VARDHMAN SPINNING AND GENERAL MILLS LIMITED
ANNUAL REPORT 2003-2004
It is heartening to note that india has been ranked 34th in the global
competitiveness among 60 nations as per Global Competitiveness Year book
2004. The report states that India has improved its rank from 50th last
year to its present position. This is India's best ranking ever. The report
further observed that India has overtaken Greece, Czech Republic, South
Africa etc., in competativeness in the the last one year year. While
businesses in the country are striving to improve their competitiveness,
the report signifies much improved perception of Indian business in the
global business communities.
In the context of global textile industry, China has emerged as a dominant
player in recent year. The Chinese textile industry is estimated to be
worth $128 billion, with estimated exports of $80 billion, a share of over
20 percent in the world trade. As per the World Trade Organisation
statistics, China has cornered the lion's Share in the total increase in
world trade in textile and clothing during the year 2002. China captured 76
per cent of the total $11 billion increase in the trade. The scale of
production and cost competitiveness of the Chinese textile and clothing
industry are the major driving forces in this magnificent performance.
Therefore, any country sekking a higher share in the world trade in textile
and clothing has to contend with fiercely competitive producers like China.
The inherent strengths of the Indian textile industry like availability of
wide variety of raw materials, cost effective manpower and diversified
manufacturing base have been acknowledged by various experts. The high
growth potential of the textile industry has been identified by various
studies carried out by the Government agencies as well as by the
international consultancy organisations. However, most of these studies
have also pointed out the poor competitiveness of the Indian textile
industry. The incompetitive in terms of scale of production, technology
employeed, productivity, quality parameters and supply chain management.
Much of this is on account of fargemented production structure and rigid
labour laws. As a consequence, India has not been able to take benefit of
the global relocation of the textile business.
I still see a silver lining on the horizon. If we can increase the
competitiveness of or fabric and clothing segments, the Indian textile
industry can still play a major role in the global textile and clothing
business. Our in-house studies indicate that with appropriate policies and
entrepreneurial initiatives, the Indian textile exports can increase from
the present $13 billion to $ 25 billion in the next six years. In this,
the clothing segment has to make a quantum leap to achieve $ 15 billion
2010 from the present level of $5.5 billion. The textile exports can also
double in this period. IT is a daunting task, but nevertheless necessary to
ensure sustainability of the textile industry in India. And competitiveness
is the key driving force for resurgence of Indian textiles.
With best wishes,
(SHRI PAUL OSWAL)
Chairman and Managing Director