presence in the economic life of the country.  Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country.

Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 13.50 percent to the country’s export earnings. It provides direct employment to over 35 million people, which includes a substantial number of SC/ST, and women.

The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.

Due to policy measures initiated by the Government in the recent past, the Indian textiles industry is in a stronger position than it was in the last six decades.

The industry which was growing at 3-4 percent during the last six decades has now accelerated to an annual growth rate of 16 percent in value terms and will reach a level of US $ 115 billion (exports US $ 55 billion; domestic market US $ 60 billion) by 2012, from US$ 52 billion in 2007-08.

The catalyst for this exponential growth is a buoyant domestic economy, substantial increase in cotton production, a conductive policy environment provided by the Government, and the end of the Multi Fibre Arrangement (MFA), on December 31, 2004.

The rationalization of fiscal duties undertaken during the last four years, has also provided a level playing field in all segments of the industry, resulting in the holistic growth of the industry. A strong foundation for industry has been laid on which world class manufacturing units can realize their full potential and make a mark in the international economy.

The growth manifests through a consistent increase in production of fabric, per capita availability of cloth and investments. During 2007-08, the total production of fabric was 57 billion sq mtrs, compared to 53 billion sq mtrs in 2006-07 and 50 billion sq mtrs in 2005-06. During 2006-07, the per capita availability of cloth was 39.60 sq mtrs, compared to 36.10 sq mtrs in 2005-06 and 33.10 sq mtrs in 2004-05.

The textiles sector has witnessed a spurt in investment during the last four years, increasing from Rs. 7,941 crore in 2004-05 to Rs. 16,194 crore in 2005-06, to Rs. 61,063 crore in 2006-07, and to Rs. 19,308 crore in 2007-08.

The investment between 2004-08 was Rs. 1,04,506 crore and it is expected that investments will touch Rs. 1,50,600 crore by 2012. This enhanced investment will generate 17.37 million jobs (comprising 12.02 million direct and 5.35 million indirect jobs) by 2012.

The main engine of investment has been the Technology Upgradation Fund Scheme (TUFS). The increased investment will help to upgrade technology, strengthen infrastructural facilities at potential textiles growth areas, increase the installation of additional spindles and looms. Besides, it will provide a fillip to the garmenting, technical textiles and processing segments of textiles industry, which have a great potential for value addition and employment generation.

During the last four years, the Government has successfully fulfilled the promises made in the National Common Minimum Programme (NCMP):

(i) Investment has increased significantly in the textiles sector, and is expected to touch Rs.1,50,600 crore by 2012.  This enhanced investment will generate 17.37 million jobs (comprising 12.02 million direct and 5.35 million indirect jobs) by 2012.

(ii) Investment in the textiles and clothing sector in the past three years increased from Rs. 7,941 crore in 2004-05 to Rs. 16,194 crore in 2005-06, and Rs. 61,063 crore in 2006-07, and Rs. 19,308 crore in 2007-08  amounting to a total investment of Rs. 1,04,506 crore.

(iii) The textiles industry which was growing at 3-4 percent during the last six decades has now accelerated to an annual growth rate of 16 percent in value terms and will reach a level of US $ 115 billion (exports US $ 55 billion; domestic market US $ 60 billion) by 2012, from US$ 52 billion in 2007-08.

(iv) The Indian textiles industry, particularly the spinning sector, has been in a rapid modernization and expansion mode in recent years, adding 2 to 2.5 mn spindles every year.

(v) The total fabric production  in 2006-07 is estimated at 53 billion sq mtrs,compared to 50 billion sq mtrs in 2005-06 and 45 billion sq mtrs in  2004-05.

(vi) The per capita availability of cloth in 2006-07  was 40.2 sq mtrs, compared to 36.10 sq mtrs in 2005-06 and 33.50 sq mtrs in 2004-05.

(vii) Textiles exports grew from US$ 14 billion in 2004-05 to US$ 17.52 billion in 2005-06 at an average of nearly 25%. These were US$19.14 billion in 2006-07, registering an increase of 9.3%.

(viii) Textiles exports during 2007-08 were US$21.46 billion, registering a growth of 12.10%.Textiles exports in 2008-09 will be 20% more than what were achieved in 2007-08.         

