The
Indian textile industry has a tradition of over 5000 years. In the World Trade
Organization (WTO) regime, the textile industry of India is expected to be propelled
as a major force next only to that of China. The Vision Statement prepared by
the Indian Cotton Mills' Federation has projected that the industry has the potential
to reach a size of $85 bn by 2010. India's share in the global textile and clothing
trade is expected to reach 6 percent in 2010 (from 3 percent in 2002) (Venkataswamy,
2005). There is, thus, immense potential for the Indian textile industry. The
Union Finance Minister while presenting budget of 2006 announced a major reduction
in excise duty on man-made fiber and filament from 16 percent to 8 percent to
boost domestic competitiveness of the textile industry (Chakraborty, 2006). The
apparel retailers may, therefore, rejoice with the lowering of excise burdens.
To reap profit in the textile value chain, branding is necessary. An analysis
of retailing or the distribution aspect of apparel is concerned, from 2001 onwards,
organized retailing has accelerated drastically. While through 1990s organized
retail in India added just 1 million sq. ft. of space a year, in 2003 alone 10
million sq. ft. was added by the industry. Retail consultancy, KSA Technopark,
estimated that around 200 malls are likely to come up in 2005 and 2006. Over the
next two years organized retailing will grow from 2 percent to 5-6 percent of
the total retail pie.
At present, top six cosmopolitan Indian cities account for
66 percent of total organized retailing (Chakraborty, 2006). At present, clothing
and textiles has 36 percent of organized retailing. The retail sales of clothing
and accessories was Rs. 1000 bn in 2001 and sooner or later global retailers will
enter India (Retail, Businessworld Marketing Whitebook, 2005, pp. 237-239).
The domestic clothing, textiles and fashion accessories market is estimated to
be Rs. 80,000 cr and about 13.6 percent of this retail market is organized (India
Retail Report, 2005, p. 38). As far as consumer spend is concerned, clothing
and footwear accounted for 14.2 percent of the total consumer spend in 2001-02,
17.1 percent in 2002-03, 21 percent in 2003-04 and 24.2 percent in 2004-05 (Vaish
and Kohli-Khandekar, 2006). Hence, it is obvious that there has been a steady
increase in consumer spend on clothing and footwear over the past few years. |