Cotton trade - the early beginnings

Roman Cotton Toga Parties: Around 200 BC Roman ships docked at ports on the Southwest coast of India to pick Indian fabric from which their coveted togas were fashioned. Roman emperors paid fabulous sums for the prized Indian cotton [Muslin], which was known as mal mal khaas. Pliny complained of the trade deficit that the Roman empire was running with India . The Romans called this mal mal khas as 'woven air' or `vetri venti' or woven winds.

Europe & love for Calico: The hunt for spices led the Europeans also to the southwestern coast of India in AD 1500 to Kozhikode, also called Calicut , in northern Kerala. Calicut was a famous cotton-weaving centre and it is remembered as the place of origin of calico, to which it gave its name (i.e., Calicut ). Calico refers to an all-cotton fabric woven in plain, or tabby weave and printed with simple designs in one or more colours.

Calico originated in Calicut, India. By the 11th / 12th century, Hemachandra, an Indian writer, mentions chhimpa, or calico prints, decorated with chhapanti, or a printed lotus design. The earliest fragments to survive (15th century) have been found not in India but at Fustat, in the neighbourhood of Cairo in the 15th century. The calico examples are resist-dyed (in which parts of the fabric to be left un-dyed are covered with a substance that resists the dye) and block-printed, and are of Gujarati manufacture. In the 17th and 18th centuries calicoes were traded between India and Europe. Printed calicoes were generally used for hangings and bedcovers, as well as for dresses in England .

Chinese & southeast Asian connection: In AD 1300 Marco Polo records the exports of Indian textiles to China and South East Asia from the Masulipattinam (Andhra) and Coromandel (Tamil) coasts in the "largest ships" then known. It is conjectured that the initial development of this trade accompanied the spread of Indian cultural influence in South-East Asia. John Guy in the "Arts of India, 1550 - 1900", points out that "textile patterns on sculptures of Indian deities in central Java and elsewhere in the region very probably reflect the prestige cloths in circulation in the late first millennium".

The Chinese traded in textiles extensively with India during 1300-1800 in the times of the Ch'ing & Ming dynasties. Cochin , in Kerala, still has buildings that show this Chinese influence. At the Khmer capital of Angkor at the end of the thirteenth century, preference was given to the Indian weaving for its skill and delicacy. Prestige trade textiles such as Patola (double ikat silk in natural dyes) from Patan and Ahmedabad, and decorative cottons in brilliant colourfast dyes from Gujarat and the Coromandel coast were highly sought after by the Indonesian-Malaysian royalty and wealthy traders of the Philippines . The port city of Surat (in Gujarat) emerged as the major distribution point for Patola destined for South-East Asia, and was frequented by the ships of the Dutch East India Company. Wearing the Patola was the exclusive right of the Indonesian nobility.

The Dutch East India Company was the main distributor of Patola to local rulers in the East Indies. As part of the incentives offered to win local trading concessions and co-operation, embroidered bedspreads and wall hangings made in Satgaon, the old mercantile capital of Bengal, (near modern Calcutta) were also distributed. Quilts of embroidered wild silk (tassar, munga or eri) on a cotton or jute ground, combining European and Indian motifs were commissioned by the Portuguese who had been attracted to Bengal as traders by the quality of the region's textiles. Cambay also produced silk embroidered quilts. Textiles from Golconda and further south also found favour in Europe and South East Asia. In the early 1600s, Dutch and English trading settlements were established in Golconda territory.

Produced in the Golconda hinterland, were the famous kalamkaris. These were/are finely painted cotton fabrics and were bought or commissioned from the port city of Masulipattinam . Buying at source enabled the Dutch and English merchants to procure these textiles at rates thirty per cent lower. 'Palampores' were/are painted fabrics based on the "tree of life" motif that had become popular in the Mughal and Deccan courts.

Chintz appears in European market and soon disappears: The attractiveness of fast dyed, multi-coloured Indian prints on cotton (i.e. chintz) in Europe led to the formation of the London East India Company in 1600, followed by Dutch and French counterparts. By the late 1600s, there was such overwhelming demand for Indian chintz (whether from Chittagong in Bengal, or Patna or Surat, that ultimately French and English wool and silk merchants were able to get the governments to ban the import of these imported cottons from India - the French in 1686, while the English followed in 1701.

The British East India Company also traded in Indian cotton and silk fabrics, which included the famous Dacca muslins. Muslins from Bengal, Bihar and Orissa were also popular abroad.(Muslin-a very thin cotton material).

