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Part - V
It is believed that China is vacating the 'commodity' end comprising yarn and grey fabric, and moving into high value processed fabrics, with sizeable investments in value-added processes. Meanwhile, India is still in the phase of upgrading at the commodity end. In addition to China, other developing countries are emerging as serious competitive threats to India. Looking at export shares, Korea (6%) and Taiwan (5.5%) are ahead of India, while Turkey (2.9%) has already caught up along with others like Thailand (2.3%) and Indonesia (2%).
| (% of Total Cost) |
Brazil |
India |
Indonesia |
Italy |
Korea |
Turkey |
USA |
| Packing |
1% |
1% |
1% |
1% |
1% |
1% |
1% |
| Labor |
9% |
6% |
4% |
28% |
18% |
9% |
25% |
| Power |
8% |
16% |
8% |
26% |
10% |
14% |
26% |
| Auxiliary |
13% |
13% |
15% |
7% |
15% |
11% |
7% |
| Capital |
43% |
35% |
50% |
22% |
28% |
44% |
23% |
| Raw Material |
26% |
29% |
22% |
16% |
28% |
21% |
18% |
| Total |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
Competitiveness: Total Costs of Woven Textured Yarn Fabric
The reason for this situation is the fact that India lags behind these countries in investment levels, technology, quality and logistics. If India were competitive in some key segments it could serve as a basis for building a modern industry, but there is no evidence of such signs, except to some extent in the spinning industry.
An Outlook into the Indian Future - The Chinese Challenge
The modern communications revolution has led to the formation of a global village. And the tussle for market shares has already begun. The textile industry is not immune from this global wind. By 2005, the multi-fiber arrangement is due to expire, leading to intense competition.
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* Contributed by -
Siddharth Mohan Patnaik, B.Tech. (Electronics),
Ravulpathi Janaki, B.Tech. (Mechanical),
II Year, IIM Lucknow.
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