Ludhiana possesses many strengths and opportunities in the textile sector in both organic as well as non organic segment. Organic cotton is an emerging trend but a long term strategy for business enterprises and there is a great need to study the potential for both organic and non-organic cotton garments in international market. So the attempt has been made to study the direction, composition and factors influencing the export of organic and conventional garments from India and to analyze the competitive position of organic and non organic garment exports in International Market. It is analyzed that non organic cotton garment exports are more than organic cotton garments but there is an increasing trend for organic cotton garment exports as they are more eco friendly and people preference for organic cotton garments is increasing now a days in foreign countries.
Key Words: Conventional, Eco-Friendly, Garment, Organic Cotton and Textile.
1.1. INDIAN TEXTILE INDUSTRY
Indian garment industry is very diverse in size, mechanized facility, type of clothes produced, quantity and quality of output, cost, requirement for fabric etc. It comprises suppliers of ready-made garments for both, domestic or export markets. India has rich resources of raw materials of textile industry. It is one of the largest producers of cotton in the world and is also rich in resources of fibres like polyester, silk, viscose etc. India is rich in highly trained manpower. The country has a huge advantage due to lower wage rates. Because of low labor rates the manufacturing cost in textile automatically comes down to very reasonable rates.
Indian textile industry is highly fragmented in industry structure, and is led by small scale companies. The reservation of production for very small companies that was imposed with the intention to help out small scale companies across the country. This sector is largest in the terms of employment & generates employment to more than 35 million people. India has the potential to increase its textile & apparel share in the world trade from the current level of 4.5% to 8% & reach USD 80 billion by 2020.
Textile industry constitutes Readymade Garments, Cotton Textiles including Handlooms, Man-made Textiles, Silk Textiles, Woollen Textiles, Handicrafts including Carpets, Coir & Jute. The main markets for Indian textiles and apparels are USA, UAE, UK, Germany, France, Italy, Russia, Canada, Bangladesh and Japan and some major players in Indian Textile Industry are Arvind Mills, Raymonds, Reliance Textiles, Vardhman Spinning, Welspun India, Century Textiles, Morarjee Mills, Indo Rama, GTN Textiles, Ginni Filaments Ltd., LNJ Bhilwara Group, Mafatlal Textiles and Modern Group.
1.2. ORGANIC & NON-ORGANIC COTTON
Organic cotton is cotton that originates from organic agriculture. organic agriculture aims for an optimum and sustainable use of local natural resources for production without the application of external inputs like synthetic pesticides, chemical fertilizers etc.
The Organic Trade Association (OTA) lists 10 good reasons to go organic. For one, organic products reduce health risks because they are grown without pesticides, antibiotics, hormones and fertilizers that are harmful to the human health. By choosing organic products, you are not only protecting your health but also safeguarding the environment.
Unlike conventional cotton that accounts for about 25% of the global insecticides market by value and about 10% of the pesticides market, organic cotton is grown and processed without toxic pesticides, herbicides and synthetic fertilizers. It is safe for your skin; it is the healthiest choice for you, your loved ones and certainly for the environment.
Worldwide, conventional cotton farming
• Uses 2.03 billion pounds of synthetic fertilizers (formaldehyde, Sodium Lauryl Sulphate, parabens, chemical dyes etc) per year
• Uses 25% of the world’s insecticides
• Uses only about 3% of the farmland but consumes approximately 25 percent of the chemical pesticides and fertilizers (84 million pounds of chemical pesticides per year)
Organic cotton saves lives
• No pesticides, hazardous chemicals (believed to cause up to a million cases of poisoning a year and 20,000 deaths)
• No formaldehyde (used as a finish): According to a National Cancer Institute (NCI)study, there is a link between formaldehyde exposure and cancer of the nasopharynx (the uppermost part of the throat)
• No nickel which can cause skin rashes.
Four principal labels for cotton fibre products are:
• 100% Organic Cotton. This must contain 100% organically produced cotton.
