Export Potential of Traditional Textile Institutions

With more than 70% of the Indian population still residing in rural India, strengthening of the rural economy holds the key for an all-encompassing economic development of the country. In the wake of limited growth in agriculture, the rise of the Rural Non Farm Sector (RNFS) is imperative to achieve this goal. Khadi sector is traditionally known for employment generation and self-reliance within rural India in creating incomes and employment for rural workers. In the post independence era, the khadi sector has made considerable strides through efforts of Khadi and Village Industries Commission. In order to fully realize the significant growth potential of khadi sector in terms of employment generation and enhanced earnings and also, to ensure that the positioning is in consonance with current market needs, holistic form measures are required. Opening of the Indian economy to world markets also created new opportunities for the khadi sector in enhancing its exports in the booming textile export growth of India in the post-multi-fibre agreement regime. Keeping the potential growth opportunities for export of khadi sector in the postliberalisation of textile sector, this study is carried out with the aim of selecting 200 khadi institutions for the purpose of promoting them as export-oriented units over a period of next five years. The study collected both primary and secondary data from different stakeholders of khadi sector. We have undertaken field survey to collect information from about 400 khadi institutions, which are categorized as A, and A etc. The study also covered all the khadi institutions whose annual turn over is more than 30 lakhs. We have also done extensive interactions with various stakeholders and field-visits to receive opinion of different stakeholders. 200 khadi institutions have been selected based on their product portfolio keeping in view with the trends in overall demand for textile and handloom sector at four digit harmonized system (HS) code and also capability of the khadi institutions to meet the demand. For this, we have selected khadi institutions with annual turn over of more than Rs.30 lakhs, the annual average turnover of selected 200 khadi institutions is Rs.139 lakhs. Within the overall objective of promoting khadi institutions as export-oriented units, the study recommends the following policy options in the coming years under the following heads. (i) Repositioning of selected Khadi institutions as export oriented units, (ii) Policy measures to increase competitiveness of selected khadi institutions (iii) Suggest handholding support to khadi institutions for increasing their exports