Problems and Prospects of Large-Scale Industries: Cotton, Textile

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Growth and Development

Historical Significance:

  • Monopoly and Decline: India held a monopoly in cotton textile manufacturing for about 3,000 years until the 1500s CE. Products like muslins from Dhaka, chintzes from Masulipatnam, and calicos from Calicut were renowned globally for their quality and design. However, this dominance declined with the rise of Britain's modern mill industry during the Industrial Revolution, which produced cheaper and superior textiles.
  • Early Mills: The first modern cotton textile mill in India was established in 1818 near Kolkata but failed to sustain operations. The successful establishment of the Bombay (Mumbai) Cotton Mills by C.N. Dewar in 1854 marked the beginning of industrialized cotton production in India. Other significant mills included the Shahpur Mill in 1861 and the Calico Mill in 1863 in Ahmedabad.
  • Expansion: The industry saw significant expansion in the 1870s, particularly in Mumbai, where by 1875-76, over 60% of India's mills were located. This growth continued through the First World War, with the number of mills reaching 271 by 1914, providing employment to about 260,000 people.
  • Impact of World Wars: Demand for textiles during both World Wars further propelled the industry's growth. By 1945, India had 417 mills producing significantly higher quantities of cloth.
  • Partition Effects: The partition of India in 1947 led to the loss of major cotton-growing areas to Pakistan, creating a shortage of raw cotton. India had to resort to large-scale imports to meet its cotton requirements, impacting foreign exchange reserves.

Present Position

Industry Overview:

  • Size and Scope: Today, the cotton textile industry is the largest organized modern industry in India, employing over 20% of the industrial labor force. It constitutes approximately 16% of the industrial capital in the country.
  • Mill Distribution: There are 1,719 textile mills in India, with a significant presence in Maharashtra and Gujarat. These mills are divided into public, cooperative, and private sectors, with a majority being spinning mills and the rest composite mills.
  • Decentralized Sector: Apart from the organized sector, there are thousands of small-scale units operating as decentralized cottage industries, primarily based on traditional handloom technologies.

Problems

Challenges Faced:

  • Raw Cotton Scarcity: Despite efforts to increase domestic production, India continues to face a shortage of raw cotton, especially long staple varieties. This necessitates substantial imports, impacting foreign exchange reserves.
  • Obsolete Machinery: A large portion of machinery in Indian textile mills is outdated, with about 60-75% of machinery being 25-30 years old. This results in lower productivity and inferior quality compared to global standards.
  • Erratic Power Supply: Cotton mills often experience erratic and inadequate power supply, which hampers production efficiency and increases operational costs.
  • Low Labor Productivity: Labor productivity in Indian mills is significantly lower compared to global standards. Factors contributing to this include outdated machinery, inadequate skill development, and poor working conditions.
  • Labor Strikes: Frequent labor strikes disrupt production schedules and affect overall industry stability and investor confidence.
  • Competition: The industry faces stiff competition from the domestic powerloom and handloom sectors, as well as from synthetic fibers and textiles imported from other countries.
  • Sick Mills: A considerable number of mills are financially distressed or non-operational, classified as "sick mills." The National Textile Corporation, established in 1975, has taken over administration of many such mills in an effort to revive them.

Exports

  • Export Profile: India is a major exporter of cotton textiles, including yarn, cloth, and readymade garments. Indian garments are known globally for their quality, design, and competitive pricing.
  • Global Market: Despite challenges, Indian textiles enjoy a strong demand in international markets, contributing significantly to the country's export earnings and economic growth.

In conclusion, while the Indian cotton textile industry has a rich historical legacy and remains a critical sector in the economy, it faces numerous challenges that require modernization, technological upgrade, and supportive policies to sustain growth, enhance competitiveness, and meet global demand effectively.