• Organic Cotton. This must contain 95% organically produced cotton.
• Made With Organic Cotton. This must contain at least 70% organically produced cotton.
• Made With __% Organic Cotton. This must contain the percentage of cotton advertised.
Global Organic Standards
International Working Group’s Global Organic Textile Standard (GOTS) comprises of Organic Trade Association (OTA), The Soil Association (UK), International Association Natural Textile Industry (IVN) (Germany), and the Japan Organic Cotton Association and companies, manufacturers, and producers wishing to be licensed must comply with all required criteria for their products to be labelled “Global Organic Textile Standard” & “Organic Exchange”
2. REVIEW OF LITERATURE
Stylios (1996) in his study “The principles of intelligent textile and garment manufacturing systems” concluded that in order to develop the industry, nature of interaction between machinery, fabric and operatives has to be taken into account, and this poses some real problems if one has to put forward realistic solutions for future industrial development. It is therefore important to be able to take into consideration fabric/machine/human interactions during the manufacturing process in order to propose the next generation of manufacturing systems which is much needed in the current apparel industry. Reports on findings in the area of intelligent garment manufacture which is a means of introducing flexibility, quality, production efficiency and maximization of resources to the apparel industry.
Kathuria & Bharadwaj (1998) in their study “Export Quotas and Policy Constraints in the Indian Textile and Garment Industries” have remarked that substantial export tax equivalents exist for Indian textile and clothing exports. In today’s world, these would have been even higher if domestic Indian policy constraints had been relaxed. In tomorrow’s world, the health of India’s textile and clothing industries may depend on timely relaxation of these constraints. Dismantling the quota regime represents both an opportunity (for developing countries to expand exports) and a threat (because quotas will no longer guarantee markets and even the domestic market will be open to competition).They provide comprehensive estimates of the magnitude of the implicit export taxes resulting from the labyrinth of quotas imposed under the WTO Agreement on Textiles and Clothing.
Acajou (2003) in his study “Management trends in textiles and clothing” has analyzed the global trade and production of textiles and clothing and the organizational trends occurring in enterprises in order to enable them to face increased competition due to trade liberalization and the communications revolution. It introduces the concept of ‘quick response’ and characterizes the problems it aims to overcome.
Curran (2007) in his study titled,” Clothing’s big bang: the impact of the end of ATC on developing countries clothing suppliers” has analyzed significant changes occurred in sourcing patterns in the EU almost overnight. The big winners were India and China. Almost all other developing countries lost market share, although often not as much as had been feared. The impact of the liberalization was mitigated somewhat by the new quantitative restrictions negotiated with China half way through the year, which resulted in a redistribution of market share to other developing countries. Comparisons with the USA indicate that trends are rather similar, although on that market more developing countries saw increases in their exports, partly cancelling out losses in the EU.
Abrar, Tian, Deng (2009) in his study titled, “Exploration of Niche Market and Innovation in Organic Textile by a Developing Country” have concluded that organic textile is a niche market having size, higher profit margins and growth potential along with the improvement of ecosystem and social well being. The other niche market opportunities are nano textile, medical textile, and industrial textile which are capital intensive. Organic textile is a new idea and product with substantial opportunities, and should be explored empirically with innovation and niche market point of view.
Chattopadhyay (2009) in his study, “Indian Apparel Fabric Market Needs High Quality Innovation” has revealed that there are many instances of product developments regularly practiced by the Unorganized Sector of the Indian textile Industry. It is the low cost, simplicity and speed. The purpose of this article is to highlight the in-born strength of India. The Indians, by nature are more creative than productive. In terms of textile productivity, China is far ahead of India. But in terms of innovation and designing that require emotional quotient, India rules.
Green Industrial Evolution India (2010) in its study titled, “Industries Going Green” has remarked that Indian Economy is climate sensitive as many industries are dependent on resources which have become vulnerable due to changing climate. Corporations across all industries will continue to be subject to, increasingly stringent environmental regulations as well as sustained pressure from customers, employees and investors to deliver on a triple bottom line of economic, environmental and social performance.