Centres of textile trade: For the land based Silk routes and international trade, the textile centres of trade were located in Northern and Central India. These areas were the kingdoms of the Rajputs and the Mughals, each with their own unique specialization. Kashmir was well known for its woollen weaves and embroidery [so-called paisley motifs - or the Mango designs]. Cities like Benaras, Ujjain, Indore and Paithan (near Aurangabad ) were known for their fine silks and brocades. Rajasthan specialized in all varied patterned prints and dyed cloths. Fine collections of Indian Textiles can be seen in the Calico Museum in Ahmedabad and in the Crafts Museum in Delhi

Cotton trade - AD 1600 - 1800

South Asian Textiles Inc. or The Golden Age of Cotton Trade

The foundations of the Indian textile trade with other countries began as early as the second century BC. A hoard of block printed and resist-dyed fabrics, mainly of Gujarati origin, found in the tombs of Fostat, Egypt, are proof of large-scale Indian export of cotton textiles to Egypt in medieval times [1500].

On July 8, 1497, Vasco Da Gama sailed from Lisbon with four ships. Two were medium-sized three-masted sailing ships, each of about 120 tons, named the "São Gabriel" and the "São Rafael"; a 50-ton caravel, named the "Berrio"; and a 200-ton freight-ship. The expedition reached Mombasa (now in Kenya) on April 7 and dropped anchor at Malindi (also now in Kenya ) on April 14. An Arab pilot who knew the route to Calicut, on the southwest coast of India , was taken aboard. Calicut was reached on May 20-1497.The rest as they say is history.

While Chinese Silks had reached the Roman Empire and Europe in the middle-ages via the grand old multiple arms via Bokhara, Tashkent , Heart of the land silk routes, this was always in limited quantities and for the few wealthy elites.

Weaving & Software engineering:

In the period 1600-1800, by a strange twist of History and coincidence, much in the same way as the present day Software Engineering might of India has come up, Indian Textiles found their way to Europe and the East Indies. The two professions are strangely similar; both weaving and software engineering require painstaking labour intensive work, stitch by stitch and line by line of code & weave of cloth, and both put an inordinately heavy demand on the eyes and hands. It is no exaggeration to say that the millions of yards of textiles that have been made in South Asia and exported, is probably matched by the millions of lines of Software programs/ code [in various flavours of Java, C++, Fortran programming languages] by primarily young, intelligent Indian software engineers and more recently Pakistani software engineers for the western countries.

It was perhaps a great irony of history that the opening up of the sea routes by the Europeans such as Vasco Da Gama would lead to the domination of Textiles in Europe by the Indian textile industry.

See the references below for details of this Golden Age of Indian Textiles:

Medieval India : An Industrial Miracle in a Golden Age: The 17th-Century Cloth Exports of India .] Bennet Bronson, Associate Curator, Asian Archaeology and Ethnology, Field Museum , Chicago .

2. "Trading Places: The East India Company and Asia 1600-1834" - Anthony Farrington, publishers - British Library, 2002.

'Giants of an Earlier Capitalism': The Chartered Trading Companies as Modern Multinationals," Ann Carlos and Nicholas, Stephen. 1988. " Business History Review. 62 (Autumn): 398-419.

4. The Trading World of Asia and the English East India Company, 1660-1760.- A review of reviews -Cambridge: Cambridge University Press. K. N. Chaudhuri. 1983. South Asia Research ( London ) 3 (1) (May): 10-17.

Cotton Textile Timeline:

The old land based silk routes [via central & south Asia] were effectively made obsolete finally by the technology of the European "Clipper" ships [the clipper at Greenwich carried tea in a record voyage time of 2 weeks between India and London ]. The European traders, namely the Portuguese, the Dutch and the English [Dutch - Oostindische Compagnie- East India Company] traders with their supremacy at the seas, found that in order to buy spices from the Indonesian and south Indian growers, they had to use Indian textiles or gold.

The gold and silver that the Spanish and Portuguese plundered from the Americas eventually went to India and China, to pay for the spices and the textiles luxuries - famously the gold which Sir Francis Drake, the buccaneer /pirate, with the support of Queen Elizabeth I, had been busy plundering from the Spanish Galleons off the coast of South America in the years 1570-1580.

The cotton weavers of Gujarat in India produced three million pieces a year for export. Indeed the most powerful monarchs in the world during the periods 1400-1800 at the end of the seventeenth century were not Louis XIV or Peter the Great but the Chinese emperor, K'ang-hsi (1662-1722)- of the Ching Dynasty, and the Mughal emperors of India . China and India had about 150 million inhabitants in 1750, each of them twice the population of Europe.

Both the Dutch and the British East India Companies were the fore-runners of modern day Multinational Corporations and their excellent accounting records show this fascinating tale of Indian Textiles exports to not just the East Indies [ Indonesia & Malaya] but the western Europe and the Americas . The records of the Dutch & East India Companies show that the textile trade was a story of an exponential / explosive growth.

