Main Project

2010

Summer Training Report

On

EXPORT AND DOCUMENTATION

&

INDIAN TEXTILE

Submitted in Partial Fulfillment for the Award of the Diploma of

Post Graduate Diploma in Management

(Session 2009-11)

Submitted to: Examination controller Submitted By: SUMIT Kr. GUPTA

Student Name: SUMIT Kr. GUPTA

Internal Guide: ASHISH JHA Roll No: PGD09151

PGDM : I yr

DEPARTMENT OF MANAGEMENT

INSTITUTE OF MANAGEMENT STUDIES, NOIDA

A UGC Recognized Institute

A-8B, Plot –C, Sector-62, Noida

INSTITUTE OF MANAGEMENT STUDIES

2010

Certificate from the Company

The project report titled “EXPORT AND DOCUMENTAION & INDIAN TEXTILE.” submitted by Mr. /Ms. SUMIT KUMAR GUPTA, (Roll No-

PGD09051)

Signature

(ASHUTOSH MALL)

(Name of Guide)

Date- / /2010


2010

Certificate from Internal Guide

The project report titled “EXPORT AND DOCUMENTAION & INDIAN TEXTILE.” submitted by Mr. /Ms. SUMIT KUMAR GUPTA, (Roll No-

PGD09051)

Signature Signature

(ASHISH JHA) (ITILEKHA DAS)

(Name of Co-Guide) (Name of Guide)

Date: - / /2010


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TABLE OF CONTENTS PAGE NO

1. OBJECTIVE OF THE STUDY 10

2. RESEARCH METHODOLOGY 11

3. RESEARCH DESIGNE 12

4. BACK GROUND OF THE STUDY 12

5. NEED OF THE STUDY 13

6. SCOPE OF THE STUDY 13

7. CHAPTER-1 DCM LTD 14

1.1 History 15

1.2 Company profile 15

1.3 History of DCM Shriram Industries Ltd. 18

1.4 Corporate Ethos 23

1.5 Quality System 24

1.6 Product Of DCM Shriram Industries Ltd 24

1.7 Environment, Health & Safety 24

1.8 Social Commitment 25

1.9 Rural Development 26

1.10 Product Range 26

1.11 Past Performance 28

1.12 Recent Development 30

8. CHAPTER -2 INTERNATIONAL BUSINESSES 31

2.1International Transaction 31


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2.2 EXIM Flow 32

2.3Export Procedure 33

2.4Export Documentation 36

2.5 Export Invoice 37

9. CHAPTER-3 EXPORT BUSINESS 40

3.1To start an Export Business 41

3.1 (a) Proprietorship\Sole trade ship41

(b)Partnership Firm 41

(c)Joint Hindu Family Firm 42

(d)Trust 42

(e)Co-operative Society 42

(f)Private Company 42

(g)Public Company43

(h)Letter Head 43

(i)Rubber Stamp 43

(j)Bank Account 43

(k)Permanent A/c No 44

(l)Importer Exporter Code No 44

(m)Business Identification No 44

(n)SSI Registration 45

(o)Sales Tax Registration 45

(p)Central Excise 45

(q)Registration with Export Promotion Councils 45

(r)Clearing & Forwarding Agent 46

(s)Sequential Steps towards Export Operations 46


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10. CHAPTER -4 EXPORTS AND DOCUMENTAION 52

4.1Export Documentation 52

4.2ADS 52

4.3Standardized and Aligned Pre-shipment Export Document 53

4.4Regulatory Documents 55

4.5Document Connected with Transportation of Good 55

4.6Commercial Document 57

4.7Insurance Document 58

4.8Financial Document 59

4.9Third Party Document 62

11. CHAPTER-5 INDIAN TEXTILE 65

5.1Introduction 66

5.2History 66

5.3Literature Review 67

5.4Overview of Indian Textile Industries 67

5.5Total Production of Yarn in India 70

5.6Indian Textile Export 71

5.7Major Textile Export Promotion Council of India 72

5.8Indian Textile Policy 74

5.9Swat Analysis of Indian Textile 76

12. CHAPTER-6 DATA ANALYSIS 79

6.1 (a) Duration of Purchasing Habits of People 80

6.1(b) Buying Habits of People 81

6.1 (c) Buying Destination of Customer 82

6.1 (d) Purchasing limits of Customer 83

6.1 (e) Purpose of Purchasing of Readymade Garments 84

6.1 (f) Reference for Purchase 85


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6.1 (g) Companies with most Festival Offer 86

6.1 (h) Market share of the Major Textile Companies 87

6.1 (i) Rate Provided by the People 88

6.2FINDING, SUGGESTION&CONCLUSION 89

6.3BIBLIOGRAPHY 91

13. QUESTIONNAIRE 92

LIST OF TABLE

1. Organizational Chart 16

2. Product & Units 23

3. Product & Quality 25

4. International Transaction 31

5. EXIM FLOW Chart 32

6. Export Procedures 33

7. Export Documentation 36

8. Export Procedures Flow Chart 39


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LIST OF GRAPH

1. Durations of Purchasing Habits of People 80

2. Buying Habits of People 81

3. Buying Destination of Customer 82

4. Purchasing limits of Customer 83

5. Purpose of Purchasing of Readymade Garments 84

6. References for Purchase 85

7. Companies with most Festival Offer 86

8. Market shares of the Major Textile Companies 87

9. Rate Provided by the People 88


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OBJECTIVE OF THE STUDY

The main objectives of the research were:

To know about export import process.

To know what are the documents required before and after sailing the cargo.

To know about international business and trade.

To determine the exact position of Indian Textile Industry.

To know about the areas where it is lacing.

To know the opportunities of the industry in future.

To know the effect of the current competitive environment on the Indian Textile Industry.

To determining the demand of Indian textile products in international market.


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RESEARCH METHODOLOGY

The different primary and secondary data’s has been used in the research project report. For the aspects, the secondary data analysis has been takes into

consideration, but maximum areas and parts of the project has been covered by primary data’s.

SAMPLE DESIGN

1. SAMPLE UNIT: - All working people are included both the genders i.e. males and females irrespective of their education level.

2. SAMPLE SIZE: - 200

3. SAMPLE REGION: - Noida –18 Region, Central Delhi.

DATA COLLECTION METHOD

1. PRIMARY DATA: - Primary data was collected through a self administrated questionnaire. This questionnaire aims to gather information related to various readymade garments.

2. SECONDARY DATA: - Secondary data was collected through magazines, research papers, internet etc.

RESEARCH INTRUMENTS

QUESTIONNAIRE DESIG: - As the questionnaire is self administrated one, the survey is kept simple and user friendly. Words used in questionnaire are readily understandable to all respondent. Also technical jargons are avoided to ensure that there is no confusion for respondents.


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RESEARCH DESIGN

Research design is the based framework, which provides guidelines for the research

process. It is a map or blue print according to which the research is to be

conducts. The research design specifies the methods for data collection & data

analysis determine the source of data. Most specifically it was a kind of

“Descriptive conclusive research” who takes care of who, when, where,

what, how and why aspects of the investigation further the researcher used the

statistical method to serve the purpose of project, it permitted the research to

derive more accurate generalization whose reliability could be measured.

CENTRE : ALL OVER INDIA

RESEARCH : EXPLORATORY

RESEARCH TECHNIQUE : QUALITATIVE & QUANNTATIVE

TOOL USED : TELEPHONIC & E-MAIL

DATA SOURCE : PRIMARY & SECONDARY

BACKGROUND OF THE STUDY

Textile is the oldest business of Indians. Mainer places in India accounting for its remarkable achievement in the field of textiles. It is a major source of the earning of the revenue generation for the country. From the last 50 years after the independence, this sector continuously is a part of the revenue generation of the countries. It is a major industry in employment generation of the country. From the last couple of years, it accounting for a leading role in the GDP of the country. It accounts for around 4 per cent of the gross domestic product (GDP), 14 per cent of industrial production and over 13 per cent of the country's total export earnings. Moreover, it provides employment to over 35 million people. The Indian textile industry is estimated to be around US$ 52 billion and is likely to reach US$ 115 billion by 2012. The domestic market is likely to increase from US$ 34.6 billion to US$ 60 billion by 2012. It is expected that India's share of exports to the world would also increase from the current 4 per cent to around 7 per cent during this


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period. India's textile exports have shot up from US$ 19.14 billion in 2006-07 to US$ 22.13 billion in 2007-08, registering a growth of over 15 per cent.

NEED OF THE STUDY

The study will provide a clear and brief view about the current situation and future prospect of the Indian Textile sector. As it is said that the Indian Textile sector is the one of the old and more profit earning sector from many years. The study will give the perfect overview and actual analysis of the relevant data’s for the clear picture of the industry. There are following need for the study of the report. -

•Increase in the international demand of the apparels and clothes.

•Entry of multinational companies in the India.

•Implementation of different promotion policies of govt.

•Providing fruitful information to the major companies of India’s textile sector.

SCOPE OF THE STUDY

The scope of marketing research in international business could cover the

business problems relating to the followings.

Types of consumers that compromise present and potential markets.

Buying habits and pattern of consumption

Size and location of different markets, not only in India but also overseas.

The prospects for growth or construction for the current markets being served.

New mantras of emerging segments.

Marketing and manufacturing capabilities of competitors.

Most suitable entry timing.

The current and prospective competitive position.

Chances of improvement of current channels.


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CHAPTER N0-1Company Profile


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1.1 Histosry - DCM Ltd

2004

- DCM Shriram Infrastructure Ltd. (DSIL) has become a subsidiary of another Subsidiary, DCM Shriram Credit and Investments Ltd. (DSCIL). Consequently DSIL has become a Subsidiary of DCM Shriram Consolidated Ltd. also. DSCIL and DSIL are closely held and unlisted companies.

-DCM Shriram Chairman elected as Deputy Chairman for CII (North)

2005

-Fenesta rolls out new range of window, door systems

1.2 COMPANY PROFILE

DCM Shriram Industries Limited (DSIL) is an India-based company. The Company has operations in sugar, alcohol, fine chemicals, rayon tyrecord, and textiles. The six manufacturing sites of the Company are Daurala Sugar Complex, Shriram Rayons, Daurala Organics Ltd., DCM Hyundai Ltd., Indital Tintoria Ltd. and DCM Remy Ltd. Daurala Sugar Complex comprises a cane sugar plant, distillery and an aromatic chemical unit. Shriram Rayons manufactures rayon tyre cord with nylon and rayon conversion facilities catering to the needs of both domestic and overseas markets. Daurala Organics is engaged in manufacturing of drug intermediates. Indital Tintoria is focused on processing 100% cotton yarn. DCM Remy is engaged in the production of liquors and DCM Hyundai is engaged in the production of shipping containers.

A series of ISO 9000 certified DCM Shriram Industries Ltd was formed in 1990 after the restructuring of DCM group by combining five units of DCM group namely Sugar factory at Daurala, Distillery at Daural, Rayon tyre cord plant at Kota, Liquor Operations at Daurala and Aromatic Chemicals Plant at Daurala. The company is essentially a manufacturer of Sugar, Alcohol, Chemicals and Rayons.

