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Textile Industry Management

Factors Involved in Management of Textile Industry


India, officially known as the Republic of India is the largest country in South East Asia. On the basis of area covered it is the seventh largest country in the world and also the biggest democracy. It is also the second most populous country as it is home to more than 1.2 billion people (Riello and Parthasarathi, 2011). India is covered by oceans on three sides – Indian Ocean in the south, Arabian Sea on the South-West, and Bay of Bengal on South-East. It shares borders on west with Pakistan; China, Nepal and Bhutan to the North-East; and Burma and Bangladesh to the East. Current President of India is Mr. Pranab Mukherjee who is also the 13th president of India (Pal and Soriya, 2012). There are many industries and sectors that operate in the country and contribute heavily to national development and growth. Textile industry is one of the major industries after agriculture industry. It offers employment opportunities to both skilled and unskilled workers, thus making it one of the leading employers in the nation. In 2010, total contribution of the industry to exports was 11.04%. Similarly during 2009-10, Indian Textile Industry was calculated to be worth US$55 billion (Annual Report, 2010-11). It is expected that sector would continue to grow at the same pace in the coming years. This report is targeted especially towards those companies which would like to invest in this industry.

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SOCIAL factors

India is a multi-cultural country, as people belonging to various cultures, religions; traditions, etc. live in the nation. Thus, it may not be wrong to say that activities of business organizations, such as the ones operating in the textile industry to a great extent are affected by social and other such demographic factors (Joseph and Singh, 2013). There are a lot many demographic factors in India in which companies are operating in the textile industry must pay a lot of attention to, especially considering the fact that composition of the country in terms of demography has changed by great margins in the last few years. It can be supported through fact that more than 50% of the population is under the age of 25 years, while 65% is below 65 years (Nga and Shamuganathan, 2010). Therefore it may not be wrong to say that, the country has transformed into a young nation. Lifestyle of Indians has increased substantially as they now can afford high priced goods. Furthermore, residents of the country believe in leading a healthy life and have become highly health conscious. In addition to this, they also show an inclination to buy such products which are environment friendly and do not adversely affect it. In this sense, it can be said that the Indian people have developed a taste for such textile products which are fashionable as well as environment friendly. Companies functioning in this industry have to make sure that they conduct a thorough analysis of the cultural environment of country. Main reason behind it being the fact that India is a multi-cultural country and organizations have to make sure that they produce such clothes which do not hurt the sentiments of locals (Dommaraju, 2008). If such facets are not considered, then there are very less chances that companies in this industry may be able to function efficiently and effectively in the market.

Technological factors

India is a developing country and technological factors and forces are some key aspects that are helping the nation to grow at a very healthy pace. For the textile industry, advanced tools and equipments have a very critical role to play in the process of manufacturing effective fabrics. There are nearly 200 shipping ports and 12 international airports in India (Moyili, 2009). This way it can be said that transporting textiles and fabrics by means of import and export has become a lot easier for organizations operating in the Indian Textile Industry. Furthermore, presence of this many shipping ports and international airports in the country makes it a lot easier for firms in the industry to communicate with the world and sell their products to them. Many times, it has been observed that operations and functions of textile industry creates a lot of pollution and proves to be damaging for the natural environment. Considering this, many of the market players and industry regulatory bodies have laid down rules that help in reducing their harmful activities for natural environment (Joshi and et. al, 2009). For the same, various environment friendly approaches are used by these companies (Kalia and et. al, 2013).

Though India is a fast developing nation, it still does not have high speed internet connections because of which operations of many industries in the country are affected significantly in terms of technology related functions. According to different studies, average speed of internet in the country is 2.0 Mbps which is lowest in the Asia-Pacific region (Pai, 2015).  Two cities Ahmedabad and Mumbai are very famous as a textile city in India, as they have abundance of resources and efforts to carry out production of textiles and also supplying them to various parts of the country (Leighton, 2009). India  is a country where there is abundance of unskilled and semi-skilled workers, meaning that there are very less chances that they can use different tools and machineries to effectively produce textile. In this sense it may not be wrong to say that the workers would be required to undergo thorough training and development sessions, to learn how different machineries can be used effectively. It would cost a huge sum of money to companies that start to operate in the industry, but the effect that it would have on firm's performance would be substantial and also help to prolong their existence in the market by great margin.

