Geography
The cotton textile industry is the highest employment generator amongst the agro-based industries in India. The growth of this industry is mainly in the Gujarat-Maharashtra belt. Mr. Rahat, a rich industrialist wants to invest his money in this industry.
(a) Which are the most important factors which have led Mr. Rahat to invest in the industry?
(b) Where would you advise him to set up his unit?
(c) List any three problems of this industry. How would you advise Mr. Rahat to tackle them?
(d) Is there an alternate industry that can be set up in this belt? What is it? Compare the profitability of both.
Agro Based Manufacturing Industries
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Answer
(a) The most important factors which have led Mr. Rahat to invest in the industry are as follows:
- Close proximity to raw materials
- Favourable climatic conditions
- Well-developed transport facilities
- Well-developed port
- Enough labour force
- Adequate capital
- Sufficient power
- Huge market for cotton textiles.
(b) I'd advise Mr. Rahat to set up his unit at Mumbai as it offers advantages like raw cotton availability, skilled labour, industrial infrastructure, and good port connectivity for export.
(c) Three problems faced in this industry, and ways for Mr. Rahat to tackle them are given below:
- Shortage of raw material — Mr. Rahat can partner with local farmers through contract farming, support better seed varieties, and invest in sustainable cotton farming initiatives.
- Loss of foreign market — Mr. Rahat should can focus on high-quality cotton products, branding and diversification into blended fabrics. Also, adopt eco-friendly practices to appeal to global markets.
- Obsolete Machinery — Mr. Rahat should invest in modern, energy-efficient machinery and automation to improve productivity and product quality.
(d) Yes, Sugar industry can be set up in Maharashtra.
Profitability Comparison between Cotton Textile Industry and Sugar Industry
| Aspect | Cotton Textile Industry | Sugar Industry |
|---|---|---|
| Raw Material | Relies on cotton, which is seasonal and impacted by climate. | Dependent on sugarcane, which is water intensive and sensitive to rainfall. |
| Investment | Requires high investment in machinery and skilled labour. | Moderate capital required, often supported by cooperatives. |
| Profit Margin | Moderate, but increases with exports, value-addition. | Lower profit margin due to high production cost and pricing regulations. |
| Employment | High employment, especially in spinning, weaving and garmenting. | Moderate employment, mostly in seasonal crushing and allied industries. |
| Export Potential | High- Cotton garments and fabrics are major export earners. | Moderate- Sugar exports fluctuate due to government policies and international prices. |
Cotton textiles have higher long-term profitability and export potential than Sugar industry. Hence, for long-term growth and better returns, Mr. Rahat should go ahead with cotton textiles.
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