The company has five manufacturing units in India. Daurala Sugar works is located at Daurala, UP where Sugar, Refined sugar, Pharma Grade Sugar, Alcohol, Potable Liquor and Aromatic Chemicals are manufactured. Products like Industrial Rayon, Nylon and Chemicals are manufactred at Shriram Rayons, Kota, Rajasthan. Daurala Organics manufactures Drug Intermediates and Fine Chemicals. DCM Hyundai Ltd and Daurala Food and Beverages (P)


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Ltd are Shriram's promoted companies. DCM Hyundai Ltd located at Pollivakkam, Tamil Nadu manufactures Dry Cargo Marine Freight Containers, Freight Containers for Trucks and Sheet and metal fabrications and Daurala F and B (P) Ltd is manufacturer of Scotch and Blended Whickies and Liqueurs.

The company had promoted ISO 9002 certified Daurala Organics Ltd in 1994 to manufacture high technology, high value drug intermediates.

Under a Scheme of Arrangement approved by the shareholders and creditors of the Company and also by the Hon'ble Delhi High Court vide their Order dated 16-4-90 the Company (DCM Ltd) now stands divided into four companies’ w.e.f. 1-4-90 as follows:

i) DCM Limited ii) DCM Shriram Industires Ltd iii) DCM Shriram Consolidated Ltd iv) Shriram Industrial Enterprises Ltd

1.2(a) BOARD OF DIRECTORS

Tilak Dhar Chairman of the Board, Managing Director

D. C. Mittal President

N. K. Jain Chief Financial Officer

Anil Gujral Chief Executive Officer - Chemicals & Alcohol

P. V. Bakre Senior Vice President

B. P. Khandelwal Senior Executive Director, Company Secretary, Compliance Officer

Madhav B. Shriram Whole-Time Director

Alok B. Shriram Deputy Managing Director, Director

G. Kumar Director - Sugar Operations, Director

K. N. Rao Chief Operating Officer - Rayons

1.2(b) ORGANIZATION CHART


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1.3 History of DCM Shriram Industries Ltd.

Under a 'Scheme of Arrangement' approved by shareholders & creditors of Comp. & also by Honourable Delhi High Court vide their Order dated 16-4-90 the Comp. [DCM Ltd] now stands divided into four companies w.e.f. 1-4-90 as follows :

[1] DCM Limited [2] DCM Shriram Industires Ltd [3] DCM Shriram Consolidated Ltd [4] Shriram Industrial Enterprises Ltd

As per the scheme, the shareholders of DCM Ltd. will be allotted shares in DCM Shriram Industries limited & Shriram Industrial Enterprises limited in the ratio


SIR SHRIRAM (FOUNDER)

MURLI DHAR BHARAT RAM CHARAT RAM

SHRI DHAR BANSI DHAR

VINAY/VIVEK

ARUN SIDDHART/DEEPAK

Dcm shriram consolidated ltd

SBGI/bloseeds ltd

DSCL esco(100% subsidiary)

DCM shriram indust ltd

Daurala organics

DCM hyundai

DCM ltd

DCM financial services

DCM benetton

SIEL

Jay engg

Usha international

Shriram pistons

SRF

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of one share in each of above Companies for every four shares held by then in DCM Ltd. as on 21-9-1990.

Pursuant to the scheme three units namely. Daurala Sugar Works, Shriram Rayons & Hindon River Mills have been vested with the Company.

2000 - Credit rating agency has retained the MD rating, indicating default to the fixed deposit programme of company.

2001- The Board of Directors of Comp. has approved as under : 1. Hiving off of its Polymer Processing Business on a going concern basis to its 91% subsidiary DCM Shriram Exports Ltd.

- The communication issued to the BSE, DCM Shriram Industries Ltd has informed that Shri D.C.Mittal, Joint Managing Director has demitted office on December 11, 2001

- DCM Shriram Industries Ltd has informed that the Board of Directors of Comp. at its meeting held on January 14, 2008, has co-opted Shri. S B Mathur on the Board as an Additional Director. He will be an independent director.

-DCM Shriram Industries Ltd has re-appointed Shri Alok B Shriram as Dy. Managing Director for further period of 5 years w.e.f. October 01, 2008.

DCM is a part of DCM group which was incorporated in the year of 1889 and is engaged in manufacturing of engineering products and textiles. The different divisions of DCM group are engineering products, tolls and dyes, precision engineering, textiles and real estates. The company has its plants at Asron (Punjab), Hissar (Haryana) and New Delhi. DCM`s principal businesses constitute textiles, information technology and real estate.

DCM basically has three different divisions Textiles, Information Technology and Real Estate. Its Textiles division is a Spinning Mill located in Hisar (Haryana) engaged in the manufacturing of 100% grey cotton yarn and Melange yarn in the count range of 14`s to 40's, for usage in knitting fabrics and weaving of terry towels. The unit has a line of new generation machines from renowned manufacturers like M/s. schlafhorst A.G (Germany), Rieter (Germany), Crosrol (UK), Laxmi Machine Works (India) among others. The company's IT division was established in 1972 with its head office in Gurgaon and a branch in CA, USA and four branches in Delhi, Kolkata, Mumbai, Chennai and Hyderabad. Its service range includes Enterprise System Management Services, Customer Support Services, Embedded System Software for Automobiles and Embedded System Software for Wireless.

1.3 (a) Introduction of DCM Shriram Industries Ltd.

DCM Shriram Industries Ltd. (DSIL) is the flagship company of the DCMShriram Industrial Group based predominantly in Northern India with a


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portfolio of products comprising of sugar, alcohol, fine chemicals, rayontyrecord & textiles. The group has a strong emphasis on technology andquality as also a strong commitment to environmental & social concerns.

1.3 (b) Quality Policy OF DCM Shriram Industries Ltd.

DCM Shriram Group has inherited the precept of giving the customer "an extra inch" from its founder. The group has moved away from its one-time staple, textiles, but the precept remains. And it applies to product specifications and quality as much as to other aspects of business.

1.3 (c). QUALITY POLICY


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1.3 (d) About DCM Shriram Industries Ltd.

For over a hundred years, the name DCM Shriram has been synonymous with Excellence, Quality, Integrity, Environmental consciousness and pioneering spirit.

This is the legacy that DCM Shriram Industries Group - born in 1990 on restructuring of the erstwhile DCM Ltd - aspires to live up to & surpass.

As a business group that has inherited the rich legacy of sound governance, effective corporate management, technological sophistication & above all the


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goodwill & loyalty of numerous stakeholders & associates, we continue to build our business on the vision & values endowed by our founder.

DCM Shriram Industries is a diversified group with operations in Sugar, Alcohol, Organic and Inorganic Chemicals, Drug Intermediates, Rayon Tyrecord, Shipping Containers and processed cotton yarn.

The group comprises five main business operations, each with a history of consistent performance over the years.

Daurala Sugar Complex, comprising a cane sugar plant, distillery and an aromatic chemicals unit.Shriram Rayons, comprising rayon tyre cord/yarn/fabric and nylon chafer/fabric plants.Daurala Organics, manufacturing new generation drug intermediates.Daurala Foods & Beverages (P) Ltd., manufacturing high-class liquors.DCM Hyundai Ltd., manufacturing shipping containers.

As a market-driven agglomerate, responsive to customer needs, DCM Shriram Industries group remains committed to continuous modernization, expansion, diversification and innovation.

It is a commitment that has helped us maintain leadership in every area of our operations.

A tradition of excellence.

5. MILESTONE

1889- Delhi Cloth Mills founded at Delhi

1932- Sugar factory set up at Daurala

1934- Textile Mills set up at Lyallpur (Now Faisalabad in Pakistan)

1940- Sugar factory set up at Mawana

1941- Heavy inorganic chemicals plant set up at Delhi

1943- Distillery set up at Daurala

1948- New textile mills set up at Delhi

1958- Spinning mills at Hissar and Silk mills set up at Delhi

1960 - PVC,Chlor-alkali and Calcium Carbide plant set up at Kota


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1965- Rayon tyrecord plant set up at Kota

1967- Liquor operations started at Daurala

1969- Urea plant set up at Kota

1970- Aromatic chemicals plant set up at Daurala

1972- Textile mills set up at Dasna

- Computers unit set up at Delhi

1977- Precision castings (for automobiles) foundry set up at Ropar

1990- DCM restructured into 4 different groups

1.3 (f) Birth of DCM Shriram industries Ltd.

1994- Drug intermediates company established with works at Daurala (Daurala Organics Ltd.)

- Yarn dyeing and processing unit established at Alwar(Indital Tintoria Ltd.)

1995- Shipping containers company established at Chennai(DCM Hyundai Ltd.)

1997- Joint Venture Liquor company established with works at Daurala (DCM Remy Ltd.)

2004- Commercial production of Anhydrous Alcohol (for admixing field)

2005- Daurala Organics Ltd. amalgamated with DCM

1.4 Corporate Ethos

Enterprises of DCM SHRIRAM Group Endeavour to maintain leadership status by observing norms of excellence in all areas.

1.5 Quality Systems


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Highest degree of product specifications and quality standards is maintained by adopting world-class quality systems. ISO 9000 series certification has been received from RWTUV of Germany and Det Norsk Veritas of Norway.

1.5 (a) Research & Development

Research & Development is a continuous process. Focus is on maintaining a technological edge through product development, technology upgradation, energy conservation, pollution control, optimisation of resources, and conservation of environment. Close connection is maintained with research institutions like the Shriram Institute for Indusatrial Research (SRIFIR), Shriram Cane Research Farm, and Shriram Test House.

1.5 (b) Environment

Manufacturing units of the Group are like garden factories. Utmost attention is paid to treatment of effluents, control of pollution, and conservation of environment. This constitutes a specific target of R&D effort.

1.5 (c) Safety

Safety of men, machines & materials has a high priority. One of the units, Shriram Rayons, has won the National Safety Award consecutively for 15 Yrs.

1.5 (c) Human Resource

Emphasis is placed on worker-management partnership... Achieving corporate goals through the cooperation & dedication of all personnel... Motivating them by imparting a sense of involvement, caring & recognition.

Human resource development, career planning & skill-up gradation are essential parts of the Group's mgmt. process.

1.5 (d) Quality Of Life


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Helping to improve the quality of life of employees is a part of the basic management philosophy of the Group. Facilities like housing, education, healthcare, family welfare, libraries & reading rooms, sports & cultural centers are common features at all units.

1.6 Product & Unit

Manufacturing Units Place Products

Daurala Sugar Works Daurala, U.P. - Sugar- Refined Sugar- Pharma Grade Sugar- Alcohol- Potable Liquor- Aromatic Chemicals

Shriram Rayons Kota, Rajasthan.

- Industrial Rayon - Nylon- Chemicals

Daurala Organics Daurala, U.P. - Drug Intermediates- Fine Chemicals

DCM Hyundai Ltd. Pollivakkam,Tamil Nadu.

- Dry Cargo Marine Freight Containers- Freight containers for Trucks- Sheet metal fabrications

Daurala F & B (P) Ltd.

Daurala, U.P. - Scotch & Blended Whiskies- Liqueurs

1.7 Environment, Health & Safety

DCM Shriram Industries Group has always been dedicated to meeting their responsibility towards protection of environment and conserving scarce natural resources. This has prompted us to adopt the following measures :

Boilers modified for multi-fuel arrangement and can be run on various renewable fuels, viz., biogases, rice-husk and eco-friendly bio-gas (methane).

Effective flue gas wet scrubbing system using in-house technologies to release pollution free flue gases.