(ix) In order to introduce state- of-the- art technology in the industry,the Technology Upgradation Fund Scheme (TUFS) has been continued in the XIth Five Year Plan. During its initial years, the progress of the scheme was moderate, and it gained momentum from 2004-05 onwards.

(x) From its inception till March 31, 2008, 18,925 applications have been received, involving a project cost of Rs. 1,23,664 crore, and 18,773 applications have been sanctioned at an estimated project cost of Rs. 1,22,087 crore. During 2007-08, Rs. 43,700 crore was disbursed, registering a growth of 16.46% on year to year basis.

(xi) The Scheme for Integrated Textiles Parks (SITP) was launched in July 2005 to strengthen infrastructural facilities in potential growth areas. So far, 40 Integrated Textiles Parks had been sanctioned. These Parks will attract an investment of Rs. 21, 502 crore; and when operationalised, will create employment (direct and indirect) for some 9.08 lakh workers, and annually produce goods worth Rs. 38, 115 crore.  The Scheme will continue till 2012.

• The Palladam Hi-Tech Weaving Park, set-up under the SITP Scheme, was inaugurated by P. Chidambaram, Minister of Finance in the presence of Shankersinh Vaghela, Minister of Textiles on April 19, 2008. The Park will provide employment  to approx. 5,000 people.
  
  
• The Brandix India Apparel City Park, Vishakapatnam, Andhra Pradesh and Pochampally Handloom Park, Pochampally, Andhra Pradesh have become operational. These parks will provide employment  to approx. 1.50 lakh  people and annually produce goods worth Rs. 7, 035 crore.
  

(xii) Due to focused support to cotton growers, cotton production reached 244 lakh bales (170 kg. each) in the cotton season (October-September) of 2005-06, 270 lakh bales in the cotton season of 2006-07, and was 315 lakh bales, a record, in the cotton season of 2007-08. The productivity jumped from 399 Kg./hectare in the cotton season of 2003-04 to 560 kg./hectare  in the cotton season of 2007-08.

(xiii) 58 lakh bales of cotton were exported in 2006-07 against 47 lakh bales in2005-06, and 0.84 lakh bales in 2002-03. In 2007-08, exports were  100  lakh bales.

(xiv) 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.

(xv) Due to the persistent demand of the Industry the Government abolished import duty of 14.7%, and drawback benefits of 1% on raw cotton w.e.f. July 8, 2008. This measure has helped to stabilise prices.

(xvi) The first  "TEX-SUMMIT 2007" was organised (August 31 - September 1, 2007) in association with the industry to deliberate on problems facing it. Dr. Manmohan Singh, Prime Minister of India, in his valedictory address to the Summit announced the following initiatives:

• Technology Mission on Technical Textiles
  
  
• Investment Regions for  the Textiles Sector
  
  
• Finalisation of a Scheme of Neighbourhood Apparel and Textiles Training Institutes for Job Assurance  (NATIJA) to train 4 million workers.
  
  
• The Revitalisation of Handlooms Cooperatives on the pattern of agricultural cooperatives.

(xvii) Strategy to expand markets, diversify and realise greater value for textiles products.

(xviii) A New scheme titled "Development and Growth of Technical Textiles" will be implemented during the XIth Five Year Plan. The Scheme plans to set up 4 Centres of Excellence (COE) for technical textiles. These are Meditech, Geotech, Agritech and Buildtech.

(xix) The Modified Revival Scheme (MRS) for the National Textiles Corporation (NTC), at an estimated cost of Rs. 5,267 crore, was approved by the Board for Industrial & Financial Reconstruction (BIFR) on March 28, 2006.  It was approved by the Government on December 5, 2006. This scheme will be financed through interest free loans of Rs. 528 crore from the Government of India, and Rs. 4,739 crore will accrue from the sale of land and other assets.

(xx) The Finlay Mill of NTC is being relocated  from Mumbai to Achalpur, District Amravati, Maharashtra.The President, Pratibha Devisingh Patil laid the foundation stone of  this greenfield project at Achalpur on September 6, 2008.