1580 - Mughal Emperor Akbar fertilizes Indian Textiles with an infusion of Persian carpet weavers for production of Persian Carpets to his palace at Agra . India has been weaving and dyeing cotton and silk cloth of the most exotic sort since 3000 BC.at MohenjoDaro & Harappa.

1600: A Royal Charter forms the East India Company in London.[ fore-runner of today's Multi-National Corporation.]

1610, European-and Asian-owned ships carried freight of about ten million yards of cloth to Southeast Asia and the Middle East, plus a few yards of samples to Europe.

1613-14: British East India Company gets permission from the Mughal Emperor, Jahangir, to establish its factory in Surat, western India . This was followed by factories in Madras (Chennai), Bombay (Mumbai) and other locations. In Bengal, the Company established factories at Hooghly, Cassim Bazar and English Bazar. In 1658 all the Company settlements in India were brought under Fort St George, Madras .

1615-18: Mughals grant Britain right to trade and establish factories in exchange for English navy's protection of the Mughal Empire, which faces Portuguese sea power

1620 - 50,000 pieces of painted and printed chintz were brought into Britain .

1625 - the within-Asia Textile trade volume of these two companies doubled.

1650 - the Asian trade had begun to level off at 25-30 million yards, but several million now went to Europe and Africa. A trickle was even reaching the new colonies in North America - one of the first Americans to own an Indian textile was the accused witch, Anne Hibben, who in 1636 was said to have a number of items made of imported calico in her Boston home.

1665 - 1670 - European imports crossed the ten million mark and continued to rise sharply, reaching a yearly average of between 35 and 40 million yards by the early 1680s.

1684 - the English East India Company alone imported 45 million yards of Indian cloth -- more than six yards for each man, woman, and child in Great Britain. Additional exports to Dutch colonies, Europe, and Arab countries together with exports to Britain totalled more than 100 million yards.

1690- Complete ban on the use or wearing of all printed cotton / calicoes in France .

1699 - London's silk weavers riot & storm East India House in protest of cheap imports from India .

1700- Complete ban on the use or wearing of all printed calicoes in England . Holland fails to pass the required legislation against Indian Textiles.

1750 - Indian textiles are 60 % of the total value of the East India Company sales in London . A typical eighteenth-century order, to Bengal for the season 1730-31, called for 589,000 pieces of 38 different types of fabric, further divided into 98 varieties.

1750 - Indian textile industry dominated the world and was virtually clothing the world. From 1600-1800 India became the greatest exporter of textiles the world has ever known.

1757, the East India Company troops defeated Siraj-ud Daulah in the Battle of Plassey, which is said to have lasted only a few hours. From being traders, the Company turned kingmakers in Bengal.

Milestones in Textile Industrialisation:

1733 - John Kay perfects the flying shuttle.

1765: James Hargreaves invents the Spinning Jenny. Until this time, spinning has been a cottage industry. Automation results in one man operating 16 spindles.

1774- Beginning of the Industrial age -- Boulton and Watt engines replace uneconomic Newcomen's [original designer] designed steam engines.

1793- Eli Whitney invents the automated cotton GIN [short for engine].

1800- In the late 18th century, height of Indian Textile exports to U.K, £650,000 worth of Dacca cloth passed through customs in one year.

1830- George Stephenson's Rocket Steam Locomotive starts Liverpool-Manchester Railway. Cotton industry now employs 800,000 people. Sales of cotton and cotton goods now account for half of Britain 's exports.

Industrial Age & Britannia rules the waves and India as well. Manchester Textile mills ship 40 million yards of cotton cloth to India . This reverses the situation when India exported 45 million yards in 1680.

1851- At the Great Exhibition, Crystal Palace in London, one of the "woven winds" muslins from Dacca catches public eye. It was ten yards long, one yard wide, and weighed just over three ounces.

1868- German chemists Carl Graebe & Carl Liebermann, synthesize alizarin or madder [ red] .

1882- Committee formed to survey route for a ship canal between Manchester and the Mersey estuary. Thomas Edison installs power-producing dynamo at Holborn Viaduct Station, in London .

1884: Charles Parsons patents the steam turbine.

1924- Sakichi Toyoda (1867-1930), founder of TOYOTA INDUSTRIES CORPORATION invents the Toyota Type G Automatic Loom with Non-stop Shuttle Change.

1930- Mahatma Gandhi - starts "Swadeshi" movement with the manual spinning wheel- the Charkha . Start of the boycott of British Goods. Manchester & Lancashire prosperity takes a dive which has only recently been resuscitatedGlobal Picture 2004- Cotton Textile & Apparel Markets

China produces 17 million and the USA 16 million bales of cotton. A bale of cotton weighs 227kg.