ESP's Bio-methanation and secondary Plant set up to obtain eco-friendly bio-gas from

distillery effluent, using in-house technologies. Effluent Treatment Plants set up in all factories to not only control discharge of


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pollutants within prescribed limit but also generates bio gas which is used as a clean fuel in the boilers

Green Belt in and around the factory and residential complexes. Minimizing energy and water consumption in processes. Yearly Plantation practice Newer technology are adopted to minimize consumption of energy and water in

the complex Bio compost plant provides eco-friendly manure to the farmers of the area It is our policy to maintain the wholesomeness of the environment and preserve the

ecosystem.

1.7 (a) Health & Safety

Health and safety of employees and the public is of paramount importance to us. Shriram Rayons, has won the National Safety Award for 15 Yrs. Organize regular training programmed covering all aspects of safety and

hazardous operations. Assessment and elimination of potential hazards/risks to Safety, Health and the

environment, supported by regular safety audits and timely implementation and maintenance of safety systems supported by periodic drills and rehearsals.

1.8 SOCIAL COMMITMENT

Helping to improve the quality of life of our workers is very much a part of the basic management philosophy at DCM Shriram Industries.

Facilities like housing, education, medicare, family welfare, libraries and reading rooms, play grounds and cultural centres for employees and their families are provided at all our units.

Highlights

- Workers' clubs equipped with reading room, sports room, gymnasium etc. to encourage social interaction.

- In-house facilities for regular sports and cultural events at all units, to encourage participation by all


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employees and their families.

- Organizing free family planning & welfare camps in rural areas in collaboration with the local administration on a regular basis.

- Operating charitable hospitals for the workmen as well as people of the nearby villages.

- Maintaining green belts in and around manufacturing sites.

1.9 RURAL DEVELOPMET

The company believes in sustainable development and therefore perform its role in the development of the community in and around its units.

Various programs are regularly undertaken for improving the living conditions of the people in the vicinity of our units

Today, the DCM Shriram name is widely associated with education, health care and welfare activities.

DCM has build Building schools, hospitals, vocational and community centers.

Connecting villages in the sugar factory area with metal led roads and providing other infrastructure such as street lights, solar lighting , culverts, etc. Organizing free family welfare and health camps. Conducting immunization drives. Popularizing and subsidizing biogas plants, smokeless chulhas and solar cookers to meet local energy requirements and protecting the environment. Adopting villages for community development. Providing subsidies to farmers for purchase of agricultural input.

1.10 Shriram Rayons has the following product range.

Rayon Products Nylon Products Chemical Products


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RAYON PRODUCTS

PRODUCT QUALITY

YARN

1220/1 D.TEX RAYON TYRE YARN SUPER-II



1840/1 D.TEX RAYON TYRE YARN(Yarn Package Specification)

SUPER-II

CORD :Made from above yarn to customer specification

1220/2 D.TEX RAYON TYRE CORD SUPER-II



1840/2 D.TEX RAYON TYRE CORD(Cord Package Specification)

SUPER-II

GREIGE FABRIC : Warp - Cord Linear Density of yarn Super-II Viscose Rayon 1220/2, 1840/2,1840/3,2440/2 and to customer specification

RAYON TYRE CORD FABRIC(GREY)

SUPER-II

RAYON TYRE FABRICGREY FABRIC PACKING SPECIFICATIONS(CONTAINERISED)

SUPER-II

RAYON TYRE FABRIC(GREY FABRIC PACKING SPECIFICATIONS)

SUPER-II

RAYON TYRE FABRICDIPPED FABRIC PACKING SPECIFICATIONS (CONTAINERISED)

SUPER-II

1840/1 D.TEX (1650/1 DENIER) DIPPED RAYON CHAFER FABRIC

SUPER-II

R.F.L. Treated Fabric :We treat Greige Fabric of above Specifications or to customer requirement

NYLON PRODUCTS


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Square Woven Chafer Fabric

Wicking and Non-wicking :Multi Filament Nylon 6 or Nylon 66 in Deniers 840 and 1260. To customer Specification. The Yarn for the chafer can also be sourced from customers approved yarn Vendor.

940/1 D.TEX (840/1 DENIER) DIPPED NYLON CHAFER FABRIC

1400/1 D.TEX_(1260/1 DENIER) DIPPED NYLON CHAFER FABRIC

Tyre Cord FabricTo customer specifications in 840/2, 1260/2 And 1680/2 Deniers.

2/1880 D.TEX NYLON TYRE CORD FABRIC (GREY)



R.F.L.Treated fabric :We treat Grieg Fabric of above Specifications or to customer requirement

CHEMICALS

PRODUCT QUALITY

ANHYDROUS SODIUM SULPHATE Coarse Grain Quality (CGQ)

ANHYDROUS SODIUM SULPHATE Normal Quality (NQ/NQA)

CARBON-DI-SULPHIDE As per specifications

1.11 PAST PERFORMANCE

Despite a dismal performance, DCM Shriram Industries has substantially increased its investments in group companies. For the 18-month period ended September 1996, the company recorded an operating loss of Rs 5.68 crore compared with Rs 41.52 crore for the year ended March 1995. This is mainly due to the adverse conditions in the sugar industry and rising input costs.

A sharp jump in interest burden has further affected profits at the gross level. Net loss stood at Rs 47.53 crore against a net profit of Rs 14.86 crore as on March 1995. In fact, the net loss would have been much higher. According to the auditor’s qualifications, capitalization of detention charges, concor charges, etc. amounting to Rs 7.77 crore are not directly attributable to the acquisition of fixed assets, and hence should not have been capitalized. As a result, the


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loss for the year has been understated by Rs 7.77 crore. The auditors were also unable to comment on the recoverability and consequential effect of a loan of Rs 1.28 crore. However, the loan is considered good by the management.

Poor performance has not deterred DCM Shriram from investing in group companies. For the 18-month period ended September 1996, investments increased from Rs 22.17 crore to Rs 46.79 crore. It should be noted that during the same period, the gross block increased by Rs 8.73 crore only. Investments in subsidiary companies DCM Shriram Leasing, Indital Tintoria and DCM Shriram International B V increased from Rs 4.31 crore to Rs 9.41 crore. Similarly,investment in group companies increased by Rs 23 crore. In fact, the company has invested Rs 10 crore in interest-free non-convertible debentures (face value Rs 100) of Daurala Organics.

These debentures are to be redeemed at a premium of Rs 26 each on April 1998 (three years from the date of allotment), with an option to the company to surrender the debentures for redemption prior to the due date in which case no premium would be paid. This means that the company would be getting less than nine per cent annual yield on these loans. As if this was not enough, the company has given an advance of Rs 6.88 crore to the subsidiaries. Advance towards preliminary and pre-operative expenses incurred for DCM Remy was Rs 1.63 crore.

The idea of giving loans is fine as long as the company has enough funds. In fact, DCM has increased its borrowings. As on September 1996, borrowings stood at Rs 244.18 crore, up 59 per cent from March 1995. Higher borrowings, which resulted in huge interest outgo, have already made a hole in DCMs pocket. The net interest cost rose from Rs 13.11 crore to Rs 48.43 crore. DCM has investments of Rs 3.47 crore (last year Rs 0.81 crore) in the subsidiary- Indital Tintoria (ITL). The amount due from this subsidiary is Rs 8.04 crore. DCM has also given a guarantee to financial institutions and banks for repayments amounting to Rs 8.79 crore. As on September 1996, ITL had an accumulated loss of Rs 8.34 crore and a net worth of Rs 4.45 crore. Can DCM recover the money in the near future? According to the annual report, the management is hopeful.

Apart from a liberal attitude towards its group concerns, DCM has also revalued its assets. Of the total reserves of Rs 133.62 crores, revaluation reserves stands at Rs 76.43 crore 57 per cent of the total reserves.

1.12 RECENT DEVELOPMENT


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Mefcom Capital Markets, on behalf of HB Stockholdings, issued a public announcement to the shareholders of DCM Shriram Industries.HB Stockholdings made an open offer to the shareholders of DCM Shriram Industries to acquire up to 3.5 million fully paid up equity shares of Rs 10 each, representing 22.88% of fully paid-up equity share capital at a price of Rs 70 a share payable in cash.

The portfolio management division has targeted to collect at least Rs 1,000 million for management under its schemes by the end of the year 2008. The management has set up a target to opening at least 50 branches/franchisees by March 2008 and scales it up to 100 branches by the end of the next year.

The company has already set up eight one-stop multi-brand showrooms or Hariyali Kissan Bazars (as the company calls these stores) spread in over 8-10,000 sq ft area each for providing all solutions to the farmer community.

The company is going ahead with the plan of taking the total number to around 100 over the next 3-4 years with an investment ranging from Rs 60-lakh to Rs one crore each. The aim is to have multiple stores in each district within a radius of around 25-30 Km.

The company has also entered into a strategic alliance with Bharat Petroleum Corporation (BPCL) for setting up petrol or fuel pumps, which will be run by it. It is working on the philosophy that if a farmer comes for farming solutions, he needs diesel also for irrigation. The first such fuel station is expected be in operation before the end of this month.

Yet another step forward is a tie-up with ICICI Bank Limited on loans and funding for farmers


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CHAPTER N0-2

INTERNATIONAL

TRANSACTION

2.1 INTERNATIONAL TRANSACTION PROCESS


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2.2 EXIM FLOW CHART


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2.3 EXPORT PROCEDURE


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In India, ships transport more than 90 per cent of the cargo. It therefore interesting to

study the export processed by ship documentation related to it.

Processing of an export order----

i. Exporter operation starts with the receipt of enquiry by the exporter from

importer. Bar on the enquiry exporter submits his offer giving complete details

of products technical specific price delivery payment terms etc.

ii. After the process negotiations importer sends a purchase order follow by letter of

credit (if applicable).

iii. The exporter manufactures the goods according to the specification given in

purchase order.

iv. As soon as the goods are ready the exporters invites the representative of Export

inspections agency (EIA) for pre shipment inspection and obtain the certificate

of inspection.

v. After that, the exporter prepared following documents:----

INVOICE

PACKING LIST

ARE1 FROM EXSICE DEPARTMENT

MARINE INSURANCE POLICY

COPY OF PURCHASE ORDER / L/C

vi. Above those documentation sends to CHA by exporter.

vii. Based on these documents CHA agent completes the octroi formalities, obtain

port permit and prepare shipping bill which is a customs documents.


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viii. Custom department check the export cargo on the basis of information provided

on the shipping bill. If satisfy then cargo allow to loaded on the board of ship.

ix. The shipping line gives mate receipts to CHA agents after the payment of ocean

freights and port due obtains the bill of lading (B/L) from shipping line .B/L is

a proof of dispatch of cargo and also a negotiable document.

x. After that, CHA agent send various documents back to exporter which is—

Customs attested invoice

Copy of shipping bill

Full set of non board bill of ladings

Copy of purchase order or L/C

Copies of ARE1 Form

SDF form

xi. After that the exporter submitted above these documents for negotiation to the

bank which include :----

Commercial invoice

Packing list

SDF form

Original copy of purchases order

Certificate of origin

Bill of exchange


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Shipment advice

After that, bank scrutinizes these documents and if found correct make payment

to exporter against documentations.

2.4 EXPORT DOCUMENTATION


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2.5 EXPORT INVOICE

2.5 (a) ELEMENT OF EXPORT INVOICE:-


EXPORT DOCUMENTATION TRANSPORT DOCUMENT

EXCHANGE CONTROL DOCUMENT.