• The green field project will provide employment to 1,284 persons. The cost of  modernization is Rs. 236 crore and the first phase will operationalise by March 2009.
  

(xxi) The National Jute Policy was announced on April 15, 2005. The Jute Technology Mission at an estimated cost of Rs. 355 crore was launched in February 2007.

(xxii) Six Jute parks will be set up by 2012, of these three sites have been shortlisted at West Bengal and one at Rajasthan.

(xxiii) Government have placed a  Jute Board Bill before Parliament to set-up the Jute Board to bring about better co-ordination and efficiency in various organisations in the Jute Sector.

(xxiv) Government have decided to revive National Jute Manufacturing Corporation (NJMC) by running three of its Jute Mills (Kinnison, Khardah and RBHM Katihar).

(xxv) The National Institute of Fashion Technology Act, 2006 came into force on April 11, 2007.  This Act provides statutory status to the Institute, and formally recognizes its leadership in the fashion technology sector. The Act empowers NIFT to award degrees to its students from 2007 onwards. The President of India is the visitor of the Institute.

• A new centre was opened in Rae Bareli in Uttar Pradesh on February 13, 2007, which was inaugurated by  Sonia Gandhi, Chairperson, United Progressive Alliance (UPA).
  
  
• The Foundation Stone of NIFT centre at Kannur, Kerala was laid by Shankersinh Vaghela, Minister of Textiles on April 19, 2008.
  
  
• New NIFT centres have opened at Patna, Shillong and Bhopal. The Shillong centre was inaugurated on August 11, 2008. Government has also opened a NIFT sponsored centre at Mauritius.

(xxvi) Government will develop world-class infrastructural and production facilities at handicrafts, handlooms, and decentralised powerloom clusters with a minimum of 5,000 looms (handlooms and powerlooms) through adoption of a Comprehensive Cluster Development approach. Initially, the Government proposes to take up the following mega clusters for development:

Handloom in Varanasi (Uttar Pradesh), and Sibsagar (Assam)
Handicrafts in Narsapur (Andhra Pradesh) and Moradabad (Uttar Pradesh)
Powerlooms in Bhiwandi (Maharashtra) and Erode (Tamil Nadu)

(xxvii) In 2007-08, an additional 251 clusters with 300-500 handlooms, were taken up for their comprehensive development under the Integrated Handlooms Development Scheme. Each cluster will be developed at an estimated cost of Rs. 60 lakh.

(xxviii) The National Handicrafts Design Gallery at Rajiv Gandhi Handicrafts Bhawan was inaugurated by Shri. Shankersinh Vaghela, Minister of Textiles on July 21, 2008. The 5,000 sq.ft. gallery will showcase a wide range of hand crafted master creations of National award  winning  artisans and Shilp gurus for public and  business   community.

(xxix) The Handloom Mark was launched by Dr. Manmohan Singh, Hon'ble Prime Minister of India on June 28, 2006, to promote handlooms.

(xxx) The Health Insurance Scheme of Handloom Weaver was launched on Nov 3, 2005. The Mahatma Gandhi Bunkar Bima Yojana was launched on October 2, 2005. During XI Year Plan both the above scheme has been amalgamated life into Scheme viz., Handloom Weavers Comprehensive Welfare Scheme.

Cotton is one of the principal crops of the country and is the major raw material for the domestic textiles industry. It provides sustenance to millions of farmers and contributes significantly to the country’s export earnings. The Indian textiles industry consumes a diverse range of fibres and yarn, but is predominantly cotton based. The ratio of the use of Cotton to Man-made fibres and filament yarns by the domestic textiles industry is 56:44.

Presently, India is the second largest producer of cotton (4.13 mn. metric tones), accounting for 16 per cent of global production, with the largest cultivated area in the world (96 lakh hectares in the cotton season of 2007-08 (October- September) ). The States of Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka and Tamil Nadu accounts for 99 per cent of cotton  production in the country.