Organic Exchange’s (OE) (2010) predicts from their report on “Organic Cotton Market Report 2009” that the integration of sustainability and business strategies on the part of several industries continues to grow at a rapid pace. OE believes four key factors will influence the organic cotton market over the next two to three years: commitment from brands and retailers, continued consumer support for “all things green,” industry integrity, and the economic climate. These factors have certainly influenced the 2009 organic cotton market.
3. OBJECTIVES OF THE STUDY
• To analyze the direction and composition of organic & non organic garments exports from India.
• To highlight the factors influencing the export of organic and non organic garment exports from India.
• To study the competitive position of organic and non organic garment exports in International Market.
4. RESEARCH METHODOLOGY
The research design of the project is descriptive as it describes data and viewpoints of garment manufacturers & exporters in Ludhiana. The present study incorporates the collection of both primary and secondary data for an in depth investigation. The statistical tools used for analysis are ranking, likert scale, checklist questions and multiple choice questions. Since the study is restricted to Ludhiana the universe for the study consists of all the exporters of organic and non organic cotton garments in Ludhiana. The sampling unit for this research is a single individual or firm in Ludhiana who exports organic and non organic cotton garments. The selection of the respondents was done on the basis of convenience sampling technique and snowball technique based on the non probability method of sampling. The number of respondents included in the study was 100 for convenience in evaluating and analyzing the data and because of time constraint.
5. DATA ANALYSIS AND INTERPRERATION
5.1. No. of Manufactures and Traders of Garments
Fig-5.1 No of manufactures and traders
Interpretation: From the above data it is observed that there are maximum no. of manufacturers & exporters of both organic & non organic cotton garments.
5.2. Types of Cotton Garment Export
Table-5.2 Types of cotton garments exported
Organic Non organic
Knitted Woven Knitted Woven
No of responses 32 36 72 88
Total no of responses 68 68 160 160
Percentage 47.06%% 52.94% 45% 55%
Percentage of people exporting organic & non organic garments 40% 100%
Interpretation: It can be interpreted that majority of the respondents manufactures & exports non organic cotton garments & 40% manufactures & exports organic cotton garments.
5.3. (a). Type of Organic Cotton Garment Exported
Fig-5.3(a) Type of organic cotton garment exported
Interpretation: From the above graph it can be analyzed that maximum no. of organic cotton women dresses are exported than other garments but kids wear are also exported in maximum proportion & jeans are very less exported.
5.3. (b). Type of non organic cotton garment exported
Fig-5.3(b) Type of non organic cotton garment exported
Interpretation: It can be interpreted from the above diagram that maximum no. of shirts of non organic garments is exported than other garments.
5.4. (a) Export countries of organic cotton garments
Fig-5.4(a) Export countries of organic cotton garments
Interpretation: From the above data it can be interpreted that maximum no of exports of organic cotton garments are in U.S.A & Europe. This shows there is more demand for organic cotton garments in both the markets.
5.4. (b) Export countries of non organic cotton garments
Fig-5.4(b) Export countries of non organic cotton garments
Interpretation: From the above data it can be interpreted that maximum no. of non organic cotton garment exports are in U.S. & Europe. This shows that both organic & non organic cotton garments have the largest markets in U.S. & Europe.
5.5. (a) Countries giving competition to organic cotton garment exports
Fig-5.5(a) Countries giving competition to organic cotton garment exports
Interpretation: From the above data it can be interpreted that manufacturers & exporters of organic cotton garments are facing more competition with Syria & Turkey, which are manufacturing & exporting organic cotton garments to other nations.
5.5. (b) Countries giving competition to non organic cotton garment exports
Fig-5.5(b) Countries giving competition to non organic cotton garment exports
Interpretation: From the above data it can be interpreted that manufacturers & exporters of non organic cotton garments are facing tough competition from china as china is exporting more no of non organic cotton garments in other nations.