PAYMENT DOCUMENT.

MISCELLANEOUS DOCUMENT

CUSTOMS DOCUMENT

CERTIFICATE

INVOICE

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Exporter Consignee Invoice No. and Date Exporter Ref. Buyer order no and date

Other reference

Buyer (other than consignee)

Country of origin of goods

Country of final destination

Terms of delivery and Payment

Pre-carriage by

Place of receipt by pre-carrier

Vessel/ Flight no.

Port of loading

Port of discharge

Final Destination

Marks and Nos. / No & Kind of pkgs.

Item code

Description of goods

Net weight

Gross weight

Quantity


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Rate CIF EURO

Amount CIF EURO

Amount in words

Declaration:

Authorized signature


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CHAPTER-3

EXPORT BUSINESS

3.1 TO START AN EXPORT BUSINESS


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The first and foremost thing is that one has to form a Company as per the Indian

Rules and regulations. The Company can be Proprietorship, Partnership,

Co-operative society, Trust, Private limited Company or Public limited

Company. A Brief description of different set-up is as under: -

3.1 (a) PROPRIETORSHIP/SOLE TRADERSHIP:

The sole trader is a person who carries on business exclusively by and for him.

The leading feature of this kind of concern is that the individual assumes

full responsibility for all the risks connected with the conduct of the

business. He is not only the owner of capital but is usually the organizer

and manager and takes all the profits, responsibility for losses. There is no

legal formality or need for registration to commence the business provided

it is a lawful business.

3.1 (b) PARTNERSHIP FIRM:

Partnership has two or members/persons but not more than 20 and 10 in the case

of banking business. Each one has agreed to share the profit and loss of the

business in a definite proportion. The business is carried on by all or any

one of them acting for all. It is governed under the Indian Partnership Act,

1932. Partner should be a person competent to enter into a contract and

business should be legal. Partnership can be created orally or written.

Though the registration is not legally compulsory but registration can be

affected at any time by sending a statement in the prescribed form with

prescribed fee to the Registrar of Firms of the locality. Every partner is

jointly and severally liable for all acts of the firm.

3.1 (c) JOINT HINDU FAMILY FIRMS (H.U.F):


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A joint Hindu family carried on a business inherited from its ancestors. It is

governed by Hindu Law. The head of the family, the Karta, has full

authority. It does not require registration. The composition changes by

births, deaths, marriages and divorces in the family. The shares of the

members are not defined. The members are liable only to the extent of

their share in the family business but the head of family has unlimited

liability.

3.1 (d) TRUST:

The business is carried on generally for the benefit of minors, persons of unsound

mind, handicapped etc. Two trustees are appointed. Trust deed is written

and registered with the Registrar of Trust of the State.

3.1 (e) CO-OPERATIVE SOCIETY:

Minimum 7/10 persons competent to enter into a contract are required to form a

Co-operative society. It is a voluntary organization. It can be registered

with the Registrar of Co-operative societies for carrying out lawful

business. Co-operative Societies Act governs it. It is advantageous from

taxation point of view, e.g. Profit is distributed amongst members in the

predetermined ratio after transferring of 25% of profit to Reserves.

3.1 (f) PRIVATE COMPANY:

A minimum of two and maximum of 50 persons are required to form a private

company. It may commence business on grant of certificate of

Incorporation by the Registrar of Companies on receipt of Memorandum of

Association and Article of Association (with certain prescribed restrictions)

along with prescribed fee. It needs to have two Directors. It may be

limited by shares and or by guarantee. Company has separate entity from

its members. The Companies Act, 1956, governs it.

3.1 (g) PUBLIC COMPANY


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A minimum of seven persons required forming a Public Company

After obtaining Certificate of Incorporation, it has to obtain Certificate of

Commencement of Business for commencing business. These certificates

are issued by Registrar of Companies on filling certain documents, such as

Memorandum of Association and Article of Association, Address of

Registered office, Approval for Name, Statutory declaration, along with

prescribed fee, it needs to have a minimum of three Directors. It may be

limited by shares and or by guarantee or with unlimited liability. The

Companies Act, 1956, governs it.

3.1 (h) LETTER HEAD:

Once the type of set up has been decided, the next step is to print letterhead. The

entrepreneur may entrust the job to commercial artist to design the

letterhead and logo of the company. The size of the letterhead should be

“A-4” as per international practice.

3.1 (i) RUBBERSTAMP:

As soon as the name of the company is decided, a Rubber Stamp of the company

is to be made.

3.1 (j) BANK ACCOUNT:

The Company now has to open a Current Account in any Commercial Bank.

While opening account, the entrepreneur may see the facilities, particularly

Foreign Exchange transaction facilities in the Bank. The selection of bank

is very important, particularly keeping in view of the long-term relations to

be established not only with the concerned heads of the Foreign Exchange

Department but also with the staff for getting prompt services.


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3.1 (k) PERMANENT ACCOUNT NUMBER (P.A.N)

The Company now has to apply for a permanent (Income Tax) number from the

local office or via designated agencies of Income tax department, in the

prescribed format along with necessary documents and Fee. It will help you

to forward with a smooth business without any type of taxation related

problems.

3.1 (l) IMPORTER- EXPORTER CODE NUMBER (IEC)

Every person (whether an individual or firm or company etc.) importing or

exporting goods into or from India will require a Code Number unless

specifically exempted by the Chief Controller of Imports and Exports. The

customs authority will not allow any person to import or export goods into

or from India unless such person holds a valid Importer-Exporter Code

Number. The Concerned Regional Licensing Authority, under whose

jurisdiction the applicant’s firm is located, will allot code number.

Application for allotment of IEC should be made in triplicate in the prescribed

form duly accompanied by Bank receipt/Demand draft evidencing payment

of fee along with the following documents:

A) A) Xerox of income tax PAN.

B) B) Certificate from the banker in the form as mentioned in the IEC

application form.

3.1 (m) BUSINESS IDENTIFICATION NUMBER (BIN)

Application for allotment of BIN should be made in duplicate in the prescribed

form duly to the Concerned Regional Licensing Authority, under whose

jurisdiction the applicant’s firm is located or also can made the application

online directly through the website DGFT to have BIN.


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3.1 (n) S.S.I REGISTRATION (TINY UNIT)

All exporters engaged in manufacturing process and whose investment in plant

and machinery is less than five lakhs can file an application for Registration

as a Small Scale Industrial unit. The SSI unit registration benefits you in

many kinds in your future business. It attracts levies and priority in bank

loan interest/electricity rates etc.

3.1 (o) SALES TAX

For producing export goods, manufacturers exporters/traders, should get

themselves registered with the Local Sales Tax Department of the

State/Union Territory where they are located.

3.1 (p) CENTRAL EXCISE (RBA)

All manufacturer-exporters and merchant-exporters engaged in exporting

excisable goods under “bond” are required to open and maintain a Running

Bond Account (RBA) with the Maritime Collector of Central Excise.

However, SSI units whose clearances don’t exceed Rs.25 lakhs

consequently are exempt from excise duty.

3.1 (q) REGISTRATION WITH EXPORT PROMOTION COUNCILS

The general policy in respect of the role and functions of the Export promotion

Councils is given separately.

An exporter may obtain Registration-Cum-Membership Certificate (RCMC) from

any one-export promotion council (EPC) relating to his main line of

business. However, if the export product is such that it is not covered by

any

EPC, the Regional Licensing Authority concerned thereof may issue RCMC in

respect. The Federation of Indian Export Organization (FIEO) shall issue

the RCMC.


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The Chief Controller of Imports and Exports may, on his own motion or otherwise,

direct an EPC or FIEO to register or de-register an exporter of otherwise

issue such other direction to them consistent with and in order to implement

the provisions of the Act, the rules and orders made in the Import and

Export Policy of Ministry of Commerce, Government of India .

3.1(r) CLEARING AND FORWARDING AGENT (C&F/C.H.A)

Clearing and forwarding agents offer a host of services like preparation of

shipping bill, getting the documents authenticated at customs after getting

the consignments checked by customs officers. Some other services them

are as under: -

a) Door to door services

b) Warehousing facilities

c) Regular air consolidation services in India

d) Booking of shipping space

e) Arrangements for insurance policies

f) Arrangements for shipping on board

g) Handling of exhibition goods, its clearance & display at pavilion.

h) Preparation and processing of all kinds of shipping documents

i) Efficient shipment tracking systems like availing of Flight details with

routes and date etc.

Now the exporters have to take special attention to submit the necessary post

shipment documents with his bank and concerned customs/ licensing

authority for getting Licenses/drawback claims if any.

3.1(s) THE SEQUENTIAL STEPS TOWARDS EXPORT OPERATIONS

1. Preliminary Stage: Procurement of all kinds of registration as mentioned

above.

2. Procurement of an export order and its processing: -

a) Terms & conditions of Contract

b) Mode of payment


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c) Confirmation of the order by exporter.

3. Procurement/Manufacture of goods, as per the specification of the importer,

by securing Pre-shipment finance from your bank on the basis of security

of L/C or Confirmed Export Order or Personal bond along with ECGC

policy.

4. Clearance of Excise Authorities, from the premise of the exporter after

physical verification:

a) On payment of duty and subsequent rebate or

b) Clearance under bond.

5. To fulfill the requirement of quality control and pre-shipment Inspection.

6. Dispatch of goods to the gateway port for shipment by road or Rail and

requisite application to be made to the insurance company for obtaining insurance

cover for various risks.

7. Completion of formalities relevant to MEP or floor price regulation,

canalization, certificate of origin, ECGC cover, consular invoice, export license

etc. wherever required.

8. Forwarding of shipment documents to C&F /CHA agent, along with requisite

instructions including booking of space with sea-carrier whose sailing

schedule and ports of call suits the exporter’s delivery commitment. The

documents required by C&F agent for processing prior to shipment are: -

a) Commercial invoice.

b) Original export order.

c) Original copy of L/C.

d) Original G.R form /SDF (It is now waived off by

R.B.I for shipments values less than US$ 25000).

e) Original AR-4A/AR-4 form with duplicate copies.

f) Original excise gate pass.

g) Packing and weight lists.


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h) Certification of inspection.

i) Declaration form in triplicate.

j) Consular invoice where necessary.

k) Export license where necessary.

l) Endorsement regarding floor price, canalization etc. where

necessary.

m) Purchase Memo on demand where necessary.

n) Railway or Lorry receipt.

o) Certificates of origin.

9. The C&F agent takes delivery of the goods from the rail or road carrier and

arranges for storage in a warehouse, till carting order is received from port

authorities. In the meantime prepares the shipping bill with requisite

details for customs clearance. Shipping bill along with other documents

mentioned above is submitted to the export department of the Customs

House, for examination.

10. On clearance of the shipping bill by the Customs Authorities, the C&F agent

presents the port trust a copy of the shipping bill to Shed Superintendent of

the port authorities and obtains Carting order for bringing the export

consignment in the transit shed for physical examination. Thereafter Dock

Challan with requisite details along with assessment of Dock charges

payable is prepared.

11. Dock Challan and the Shipping Bill are forwarded to the preventive officer

for physical examination of the goods and “Let Ship/Let Export”

endorsement.

12. The Stevedore and issue of Mate Receipt by the Master or the Mate of the

ship bring the cargo alongside the vessel with the help of port labour for

loading on the ship.