MAJOR INITIATIVES:
Due to focused support provided by the Government to farmers, cotton production was 315 lakh bales (170 kg. each), a record in the cotton season of 2007-08. The productivity of cotton has jumped to 560 kg/hectare in the cotton season of 2007-08, from 399 kg/hectare in the cotton season of 2003-04. Since 2005-06, the country has become a net exporter of cotton. In 2006-07, 58 lakh bales of cotton were exported against 47 lakh bales in 2005-06, and 0.84 lakh bales in 2002-03. In 2007-08, exports of raw cotton exceeded the target of 65 lakh bales and were 85 lakh bales, mainly due to fall in acerage in the USA and higher global demand. Consequently, cotton imports have declined from around 17 lakh bales in 2002-03 to 5 lakh bales in 2006-07. The Imports were around 6.5 lakh bales in 2007-08.

From October-end 2007 till July 2008, the cotton prices had been higher by around 20% to 40% compared to last year. The opening cotton prices during the fiscal 2007-08 had been higher by around 4% to 17% as compared to previous year. This was affecting the viability of textiles mills, and, on the persistent demand of the Industry, the Government abolished import duty of 14.7%, and drawback benefits on raw cotton w.e.f. July 8, 2008. The measure has helped to stabilize prices.

A significant increase in the cotton production has increased the availability of raw cotton to the domestic textiles industry at competitive prices, providing it with a competitive edge in the global market. The reasons for increase in the production include increasing usage of Bt cotton and the implementation of the Technology Mission on Cotton (TMC). The area under the Bt cultivation, which was around 5 lakh hectares in the cotton season of 2003-04, has gone up to 66 lakh hectares in the cotton season of 2007-08, and is expected to be 86 lakh hectares in the cotton season of 2008-09. It is estimated that cotton production during the cotton season of 2008-09 will be around 322 lakh bales, up 2.17% over the previous season’s figure of 315 lakh bales. The cotton exports are estimated at 75 lakh bales, and productivity will be 591 kg/hectares, a record.

TECHNOLOGY MISSION ON COTTON (TMC):
TMC was launched in February 2000 to improve the quality and productivity of cotton, reduce contamination and the cost of production of cotton, and provide the much-needed competitive advantage to the Indian textiles industry. Another objective was also to ensure attractive returns to the farmers.

The TMC comprises four Mini-missions:

1. Mini-mission I - Strengthening of Research & Development of high yield and hybrid verities.
2. Mini-mission II – Transfer of Technology to farmers.
3. Mini-mission III – Improvement of Marketing Infrastructure.
4. Mini-mission IV – Modernisation/ Upgradation of Ginning and Pressing Factories.

The Ministry of Agriculture was the nodal Ministry to implement  mini-missions I and II, and the Ministry of Textiles for  mini-missions III and IV. TMC was to remain operational till March 31, 2007, but mini-missions III and IV have now been extended till March 31, 2009.

Progress till September 2008:

Mini-Mission- III:         

• Development of 250 market yards (including new market yards and also improvement of existing ones) has been sanctioned.
  
  
• 142 market yards had been completed at an estimated cost of Rs. 496 crore. The share of the Government of India is Rs. 255 crore.

Mini-Mission- IV:

• Modernization of 992 ginning and pressing factories out of 1,000 factories has been sanctioned.
  
  
• 748 factories had been modernized at a cost of Rs.1,444 crore.  The share of the Government of India is Rs. 227 crore.         
  

Contract Farming:
The Cotton Corporation of India Ltd. (CCI), a Public Sector Undertaking under the Ministry of Textiles, has covered about 40,000 hectares under the Cotton Contract Farming Scheme during the cotton season of 2007-08, as compared to 33,200 hectares in the cotton season of 2006-07, in association with leading textiles mills/ State organizations. The Scheme aims to enhance productivity of cotton through provision of inputs, training and extension services to farmers. CCI monitors the crop and purchases the entire produce from farmers, at prevailing market prices. The Scheme covers all the major cotton growing States.

