By: Dr. G.B. Karthikeyan and Dr. K.P. Malathi Shiri


Indiais the world's second largest producer of textiles and garments after China. The 1970s brought a dramatic growth spurt to the apparel industry, which continuethrough 1980s to 1990s and established large, billion dollar corporation as theindustry leaders which continued through the early 2000s, when smaller tomedium sized apparel companies merged to become more competitive with largercompanies. The industry shifted from an entrepreneurial generalist structure inwhich company owners made the critical marketing, product development, andmanufacturing decision to a professional specialist structure with marketingspecialist, product development specialist, and manufacturing specialist.


In the garment industry, the merchandiser acts as the BRIDGEbetween the management (or) industry and the buyer. He is the person whohandles around 75% of the cost related to the garment & the production cost is only be almost about 25% of the garment, and is hence responsible part forthe financial benefit of the Company. One of the important decisions regardinggarment was the deregulation of the garment sector from the SSI sectors.


In the New Textile policy 2000, certain items were deservedfrom the SSl list. In March 2003, the SSl limit in the garment industry was setat RS.5crore.lf the investment in the unit was more than 5crore, then it wasconsidered as 581 provided they exported 50% of the total production and export obligation of 50% of the new (or) additional production annually isachieved within a period of 3 years.50% of this export obligation should not beto non quota countries and foreign Direct Investment (FDI) should be to theextend of 25%. The FDI cap was allowed to be exceeded in EPZ's (Export ProcessingZones) and SEZ (Special Economic Zones) only. (Gayatri D Rao 2005)



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About the Authors


The authors are Faculties in Hindustan School of Management, Coimbatore



Originally published in New Cloth Market; May 2009