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13. On payment of port charges, C&F agent obtains the Mate Receipt from the

port authorities. It is then presented to the Customs Preventive Officer for

certifying the fact of shipment on all copies of Shipping Bill. AR-4A/AR-4

form and other

Documents requiring post-shipment endorsement from the Preventive

Officer.

14. The Mate Receipt is presented usually to the Agent of the shipping company

for obtaining requisite number of originals and copies of the Bill of Lading.

15. The C&F agent then forwards to the exporter the following documents: -

1. Full set of Bill of lading.

2. Export Promotion copy of the shipping bill.

3. Copies of customs invoice.

4. Duplicate copy of AR-4A/AR-4 form.

5. Duplicate copy of GR /SDF form (where necessary).

6. Copies of commercial invoice duly attested by customs.

7. Original export order.

8. Original L/C.

16. On receipt of these documents, the exporter sends to the importer the

shipment advice and forwards the following documents: -

1 Non-negotiable copy of the Bill of Lading.

2 Customs invoice.

3 Commercial invoice.

4 Packing list.


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17. He also files a claim with the Maritime collector of Central excise in the port

town for rebate of central excise duty or for getting credit in the bond

account.

18. The exporter secures payment for the value of the export consignment on

presentation and processing of the following documents to the negotiating

bank.

1. Duplicate copy G.R/SDF form.

2. Bill of exchange, first and second exchange.

3. Full set of Bill of Lading (clean on board), all negotiable copies and one

non-negotiable copy.

4. Original copy of L/C.

5. Two copies of commercial invoice.

6. Two copies of customs invoice, if necessary.

7. Two copies of Certificates of Origin.

8. Two copies of packing list.

9. Two copies of Marine Insurance Policy.

10. Four copies of bank certificate.

11. Additional copies of commercial invoice to be certified by the bank and

returned to the exporter.

12. Consular invoice, where necessary.

19. The negotiating bank transmits/sent the following documents to the banker of

the importer by first air mail/express courier followed by a second set of

these documents by the second air mail/courier to ensure receipt of at least

one set, if the other is lost in transit or delayed. (Now a day Messages

through SWIFT are authorized).


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1. Bill of exchange.

2. Negotiable Bill of Lading.

3. Commercial Invoice.

4. Customs Invoice.

5. Insurance Policy.

6. Certificate of Origin.

7. Consular invoice, Export certificate. Where necessary.

8. Packing list.

20. The negotiating bank transmits/send the duplicate copy of

GR/SDF form to the Exchange Control Department of R.B.I. The original copy of

bank certificate, along with attested copies of commercial invoice are

returned to the exporter, and the duplicate copy of the bank certificate is

forwarded to the Jt. DGFT, Import & Exports of the area on repatriation/

receipt of the bill payment.


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CHAPTER-4

EXPORT DOCUMENTATION


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4.1 EXPORT DOCUMENTATION

An export trade transaction distinguishes itself from a domestic

Trade transaction in more than one-way. One of the significant variations between

the two arises on account of the much heavier documentation work which

is characteristic of an export transaction. Some of the documents are a

must in export business, arising as they do on account of “custom of trade”

and conventions governing international commercial practices. Besides,

quite few of these owe their existence to certain statutes; rules and

regulations governing export trade, which inter alias, include export trade

control, foreign exchange regulations, pre shipment inspection, central

excise and customs.

The documentation and procedures are rendered complex on account of the

inevitable involvement of a number of intermediary agencies and

government authorities such as freight forwarders, carriers, insurance

companies, banks, export promotion councils, Inspection agencies, R.B.I

etc. In order to simplify the documentation procedure, a new Aligned

Documentation has been developed.

4.2 ALLIGNED DOCUMENTATION SYSTEM (ADS)

Based on UN layout key and the experience gained in many other developed

countries, the government of India has decided to introduce the ADS with

effect from 1st October-1991. This system involves the preparation of

documents on a uniform and standard A4 size of paper.

The documents are aligned to one another in such a way that the common items of

information are given the same relative slots in each of the documents

included in the system. This makes it possible to prepare one “Master

Document” embodying the information common to all the documents

included in the aligned series and to run off all the aligned documents from


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the same Master Document with the help of suitable masking and

reproduction techniques. The use of masks is intended to blank out such

information as is not required in a particular document.

4.3 Standardized and aligned pre-shipment export documents

On an average, about 24 commercial and regulatory documents are associated with

an export transaction in India . They include 15 important commercial

documents and are discussed as under:

a. Performa Invoice

b. Commercial Invoice

c. Packing list

d. Shipping instructions

e. Certification of Inspection/Quality Control

f. Insurance declaration

g. Certificate of insurance

h. Shipping order

i. Mate receipt

j. B/L/ Combined Transport Document

k. Application for certificate of origin

l. Certificate of origin

m. Bill of exchange

n. Shipment advice

o. Letter to the bank for collection/negotiation.

The commercial documents are those which, by custom or trade are required for

effecting physical transfer of goods and their “title’ from the exporter to the

importer and the realization of export sale proceeds.


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4.4 Regulatory Documents Regulatory Pre-shipment export documents are those, which have been prescribed

by different agencies in compliance of the requirements of various rules,

and regulations under relevant laws governing export trade such as export

inspection, forex, customs etc…. On an average there are 9 regulatory

documents.

a. Gate pass-1/gate pass-2 prescribed by: -

Central excise Dept.

b. AR4-A/AR-4 form -do-

c. Shipping bill/for export Customs dept.

For export of goods ex bond -do-

For export of duty free goods -do-

For export of dutiable goods -do-

For export of goods under claim for -do-

Duty drawback

d. Export application/Dock Challan Port trust

Port trust copy of shipping bill

e. Receipt for payment of

Port charges -do-

f. Vehicle ticket-do-

g. GR/PP/SDF forms R.B.I

h. Freight payment certificate

i. Insurance premium payment

4.5 DOCUMENT CONNECTED WITH TRANSPORTATION OF GOODS.

4.5 (a) Air Way Bill (AWB) Air consignment Note.

The receipt issued by an airline or its agent for the carriage of goods is called

airway bill or air consignment note. It is issued in terms and conditions of

the contract of carriage of goods. It is not a document of title and it is not

issued in a negotiable form.


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Generally AWB is issued in three copies, viz; for the carrier, for the consignee and for the consignor.

4.5 (b) Postal Parcel Receipt (PPR).

Like the AWB, the PPR evidence merely the receipt of the goods to be exported to

the buyer and is not a document of title.

4.5 (c) Bill of Lading (B/L).

A Bill of Lading is the most important document in Foreign Trade. It is generally

issued by a shipping company. It services as a receipt from the shipping

company who undertakes to deliver the goods at agreed destination on

payment of freight in a prearranged manner and also a document of title to

the goods. B/L is generally made out in the sets of two or three originals.

All the originals are duly signed by the master of ship or the agent of the

steamship company and all the originals are equally valid for taking the

delivery of goods and once one original copy is utilized the other originals

become full and void.

B/L is nor a negotiable instrument in terms of Negotiable instrument Act,

However, it is a practice to call the original copies as negotiable copies.

4.5 (d) Combined Transport Document (CTD)

With the introduction of multimode movement of goods in container on the basis

of single contract from and to interior of the country, government has

established Inland Container Depot (ICDs) at selected center. These dry

depots have made it possible to cover the entire movement of goods, from

ICD to destination, under one transport document called CTD. Rules

governing combined transport document are designed by International

Chamber of Commerce (Brochure No.298) considering the international

practices.


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4.6 COMMERCIAL DOCUMENTS.

4.6 (a) Performa Invoice

As the name denotes, it is an invoice in established Performa, payment of which is

not intended. These invoices are used for obtaining financial assistance

like Packing Credit from a banking institution, as Performa invoice

together with an offer, acceptance on which will form a legal contract.

4.6 (b) Commercial Invoice

It is the most widely used invoice in commercial transactions. It is the statement

of account of sale rendered by the seller to the buyer and is prepared on

seller’s letterhead or in the prescribed form on A-4 size paper. It contains

the name of the buyer and his address, date, reference number, quantity,

marks description of goods unit price, total value of goods, terms of

payment/C & B/L no. Etc.

4.6 (c) Consular Invoice

A consular invoice is required by some countries like Canada, USA, etc…a consul

for invoice is required to be prepared in a prescribed format and it should

be signed/certified by the consul of the importing country located in the

country of export. The main purpose of a consular invoice is to enable the

importer’s country to collect accurate and authenticated information about

the value, volume, quality, source etc; of the import for assessing import

duties and for other statistics purposes.

4.6 (d) Customs Invoice

Countries like USA, Canada etc. need custom’s invoice. It is generally made out

on a special form prescribed by the custom authorities of the importing

country and helps for allowing entry of goods in the importing country at

preferential tariff rates. The invoice forms are generally available at the


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consular office of the importing country and are required to be signed and

with ensued after duly filling the same.

4.6 (e) Legalized/ Visited Invoice

These are the invoices sworn for their genuineness by the seller as being correct

before the appropriate consulate/chamber of commerce/embassy as the case

may be and they bear the stamp and authentication of the consulate/chapter

of commerce/embassy as being in order. They collect a nominal charge

from the seller for doing this.

4.7 INSURANCE DOCUMENTS

4.7 (a) Letter of insurance.

This is analogous to cover note issued by the broker. It is stated that particular

subject are placed under insurance and certificate/policy of insurance will

be issued later on.

4.7 (b) Broker’s Certificate

This is also not acceptable as broker issues the same, as broker acts for the insured

and cannot compel insurer to accept the proposal of insurance.

4.7 (c) Insurance Certificates.

The insurance on “open cover” or “floating” policy covering all shipment on

certain terms and subjects to conditions laid down. Unless the insurance

certificate gives details of the conditions of cover it is not so much value to

third party who negotiate the shipping documents.

4.7 (d) Insurance Policy.

This is a basic legal document-evidencing contract of insurance between the

insurer and insured. It gives full details of all the risks covered. Marine or

transit insurance policies can be assigned by the insured merely by


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endorsement and delivery. Insurance policies are issued in different forms

like floating policy, open policy or cover, specific policy etc…

A floating policy is a contract of insurance for covering a number of shipments, the

details of which are not finalized when the contract of insurance is

conclude. The relevant details like name of the vessel, destination,

description of cargo etc. is therefore required to be declared subsequently

and endorse in the policy.

An open cover /policy is valid for a given period of time or permanently open. As

per this policy the insurer undertakes to insure all the shipments for which

the details are already intimated to the insurer.

A specific policy covers specific shipments and such policy is readily available for

submitting with the export documents.

The coverage of risks is classified into categories like A, B, C etc. and the

insurance policies are issued accordingly.

4.8 FINANCIAL DOCUMENTS

4.8 (a) Draft

It is bill of exchange. According to section 5 of the Negotiable Instruments Act,

1881 a bill of exchange is “an instrument in writing containing an

unconditional order, signed by the maker, directing a certain person to pay

a certain sum of money only on or to the order of a person to the bearer of

the instrument.”

A bill of exchange contains an order from the Creditor to the debtor to pay a

specific amount to a person mentioned therein. The make of the bill is


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called the “drawer” the person who is directed to pay is called the

“drawer”. The person who is entitled to receive payment is called “payee”.