5.6. (a) Ranks of factors influencing the export of organic cotton garments
Table: 5.6(a)-Ranks of factors influencing the export of organic cotton garments
Factors Mean score Ranks
Profit margin 1.8 1
Necessity for survival 4 5
Price competitiveness 2.9 3
Demand in overseas market 2.6 2
Increasing basket size 3.7 4
Fig-5.6(a) Ranks of factors influencing the export of organic cotton garments
Interpretation: From the above data it can be interpreted that the most important which influence the manufacturers & traders in exporting organic cotton garments is high profit margin & secondly there is increasing demand of organic cotton garments in the overseas market.
5.6. (b) Ranks of factors influencing the export of non organic cotton garments
Table-5.6(b) Ranks of factors influencing the export of non organic cotton garments
Factors Mean score Ranks
Profit margin 2.8 2
Necessity for survival 3.44 4
Price competitiveness 1.6 1
Demand in overseas market 3 3
Increasing basket size 4.16 5
Fig-5.6(b) Ranks of factors influencing the export of non organic cotton garments
Interpretation: From the above data it can be interpreted that profit margin & demand in overseas market are more influencing the people to manufacture & export non organic cotton garments.
5.7. (a) Trend of organic cotton garments exports started manufacture
Fig-5.7(a) Trend of organic cotton garments exports started manufacture
Interpretation: From the above data it can be interpreted that there is increasing trend of exports of organic cotton garments exports.
5.7. (b) Trend of non organic cotton garments exports started manufacture
Fig-5.7(b) Trend of non organic cotton garments exports started manufacture
Interpretation: From the above data it can be interpreted that there is increasing trend of non organic cotton garment exports.
5.8. Proportion of export of organic cotton garments out of out of total exports
Table 5.8- Proportion of export of organic cotton garments out of out of total exports
Proportion of exports No of responses Percentage
0% 60 60%
1-25% 36 36%
25-50% 0 0%
50-75% 4 4%
75-100% 0 0%
100% 0 0%
Total 100 100%
Interpretation: From the above data it can be interpreted that majority of the manufacturers & exporters exports only non organic cotton garments but 32% of the respondents said that they export 1-25% of organic cotton garments out of their total exports & 4% manufacturers & exporters export 50-75% of organic cotton garments out of their total exports.
5.9. Combined result of all the factors responsible for difference in the export of both Organic and Non-Organic Cotton Garment Exports
Table 5.9- Combined result of all the factors responsible for difference in the export of both Organic and Non-Organic Cotton Garment Exports
Factors Mean Rank
Quality of garments produced from organic cotton is substantially better than non organic 0.88 2
People of foreign countries are using more organic garments than non organic one 0.56 4
Export of organic garments is more than non organic garment 0.08 6
Organic cotton garments are more eco friendly than non organic 1 1
Lengthy procedure in certification of organic cotton garments 0.76 3
Production technology of organic cotton garments is complex than non organic cotton garments 0.24 5
Interpretation: From the above data it can be interpreted that organic cotton garments are more eco friendly as pr manufacturers & traders point of view & its quality is much better than non organic cotton garments but it takes much time to get the certification of organic cotton garments manufacturing & exporting. So people prefer to manufacture & exports non organic cotton garments as they have huge market in foreign.
Trend for both organic and non organic is increasing in global market but still there is huge potential for organic cotton garments in foreign market because there are many markets which are still untapped. Most favourable export country for organic and non organic cotton garments is USA & Europe. People agree to the fact that organic cotton garments are much better than non organic in terms of eco friendliness, quality and profit margin due to which demand for organic cotton textile products is increasing in the global textile market. Organic cotton garments involve highly complex technology and certification procedure, which ensures betterment of technology as well as quality. Since there are fewer competitors in the organic cotton segment, therefore Ludhiana textile industry can have an edge over the others in organic cotton garments business.
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