Minimum Support Price Operations:
The Government is operating the Minimum Support Price (MSP) Scheme through the agency of CCI to ensure a minimum return to the farmer even in the depressed market conditions. The support price are fixed by the Government for two basic varieties of cotton of fair average quality, recommended by the Commission for Agriculture Costs and Price (CACP). While one is the medium long staple length group of 25 mm-27 mm of the variety F414/H-777/J-34, the other is the long staple group of 27.5 mm-32mm which is of the variety H-4. Based on the support price of these two basic varieties and taking into account the normal price differential and other relevant factors, the MSP for other varieties of seed cotton of fair average quality are fixed by the Textiles Commissioner. In the Cotton season of 2007-08, CCI under commercial operations, purchased 7.65 lakh bales, valued at Rs. 9.21 crore, compared to 2.71 lakh bales valued at Rs. 286 crore in the cotton season of 2007-08. CCI purchased 12 lakh  quintal of Kapas (cotton with seed) equivalent 2.25 lakh bales valuing Rs. 249 crore in Andhra Pradesh & Orissa, under MSP operations during 2007-08. 

The MSP of medium staple cotton of length group 24.5 mm to 25.5 mm, has been raised by 39% to Rs. 2,500 per quintal in the cotton season of 2008-09. The MSP last year was Rs. 1,750 to 1,800 per quintal. The MSP for long staple variety of length group 29.5 mm to 30.5 mm has been raised to Rs. 3,000 per quintal in the cotton season of 2008-09 from Rs. 2,250 per quintal in the cotton season of 2007-08.

Amelioration of condition of Cotton Farmer:
The measures adopted by the UPA Government in recent past have helped to ameliorate the condition of cotton farmers in the country, particularly in Maharashtra. The main reasons have been:

• Hike in MSP for H-4 grade long staple cotton in Maharashtra to Rs. 2,030 in the cotton season of 2007-08 from Rs. 1,990 in the cotton season 2006-07, and Rs. 3,000 per quintal in the cotton season of 2008-09.
  
  
• Increase in the yield of Cotton in Maharashtra from 207 kg. per hectare in the cotton season of 2005-06 to 274 kg. per hectare in the cotton season 2006-07 and 330 kg. per hectare in the cotton season 2007-08.
  
  
• The cost of cultivation has come down due to increased sowing of Bt cotton seeds.

The Government is committed to protecting the interests of workers in closed private mills through the Textiles Workers Rehabilitation Fund Scheme (TWRFS). The scheme provides monetary relief for three years on a tapering basis to eligible workers to the extent of:

• 75% of the wage equivalent in the first year;
  
  
• 50% of the wage equivalent in the second year; and,
  
  
• 25% of the wage equivalent in the third year.

(xxxi) Till 2008-09 (up to August 2008), 95,241 workers had been covered under the scheme, and Rs. 239 crore was disbursed to them.

(xxxii) The Government will spare no effort till each eligible worker in the closed mills gets his due.

(xxxiii) During 2008-09, Government has released Rs. 38 crore under TWRFS.

TWRF Scheme progress Report from June 6, 1985 to August 31, 2008:

The performance of TWRFS during last the 5 years is detailed below (Rs. in lakh):

(xxxiv) During the last four years the performance of TWRFS has shown a quantum jump.

(xxxv) The number of beneficiaries had increased by 260% in 2007-08, compared to 2006-07.

(xxxvi) Shankersinh Vaghela, Minister of Textiles presided over TWRFS relief distribution programme for the workers of M/s Binny Mills, at Bengaluru, on September 12, 2008, and  presented relief cheques of Rs. 76.55 lakh to 200 workers, of 21,200 eligible workers for assistance.  The total assistance to be paid is Rs. 9 crores.

(xxxvii) Shankersinh Vaghela, Minister of Textiles presided over TWRFS relief distribution programme held at Kannur, Kerala on Sept 13, 2008, and presented relief cheques of Rs. 2.38 crore to 417 workers of M/s Thiruvepathy Mills, Kannur.

(xxxviii) Shankersinh Vaghela, Minister of Textiles presided over TWRFS relief distribution programme held at Mysore, Karnataka on September 13, 2008, and distributed relief cheques of Rs. 1.43 crore to 389 workers of M/s K.R. Mills Mysore, M/s Dunford Fabrics Limited and M/s Sujata Mills, Nanjangud, Karnataka.

(xxxix) During 2008-09 (Up to September 15, 2008), 2,458 workers have been provided relief under the Scheme and Rs. 10.15 crore has been disbursed. During the rest of year. Rs. 28 crore will be disbursed.