In an export transaction it is advisable that an exporter draws a draft, which may

either “at sight/on demand”. Drafts are mainly make in two sets with all

other concerned documents and mailed to the foreign correspondent

through an authorized dealer for presentation to the drawer/importer, When

any of the drafts is paid on presentation it is called an “at sight/on demand

draft and if accepted when it is a usance draft by the drawer, then the

second draft becomes null and void.

4.8 (b) Clean Bill and Documentary Bill

When the drawer of a bill encloses with it a document of title to goods or any

other equivalent document it is called a documentary bill. In an export

transaction the exporter delivers to the banker, documents like full set of

B/L, AWB, PPR etc… together with documents like drafts, invoices,

packing list etc… for presentment to the drawer. Depending upon the

tender of the bill i.e. D/P or D/A, the documents are delivered to the drawer

against payment or acceptance. If no such documents are attached with the

bill, then it is called as a clean bill.

4.8 (c) Stamp Duty

All drafts are drawn on the drawer. Unlike in most of the foreign countries, the

Indian stamp Act does not required the sight drafts to be “stamped”. I.e. no

stamp duty is applicable to drafts drawn at sight/demand bills. Drafts

drawn on usance basis require to be adequately stamped. Stamp duty is the

same no matter whether the bills is drawn or negotiated in India .

4.8 (d) Acceptance of Bill

A bill of exchange payable on demand or at sight or on a fixed date does not need

acceptance and hence presentment for acceptance is unnecessary unless

such presentation is specifically desired. A draft payable after sight must


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be presented for acceptance since the maturity date of the bill can only be

determined after such acceptance.

When the drawer of a bill signified his consent to the drawer’s order in the bill of

writing his name across the face of the bill with or without the word

“accepted” the bill is said to be accepted. Acceptance of a bill, therefore,

Means that the drawer gives his consent to pay the amount mentioned therein on

the due date/maturity date. The foreign correspondent bank usually advises

the due date to the exporter through his banker in India .

4.8 (e) Noting/Protesting of Foreign Bills

At the time the bills are forwarded to the exporter’s bank, it is advisable to provide

the bank with clear instructions/steps to be taken in case the bills are

dishonored on presentation or maturity as the case may be. The

drawer/holder for value may cause the dishonor to be noted by a Notary

Public on the instrument or upon a paper attached thereto or partly upon

each. The notary formally makes a demand of acceptance or payment upon

the acceptor or drawer and on his refusal to do so notes the same on the

bill. Thus “Noting” means the fact that the bill has been dishonored is

recorded on it and puts the drawer/holder for value on a higher pedestal in

the eyes of law. This is done within a reasonable time after dishonor.

Usually the notary makes the following observations: -

a. The date of dishonor.

b. The reason, if any assigned for such dishonor.

c. The Notary ’s charges.

The foreign bills must, thereafter Protested for dishonor, for it is to be placed as

documentary evidence in the court of law. In other words the observations


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made thereon by the notary will be taken at face value. A protest is a

certificate issued by the Notary Public attesting that the bill has been

dishonored and will usually contain: -

a. The name of the person for whom and against whom the instrument has

been protested.

b. A statement that the Notary Public and the reason for dishonor

demanded acceptance or payment from the acceptor or drawee.

c. The place and time of dishonor of the bill

d. The signature of the Notary Public.

4.9 THIRD PARTY DOCUMENTS

4.9 (a) Certificate of Origin

Generally the importer to furnish to him a certificate stating that the goods are of

his country’s origin will call upon an exporter. Independent bodies like, the

Chamber of Commerce, Handicrafts Board, Export inspection Council etc,

will give this certificate… Who Issue them against payment or nominal

fees after being satisfied of the origin of goods. There may be a

preferential tariff in favour of goods from particular countries and

therefore, it has to be ensured that the exporter who has brought them into

his own country from some other place of origin has not reshipped the

goods; which is not eligible for the preference.

4.9 (b) Black List Certificate

This is to certify that the ship/aircraft carrying the goods has not touched a

particular country on its journey or that the goods are not of a particular

country. This certificate is usually called where countries have strained

political relations with another.


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4.9 (c) Packing List

This document showing details of goods contained in each parcel/shipment. It

shows item-by-item the contents of the containers or parcels shipped to

enable the buyer/receiver of the shipment to check the shipment.

4.9 (d) Manufacturer’s/Supplier’s quality/Inspection Certificate

This is a certificate to the effect that the goods, which have been manufactured

supplied are as per the requirement of the contract of sale.

4.9 (e) Certificate of Inspection

Inspection certificate, indicating that goods have been inspected before some

countries need under some contracts or shipment. This certificate is

generally required to be issued by one of the authorized independent

Inspection Agencies like Export Inspection Agency, Textile Committee,

and Central Silk Board etc.

4.9 (f) Certificate of Analysis

Certificate regarding the chemical analysis of the goods issued by a competent

office. Certificate of shipping agent that a certain lot of goods have been

shipped.

4.9 (g) Health/Veterinary/Sanitary Certificate

When the goods imported are foodstuffs, marine products, livestock etc. a

certificate from the health/veterinary/sanitary/authorities is called for. This

is because the importer desires to know if the goods are fit for human

consumption.


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CHAPTER N0-5

INDIAN TEXTILE


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5.1 INTRODUCTION

Textile is the core business of India from the ling time. It is major business for our short term and cottage industries. Indian textile industry is as old as the word textile itself. This industry holds a significant position in India by providing the most basic need of Indians. Starting from the procurement of raw materials to the final production stage of the actual textile, the Indian textile industry works on an independent basis.

5.2 HISTORY OF INDIAN TEXTILE INDUSTRY

India has a diverse and rich textile tradition. It is the second largest producer of textile and clothing in the world with its products being exported to over 120 countries. Recent estimates indicate that the country's textile sector will grow faster in the coming years and contribute a lot to the our overall economy. There are different time per time revolution has been taken place in the Indian textile industry.

The textile sector has been thriving in India for decades. The traditional textile industry of India had virtually decayed during the colonial regime. However, in the nineteenth century, the industry was revived with the establishment of textile mills in Calcutta (now Kolkata) in 1818. Cotton textile industry had begun functioning in Bombay (now Mumbai) in 1850s and the first cotton textile mill in the city was established in 1854 by a Parsi cotton merchant. These growth expectations run contrary to the perceived vied, a decade back or so, that textile was a sunset industry. Till 1985, India has no specialized policies to promote the textile industry. It is 1985 that the government announced a separate policy statement with regard to development of textile sector. In the year 2000, National Textile Policy was announced and since then the Indian textile industry has been exhibiting a distinguished performance opening up new opportunities for the small and medium scale industries (SMEs) in the country.

Parallel to these developments the Indian textile industry has witnessed over the last few years, textile exports of the country have also grown exponentially despite stiff competition from Asian rivals like Vietnam, China, Pakistan and Indonesia. During 2006-07, India's textile exports were valued at $18.73 billion (Rs 84,752 crore) and they are estimated to be at $22 billion in the year to March 2009.


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5.3 LITERATURE REVIEW

The study has been take into implementation of the different research surveys of many famous national and national researchers. ASSOCHAM’ study on textile in India, AC Nielsen’s surveys are the major ones which takes into implementation and there suggestions has been deeply implemented. According to the report given by ASSOCHAM, the textile sector registered 50 per cent increase in investment during 2008-09 to US$ 10.46 billion from US$ 6.57 billion in 2007-08. The textile industry has attracted foreign direct investment (FDI) worth US$ 677 million from April 2000 to March 2009. According to the Textiles and Apparel Report 2007, by the Confederation of Indian Industry and Ernst & Young, the Indian sourcing market is estimated to grow at an annual average rate of 12 per cent from an expected market size of US$ 22 billion-US$ 25 billion in 2008 to US$ 35 billion-US$ 37 billion by 2011.Simultaneously, world's cutting edge fashion brands such as Hugo Boss, Diesel and Liz Claiborne are stepping up their sourcing from India.

According to the ICRA Information, Grading and Research Service, India’s textile and apparel exports to US during January-April 2005 have37%grown by 27 per cent as compared to the corresponding period in the previous year. However this has been at a slower rate as compared to China (59 per cent) during the same period. Indian needs to shift its focus to exports of textile and clothing based on manmade fibers, which accounted a meager 16 per cent of the total textiles and apparel exports in 2004, while 37 percent of US textile and apparel imports constituted imports of manmade fiber in 2004. Thus, it is necessary to leverage our cost advantage in terms of labor costs to boost overall textiles and apparel sector in the future.

5.4 OVERVIEW OF INDIAN TEXTILE INDUSTRY

Indian textile industry is the country’s leading profit gainer industry. It is a very old and traditional business of India. This industry holds a significant position in India by providing the most basic need of Indians. Starting from the procurement of raw materials to the final production stage of the actual textile, the Indian textile industry works on an independent basis. Until the economic liberalization of Indian economy, the Indian Textile Industry was predominantly unorganized industry. The opening up of Indian economy post 1990s led to a stupendous growth of this industry.

Indian Textile Industry is one of the largest textile industries in the world. Today, Indian economy is largely dependent on textile manufacturing and exports. India earns around 27% of the foreign exchange from exports of textiles.


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Further, Indian Textile Industry contributes about 14% of the total industrial production of India. Furthermore, its contribution to the gross domestic product of India is around 3% and the numbers are steadily increasing. Indian Textile Industry involves around 35 million workers directly and it accounts for 21% of the total employment generated in the economy. Indian textile industry concludes of various segments like:

a. Woolen Textile

b. Cotton Textiles

c. Silk Textiles

d. Readymade Garments

e. Jute And Coir

f. Hand-Crafted Textile Like Carpets

g. Man Made Textiles Indian textile industry in a very short span had made a distinct position globally, alluring the globe towards the ‘World of Indian textiles’. This has happened mainly because:

h. High availability of raw materials

i. Highly skilled economical labor, an added advantage

j. Largest producer of cotton yarn contributing 25% towards worlds cotton

k. Availability of all kinds of fibers like silk, cotton, wool and even high quality synthetic fibers

l. Flexibility of the readymade garment industry in terms of sizes, fabric variety, quantity, quality and cost

It’s not just the present that is shinning like a bright start but also the future, as the textile export market of India is expected to reach a high of $50 billion by 2010. This will eventually make a profit by 300%. In order to attain this target Indian textile industry has already started improving their design skills, including a combination of various fibers. Indian textile industry is all set to meet international standards and is planning to invest $5 billion in machineries very soon.

Most of the international brands like Marks & Spencer, JC penny, Gap have started procuring most of their fabrics from India. In fact, Walmart, who had procured textile worth $ 200 million last year, intends to procure $ 3 billion worth of textile this year.


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The golden phase of the Indian textile industry has just begun where the world is chasing it from all nooks and corners.

5.4(a) MAJOR TEXTILE COMPANIES OF INDIA

The major textile companies of India are as follows :-

•Arvind Mills: - Arvind Mills is India’s largest Textile Mill. It has large production in denim, shirting and knitted garments. It is now adding value by manufacturing denim apparel. Its sales are around US$ 300millions.