Political factors

India is a democratic nation and the political environment prevalent in the country is not a very stable one due to which sometimes, it becomes very difficult for companies in textile industry to operate efficiently and effectively (Rieple and Singh, 2010). There are many rules and regulations that companies operating in the textile industry have to follow and comply with. If such companies are not able to comply with these regulations, then there are very fewer chances for their survival and sustainability in the market. One of the major regulations prevailing in the country that affects this industry is that the government does not allow foreign direct investment in this sector. It is because of this very reason, foreign and multinational companies are not able to enter the industry and this helps India to grow and develop at a rapid pace (Allwood and et.al., 2008). Further, different aspects of tax policies used by government to regulate working of the industry also have changed by great margins, due to which it becomes very difficult for companies to successfully operate in the sector and achieve their aim and objectives. The government of India has made it a very strict regulation that the companies in this industry have to provide regular training and development sessions to the employees. For such organizations, it is imperative that they provide regular training to the workforce with a view to improve and enhance their performance at the workplace and also enable them to contribute in significant manner to organizational goals and objectives (Dixit and Katare, 2007). To provide regular training to employees, it is imperative for authorities that they expend good amount of money on such activities and maintain a specific budget for it.

Similarly, there are some political areas of risk that companies have to face and also overcome. One of them is that of the high level of political instability. Political environment in India is highly unstable due to which there is a constant threat of updation and changes in rules and regulations that govern working of the industry and also its market players (Konduru, Yamazaki and Paggi, 2012). Election tenure, i.e. the gap between one election to another is of 5 years which is fairly small period for a nation such as India. Due to this very reason, companies in the industry have to face the risk of changes in regulations and policies governing working of this sector of economy on a regular basis.

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Economic factors

One of the major factors that affect and influence working of an industry is that of the economic factors. For purpose of working in an efficient and effective manner, it is imperative for companies that they analyse and thoroughly evaluate economic condition of the country. India, though is worlds' one of the largest countries, but it still is in the phase of development indicating that the economic environment is not very conducive to companies and industries in different sectors. Present monetary and financial condition of the country is not very good as the inflation rate is very high, nearly 5.11% in February 2015 (Telke and et.al., 2010). This is an indication of the fact that prices of different products and services are very high, the effects of which have to be borne by the locals which eventually affects their lifestyle and living. Because of this reason, it becomes very hard for companies in this market to operate successfully and cater to needs and demands of customers with great ease and efficiency. Since inflation rate is very high in the country, textile companies cannot provide low cost products and fabrics to the customers. This is because of reason that such firms get raw materials, tools, machineries, etc. at very high rates, the cost of which is ultimately transferred to customers (Anitha, Ramachandaran and Rajendran, 2011).

Similarly, interest rate is also on the higher side in India. This means that it is not easy for firms to take loans from banks as they have to pay substantial interests which may eventually prove to be very bad for companies in the industry and also the way they operate to achieve their goals and objectives. High interest rates have significant impact over operations of companies operating in the textile industry (Jadhav and et.al., 2013). This facet makes it very hard for the organizations to take loans, meaning that they either have to arrange for necessary finances from retained earnings or reduce their profits. Since, India is a developing country, people or the citizens do not have high purchasing power and majority of individuals either fall in the middle class category or live below the poverty line. Since the citizens do not have high purchasing power, their demand for textile products is also very low. On the other hand, many authors and industry academicians have said that there is an income disparity in the country. It can be supported through fact that there are some sections of the society which belong to high income group; while there are some which belong to low income class and are below the poverty line (Sarwa and Verma, 2013).


During the present research investigation, it was observed that Indian textile industry is affected by a large variety of factors and forces. One of them is various political factors. Herein, it was observed that Indian government has developed many rules and regulations which companies in this industry have to follow and comply with. Further, there are some policies for training and development of the employees as well as workers. Economic condition of the country is also not very good as inflation rate is very high along with bank interest rates which makes it very hard for companies to operate successfully.


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