•Raymond’s:- it is a brand name of Textiles all over the world. It specialized in the diversified woolen garments. It is expanding its products through the organized retail stores and showrooms. It also looking to also expanding denim capacity and to become second largest denim player in India. Its presence in retail will be big positive in future. Its annual sales are around US$ 300 millions

•Reliance Textiles:-Reliance Textiles is one of the major Textile Company that is in business of fully integrated manmade fiber. It has capacity of more than 6 million tones per year. It has joint venture partners like, DuPont, Stone & Wsebster, Sinco (Italy) etc. Vardhaman SpinningVardhman deals in spinning, weaving and processing segment of the industry. It is planning to double its fabric processing capacity to 50 million meters. It is an approved supplier to global retailers like GaP, Target and Tommy Hilfiger. Its sales are little over US$ 120 millions Welspun India (Manufactures terry towels) Century Textiles (Composite mill, cotton & Man-made) Morarjee Mills (Fully integrated Composite Mill) Indo Rama (Cotton and Man-made) GTN Textiles (Cotton Yarn and Knit Fabrics) Ginni Filaments Ltd. (Yarn and Fasbric) LNJ Bhilwara Group (Diversified and vertically integrated denim producer with spinning and weaving capacity) Mafatlal Textiles (Fully integrated Composite Mill) Modern Group (Diversified, producer of denim, syntax and thread) Ashima Syntex (Man-made Fiber) KG Denim (Fabrics) Sanghi Polyesters Ltd. (Manmade Fiber) Nova Petrochemicals (Man-made Fiber) S. Kumar Synfabs Ltd. (Home furnishing and Suit Fabrics) Bombay Dyeing Ltd. (Composite and fully integrated) Rajasthan Petro synthetics (Diversified) BSL Ltd. (Textiles) Garware Polyester (Diversified) Banswara Syntex (Composite)

National Rayon Corp. (Man-made fiber) GSL India Ltd. (Threads) Indian Rayon (Man-Made Fiber) Alok Textiles (Cotton and Man-made Fiber


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Textiles) Sharda Textile Mills (Man-made Fiber) Birla Group Dormeuil Birla VXL Ltd. (Fully integrated woolen textiles) Gokuldas Images (Diversified) Hanil Era Textiles (Yarn, Cotton & Man-made Fiber) Oswal Knit India (Woolen Wear) Niryat Sam Apparels (Apparel) Filaments India Ltd. (Manmade Textiles) The industry has several segments such as hosiery and ready-made garments and is divided into the organised and the un-organised sector, with players from both sectors often grouped together in export oriented clusters. Some of the important textile clusters are based in places such as Bhilwara, Sanganer, Panipat, Palli, Jetpur, Jodhpur, Surat, Sambhalpur, Mysore and Bhiwandi.

5.5 THE TOTAL PRODUCTION OF YARN IN INDIA

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

0500

10001500200025003000350040004500

Quantity

Quantity

The production of yarn shows a increasing trend from last decade. In the year 2003-04 the total production of yarn in India was 2900 million kg. Which has been continuously increasing to 3100(2004-05), 3300, 3600, 3800 and 4200 million kg?

EXPORTS

The Indian textile industry is estimated to be around US$ 52 billion and is likely to reach US$ 115 billion by 2012. The domestic market is likely to increase from US$ 34.6 billion to US$ 60 billion by 2012. It is expected that India's share of exports to the world would also increase from the current 4 per cent to around 7 per cent during this period. India's textile exports have shot up from


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US$ 18.71 billion in 2006–07 to US$ 20.25 billion in 2007–08, registering a growth of over 8 per cent.

5.6 India’s textile export (US $ MILLION)

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

0500

10001500200025003000350040004500

Quanity

Quanity

Some Facts

• India is the largest exporter of yarn in the international market and has a share of 25 per cent in world cotton yarn exports.

• India accounts for 12 per cent of the world's production of textile fibers and yarn.

• In terms of spindle age, the Indian textile industry is ranked second, after China, and accounts for 23 per cent of the world's spindle capacity.

• The country has the highest loom capacity, including handlooms, with a share of 61 per cent in world loom age.

• India is the largest producer of jute in the world.

• It is the second largest producer of silk and the only country to produce all four varieties of silk –mulberry, tusar,eri and muga.

• India is the fifth largest producer of synthetic fibers/yarn. Indian textiles, handlooms and handicrafts are exported to more than a 100 countries, Europe continues to be India's major export market with 22 per cent share in textiles and 43 per cent in apparel, the US is the single largest buyer of Indian textiles and apparel with 19 per cent and 32.6 per cent share, respectively. Other significant


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countries in the export list include the UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan. Readymade garments (RMG) are the largest export segment, accounting for almost 45 per cent of total textile exports and 8.2 per cent of India's total exports. This segment has benefitted significantly with the termination of the Multi-Fibre Arrangement (MFA) in January 2005. RMG exports from India were worth US$ 8.51 billion in FY 2008. They are expected to touch US$ 14.5 billion by 2009–10 with a cumulative annual growth of 18 to 20 per cent, according to the Apparel Export Promotion Council. Another segment in which India has excelled in the export market is carpets. Exports of carpets have increased from US$ 654.32 million in 2004–05 to US$ 806.71 million in 2007–08. Significantly, apparel is the second largest retail category in India. It accounts for about 10 per cent of the US$ 37 billion Indian retail market, and with the continuing boom in consumer demand is estimated to grow at the rate of 12–15 per cent annually. In fact, reflecting the huge opportunity in this segment, AT Kearney's 'Retail Apparel Index' ranks India as the third most attractive market destinations for apparel retailers.

5.7 MAJOR TEXTILE EXPORT PROMOTION COUNCILS OF INDIA

The major export promotion councils of India are given as follows :-a) Apparel Export Promotion Council b) Cotton Textile Export Promotion Council c) Handloom Export Promotion Council d) Indian Silk Export Promotion Council e) Apparel Export Promotion Council :- APEC is a nodal agency sponsored by the ministry of Textile, Govt. of India. It performs the following functions:-

•Monitors garment exports quotas and promotions of exports of readymade garments of India.

•Continuously involves in the task of promoting exports by organizing buyer-seller meets,

•Leads trade delegations to potential markets globally.

•Participates in specialized international fairs.

•Organized the Indian International Garment Fair biannually. Cotton Textile Export Promotion Council: - Cotton Textile Export Promotion council is an autonomous, non-profit export promotion body. Its activities includes

•Acting as an international face of Indian Textile Exports.

•Collection and dissemination of information. Handloom Export Promotion Council :-It is a statutory body. It’s function is to promote the exports of all handloom products like fabrics, home furnishings, carpets and floor covering etc.Indian


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Silk Export Promotion Council :- It is the nodal agency for promotion of silk exports from India. Consist of more than 1200 silk exporters as members

5.8 INDIAN TEXTILE POLICY 2000

Highlights of the National Textile Policy 2000. The Government of India recently announced the new National Textile Policy (NTP) 2000, with the objective of facilitating the industry to attain and sustain a pre-eminent global standing in the manufacture and export of clothing. In furtherance of these objectives, the strategic thrust is to be placed on technological up gradation, enhancement of productivity and quality, product diversification, and strengthening the raw material base in the country.

Through NTP 2000, the Government would endeavor to achieve the target of textile and apparel exports from the present level of U.S. $11 billion to U.S. $50 billion by 2010. Of this, the share of garments would be U.S. $25 billion’s The policy provides for setting up a venture capital fund for tapping knowledge-based entrepreneurs and assisting the private sector to set up specialized financial arrangements to fund the diverse needs of the textile industry. The new policy would also encourage the private sector to set up world class, environment-friendly, integrated textile complexes and textile processing units in different parts of the country and would review and revitalize the working of the TRAs (Textile Research Associations) to focus research on industry needs. Sect oral Initiatives Within the framework of the new Policy, the following sector specific initiatives will be taken: RAW MATERIALS The thrust will be on improving the availability, productivity and quality of raw materials at reasonable prices for the industry. Though cotton is expected to continue to be the dominant fiber, special attention will be given to bring the balance between cotton and non-cotton fibers closer to international levels. Cotton. The primary aim of the policy for this segment will be to improve production, productivity and quality, and stabilize prices. The Technology Mission on Cotton will be the instrument for achieving these parameters. Ministry of Textiles, Ministry of Agriculture, Cotton growing States, farmers and industry associations will be actively involved in the implementation of this Mission.

Silk Focus will be on achieving international standards in all varieties of silk. Steps will include:

• Improving Research & Development and effective transfer of technology at all stages.

• Increasing the production of non-mulberry varieties of silk.


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• Encouraging clustering of activities of reeling and weaving and strengthening linkages between producers and industry.

• Reviewing the import policy periodically for raw silk, taking into account the balanced interests of the Seri culturists as well as the export manufacturer’s. Ê Wool In order to augment availability of quality wool, the following measures will be initiated:

• Take up collaborative research projects with the leading wool producing countries of the world.

• Encourage private breeding farms to increase productivity.

• Promote private sector linkages for marketing of wool.

• Take up an integrated development program for angora wool. Jute A Technology Mission on Jute will be launched to achieve the following objectives:

• Develop high yielding seeds to improve productivity and acceptability in markets.• Improve retting practices to get better quality fiber.

• Transfer cost effective technologies to the farmers and create strong market linkages. Clothing the role of this sector is poised for radical change in view of the transformation in the international trading environment brought about by the rules and regulations of the WTO. The industry will be restructured as follows:

• Garment industry will be taken out of the SSI reservation list.

• Joint ventures and strategic alliances with leading world manufacturers will be promoted.

• Schemes with necessary infrastructural facilities for the establishment of textile/apparel parks will be designed with the active involvement of state governments, financial institutions and the private sector. Jute Industry In the jute sector, attempts would be made to revive the jute economy through supportive measures covering research and development, technology up gradation, creation of infrastructure for storage and marketing of raw jute, and product and market development activities for jute and diversified jute products. Spinning Sector the NTP seeks to continue efforts to modernize and upgrade technology to international levels, and proposes to take the following steps, in cotton spinning as well as in the worsted woolen sectors:

• Encourage the spinning sector to continue to modernize.

• Liberalize and encourage export of cotton yarn. Organized Mill Industry Efforts will be made to restore the organized mill industry to its position of pre-eminence


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to meet international demand for high value and large volume products. For this purpose, the following measures will be initiated

• Integration of production efforts on technology driven lines

• Encouragement for setting up large integrated textile complexes

• Strategic alliances with international textile majors, with focus on new products and retailing strategies

• Creation of awareness and supportive measures for application of IT for up gradation of technology, enhancement of efficiency, productivity and quality, better working environment and HRD. The earlier policy of not nationalizing sick units will be continued. As regards the unviable Public Sector Undertakings (PSUs), various options for strategic partnerships or privatization will be explored. Non-viable mills will be closed down with provision for an adequate safety-net for workers and employees. Power loom Industry The power loom sector occupies a pivotal position in the Indian textile industry. However, its growth has been stunted by technological obsolescence, fragmented structure, low productivity and low-end quality products. The focus will therefore be on modernization of power loom service centre and testing facilities, and clustering of facilities to achieve optimum levels of production. Handloom Industry The handloom sector is known for its heritage and the tradition of excellent craftsmanship. It provides livelihood to India’s millions of weavers and crafts-persons. The industry has not only survived but also grown over the decades due to its inherent strengths like flexibility of production in small quantities, openness to innovation, low level of capital investment and immense possibilities for fabric design. The Government will continue to accord priority to this sector. Steps would be taken to promote and develop its exclusiveness for the global market. Measures will include the following:-

• Training modules for weavers engaged in the production of low value added items with the objective of upgrading their skills to enable them to find alternate employment in the textile or other allied sector

• Comprehensive welfare measures in close cooperation with the State Governments, for better working environment and social security of weavers

• Effective support systems in R&D, design inputs, skill up gradation

• Review of the Hank Yarn Obligation Order and the Reservation Orders issued under the Handloom (Reservation of Articles for Production) Act 1985, keeping in mind the needs of handloom weavers Merchandising and marketing will be central to the success of the handloom sector, the present package of schemes


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for production of value added fabrics will be streamlined, innovative market oriented schemes will be introduced, and joint ventures will be encouraged both at the domestic and international levels. Brand equity of handlooms will also be commercially exploited to the extent possible. Knitting Hosiery knitting, the growth of which has accelerated during the last decade primarily because of expansion of hosiery into global fashion knitwear, is expected to expand into the apparel and home furnishing sectors. In this segment, the following measures will be taken:

• Review of the Policy of SSI Reservation for this sector

• Encouraging technology up gradation and expansion of capacity

• Introduction of support systems for commercial intelligence, design and fashion inputs Carpets While machine-made carpet manufacturing in the mill sector will be guided by the policy framework for the organized industry, the policy for the hand knotted carpet sector will focus on sustained growth of exports and welfare of weavers and their children. Encouragement will be given to the manufacture of products that conform to and bear the ‘KALEEN’ mark of standards, with insistence on compliance with the provisions of the Child Labor (Prohibition and Regulation) Act, 1986. Government intervention will be in technology up gradation, including indigenization of machines, development of testing facilities, and use of natural dyes. Adaptation of traditional motifs and promotion of brand image would also constitute thrust areas.

5.9 SWOT ANALYSIS OF INDIAN TEXTILE INDUSTRY

- Indian Textile Industry has done a remarkable achievement in terms of growth and earning foreign exchange. The SWOT analysis of the industry is given as follows:-

a. STRENGTH

• A large organized sector.

• A big production of yarn and silk.

• Govt. initiatives.

• A healthy foreign market share of 25%.

• There are well-established production bases for made-ups export as well as for domestics market.


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• There is adequate processing facility for yarn dyeing and production of yarn dyed Fabrics. Availability of well engineering industries.

• There are a large number of power loom owners and looms that are expanding in size over the recent period.

b. WEAKNESS

• Poor supply chain management.

• Unavailability of skilled labors.

• Poor Transport facility.

• The most serious problem of the industry is the lack of adequate processing facilities; there is over-dependence on hand processors and traditional items.

•The majority of the SMEs are tiny and cottage type units without sufficient capital back-up.

•The quality of wider-width fabrics for meeting the export demand is lacking in many respects, which is acting as a disadvantage to the growth of the industry.

c. OPPORTUNITIES

•A vast rural market in the country and European market.

•Upcoming commonwealth games in the country.

•Grey fabric export is continuing to grow and will show increasing trends.

•Nearly 40 textiles parks are being set up throughout the country under the Scheme for Integrated Textile Parks (SITP), which is stated to attract an investment of Rs 21.502 crore (US$ 4.42 million) and create employment, both direct and indirect for 9.08 lakh workers and produce goods worth Rs 38.115 crore (US$ 7.82 million) annually.


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d. THREATS

•Abolition of quota system will lead to fluctuations in the export demand

•Increasing competition from other states/centers (like Surat) will be a major problem where the industries have come up afresh and are well developed and technologically more advanced.

•Entry of global competitors


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CHAPTER-6

DATA ANALYSIS


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6.1 DATA ANALYSIS

6.1(a) Data of the duration of purchasing habits of peoples

\

Once a month Twice a month Every two month gap

Once a year Occasionally0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Interpretation

The above data shows the purchasing durations of the customer for readymade garments. According to that data, more than 35% (39 %) peoples goes once a month for purchasing readymade garments. 21% peoples goes occasionally like- during festive season, during going for important parties, during going to tour etc. 17% people goes at an interval of every two months gap, 15% goes twice a month and at last 8% peoples purchases once a year.


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6.1 (b) Buying Habits of peoples

Branded Cheaper Colour varity Fashionable0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Interpretation

Day per day the buying habits’ of customers are changing. At the present time, more than 40% people are looking for a fashionable verity of products, 35% looking for a good brand they are the working class and higher class peoples, 18% customers goes for verity of colors’, ex- different color verity of formal shirts for offices or occasions, at last 6% customers looking for cheaper products.


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6.1 (c) Buying Destinations of customers

Mall Retail Outlet Company showroom

Local Store0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

Interpretation

The present customers have change their favorable place for buying products from traditional retails to modern malls. Approx 50 % customers go local stores for purchasing of readymade garments. 30% goes to organized retail stores like, Big Bazaar, Vishal Mega Mart, TNG, Cotton County etc. 10% customers are looking foe the authorized showrooms of the company and 12% customers are looking for malls.


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6.1(d) Purchasing Limit of Customers

Below 1000 1000-2000 2000-3000 Above 30000%

5%

10%

15%

20%

25%

30%

35%

40%

Interpretation

At the present time, the average customer wishes to pay Rs. 1500 to 3000 for a readymade garment. 28% customers are those whose purchasing limit is between 1000to 1500. The 19% peoples have a purchasing limit of below 1000 they are the people of semi urban areas.


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6.51 (e) Purpose of purchasing of readymade garments

For Party wear For Office Purpose

For Daily Use General Purpose0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

Interpretation

Basically, the main purpose of purchasing of readymade garments are for occasions or general purpose but from the last decade, it is found that more than 35% customers are purchasing garments for office use, it is only due to the corporate dress code. 30% garments are sell for general purpose, 20% for daily use, and 15% for party wear.


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6.1 (f) References for purchase

Friend Advertisement Parents Other0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Interpretation

•41% customers influenced by their friends and other relatives.

•35% customers influenced by advertisements.

•20% customers influenced by other source of reference.

•4% customers influenced by their family members.


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6.1 (g) Companies with most Festival offer

Arwind Mills Reliance Raymond Birla group Other0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

Interpretation

At the modern time the main promotion strategy of maximum companies are offering attractive schemes and free offers like. buy one get two free, etc. in this field Arvind Mills leads with 32% of market share, Reliance textiles follow with 18%, Raymond’s with 15% and Birla Groups occupies 11% market share in offering attractive schemes. The other MNCs and some local companies maintain a healthy share of 20% in issuing attractive schemes.


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6.1 (h) Market share of major textile company

Arwind Mills Reliance Raymond Birla group Other0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Interpretation

Arvind mills leads the market with a capitalization of 39%, it followed by Reliance Textiles with 20%, Raymond’s occupied third place with a market share of 18% of shares. Birla Groups has also occupies a healthy market share of 16% with the entry of some international brands like Van Husain. Other players like Bombay Dyeing, Mafatlal Shutting etc occupied the rest of 7% of market.


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6.2 DATA ANALYSIS OF RATE PROVIDED BY THE PEOPLE ON THE BASIS OF FOLLOWING FACTORS

We have asked the people to give rates to the product on the basis of following factors PRICE QUALITY LOOKS. On the basis of their choices we have got the following data:

Bar Chart for analysis

Excellent V. Good Good Average Below Average0%

10%

20%

30%

40%

50%

60%

Price Quantitylook

Conclusion

In this analysis, we found that majority of people want quality product as the people has given highest rating to quality where as looks and price are somehow rated equally by the people


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6.3 FINDINGS, SUGGESTIONS AND CONCLUSION

a. KEY FINDINGS

After going through the whole study I found the following key findings:-

1. The Indian Textile Sector is an emerging sector of India.

2. The organized textile sector is more develop than the unorganized sector.

3. The growth rate of this sector is increasing much higher with a healthy rate of 20%.

4. It contains a major part in industrial production and export of country.

5. The increasing income level of people supports the growth of the industry.

6. Low level of technology and poor supply chain management are major resistance in the development of the industry. So the major companies and the govt. has to do a hard work on it.

7. There is a high availability of raw materials

8. Highly skilled economical labor, an added advantage

9. Largest producer of cotton yarn contributing 25% towards world’s cotton

10. Availability of all kinds of fibers like silk, cotton, wool and even high quality synthetic fibers

11. Flexibility of the readymade garment industry in terms of sizes, fabric variety, quantity, quality and cost

b. SUGGESTIONS

After the basis of above facts and findings I come to the following suggestions:-

1. There is a need to improve our supply chain or logistic management.

2. There is a need to some more liberalization of export tariffs.

3. Need of import and implement of high quality technology.


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4. Govt. has to provide some more financial assistance to the domestic textile companies.

5. The all promotion councils have to provide technical and management assistance to the domestic industries.

6. Need to improve the quality of raw materials like cotton, yarn, synthetic etc.

7. Proper implementation of eleventh five year plan.

8. Build up world class state of the art manufacturing capacities to attain and sustain predominant global standing in manufacture and export of textiles and clothing.

c. CONCLUSION

As we analyzed the various data based on questionnaire, a fact has came into light that Arvind Mills is the most known and popular Brand in context of major Textile giant followed by Reliance and Birla Group. Because of applying innovative ideas such as providing various facilities, launching new schemes & offers Arvind Mill’s garments are more used by people as compared to other one. Except it, people firstly prefer for good quality and comparatively low prices Textile garments then they emphasized on qualities and durability


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BIBILOGRAPHY

Some books helped us to have an idea about research methodology and preparing questionnaire. These reference books are:

RESEARCH METHODLOGY - NARESH K MALHOTRA

RESEARCH METHODLOGY - C R KOTHAR

WEBSITE ADDRESS:

-www.wikipedia.com

- www.moneycontrol.com

-www.google.com

www.hepcindia.com

- www.indiancarpet.com

- www.aepcindia.com

MAGAZINE

-Textile policy 2000


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QUESTIONNAIRE

Name:-……………………………………..

Age:-………………………………………..

Address:-……………………………………

Occupation:-……………….........................

Contract No.:-……………………………….

1. What is your total monthly income? A) Below 5000 _______ B) 5000 to 10000_______ C) 10000 to 20000 _______ D) Above 25000 _______

2. How many times you go to store for purchase readymade garments?

A) Once a month______ B) Twice a month_____

C) Every two months gap______ D) Once a year _______

E) Occasionally _______.

3. Which kind of garments you like to prefer?

A) Branded______. B) Cheaper _______

C) Color Varity ______ D) Fashionable ______.

4. Where you go for shopping of garments?

A) Malls _______ B) Retail stores ______

C) Company Showrooms_______ C) Local stores ______.

5. What is your minimum purchasing limit of a readymade garment?

A) Below Rs. 1000 B) Between 1000 to 1500

C) Rs. 1500 to Rs. 3000 D) Above 3000

6. What is the purpose of your purchasing of garments?

A) For Party wear B) For office purpose

C) For daily use D) General purpose


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7. Which factor mostly affects your decision while purchasing any readymade garments?

A) FRIENDS B) ADVERTISEMENT

C) PARENTS D) OTHERS

8.Which company provides you most festival offers?

A) Arvind Mills B) Reliance

C) Raymond’s D) Pape Jeans

9.Which brand you prefer much more?

A) Arvind mills B) Reliance Textiles

C) Raymond’s D) Birla Group

E) Others

10.Suggestion…………………………………………………………………………................................................................................................................


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