USA - After a marked slow down from 2000-2002, US domestic clothing sales picked up in mid-2003. Textile exports rose 2.9% in January-July 2003 but clothing fell 6.2%. US imports surged, especially from China and Vietnam . By August 2003 textile output was down 9.8% and clothing 13.3%. Several big players filed for bankruptcy in the U.S.

South America- In Brazil output was boosted by recovery in the Argentinean market. Argentinean clothing exports also bounced back while Colombia benefited from special US access under ATPDEA. But Mexico struggled as competition rose from Asian and CBI suppliers.

The EU textile and clothing deficit fell in 2002 for the first time in six years as the textile surplus rose by 14% and clothing import growth slowed markedly-despite a 17% surge in imports from Turkey. But textile output fell by 5.2% and clothing output by 12.1%.

Eastern Europe - EU membership and the end of quota protection in 2005 will result in increased production costs in many countries. Cheap Asian imports will grow. Russian output is set to expand significantly under the country's light industry development plan.

South Africa - The stronger rand has made producers less competitive.
But trade agreements with the EU and other countries in the region have opened up export markets and boosted production.

Japan - Industry shrank in the first half of 2003 as domestic demand remained weak and exports of most items fell in volume, although values picked up.

China - Export growth remained strong but price falls reduced profit margins. Output rose in all the main sectors, leading to pressure on raw material supplies. In Hong Kong only re-exports were strong. Local firms are pinning their hopes on the Closer Economic Partnership Agreement (CEPA) with China .

Far East- In South Korea falling exports and domestic demand affected output. Exports fell in Taiwan . In Thailand output increased due to rising exports, especially to China . Indonesia was down due to rise in costs and in the rupiah exchange rate. Malaysian clothing did well and Vietnamese exports to the USA soared.

South Asia:

India's export recovery failed to raise output but Pakistan 's exports of cotton fabric, towels and garments have soared as a result of trade concessions, due to the Frontline status of war on terror. Pakistan 's plan to start new "garment cities" will focus on higher value clothing. In SriLanka fast export growth boosted output but sales to the USA and EU were weak. Slow growth in EU and US markets also hit exports from Bangladesh .

WTO 2005 - Impact on South Asian Textiles

Post WTO - 2005 - McKinsey-DHL- Report Summary

In the years 2005 and beyond, India could be the next big winner after China in the post quota period to the detriment of other Asian suppliers, says a report commissioned by DHL and authored by Mc Kinsey. The following are the report recommendations of areas that need to be improved: [the report interviewed 40 DHL customers].

According to the DHL-McKinsey Apparel and Textile Trade Report, the value of the global textile and apparel industry will most probably go up to $248 billion by 2008, with China, India and Pakistan expected to be the "clear winners". The report forecasts that India has the potential to increase her share from the current 4 per cent to 6.5 per cent valued at $16 billion by 2008. Pakistan can grow from $ 5 billion to about $ 10 billion by 2008.

The report noted that by 2013, exports from India could grow 15 per cent to 18 per cent annually amounting to over $30 billion, provided reforms are implemented.

Report Caveat :- the window of opportunity is small [ 1 year ] . Existing export growth is going to be only 8 per cent per year if required reforms are not implemented.

Post WTO- Reforms needed for India & Pakistan :

1. De-Regulate & Improve Logistics. India's market share will depend on the way the United States and the European Union impose specific textile safeguards in order to limit the surge in shipments from China , the "white paper" explains.

Scenario 1. Taking shares to declining Asian suppliers.

US and EU would not try curbing apparel imports from the PRC and China would take a 50% share of global market by 2008.In the four coming years, China's apparel exports would therefore rise 16.6% per year to US$124 billion.

Scenario 2 .

Brussels and Washington would re-impose quotas on a series of apparel categories from China whose apparel exports would "only" increase by 7.3% per year to US$64 billion in 2008. The rest of Asian countries would be the first victim of quotas' removal and China 's consecutive expansion.

Falling Exports: Hong Kong, Korea, Indonesia, Thailand, the Philippines and Taiwan .

Unchanged Exports : Low-cost countries notably Vietnam, Bangladesh and Sri Lanka .

Rising Exports: China, Pakistan and India would gain from quotas' elimination, with India 's exports growing by 8 to 10% per year to US$12 to 16 billion by 2008 while Pakistani sales would be up 6% per year to about US$4 billion in the fourth year of the post-quota era.

2. Improve productivity

The rise in India 's exports will actually depend on a series of domestic improvements, from deregulation in labour laws to investment in updated equipment, Mc Kinsey says.

India already enjoys low labour costs, wide availability of textile materials and large market shares in specific categories. Indian plants suffer from very low productivity, however, compared with the United States and China .

"Productivity of Indian exporters is 35% of US levels, compared with Chinese exporters that operate at 55%," according to another study by Mc Kinsey about men's shirt producing plants.

"The overall productivity of the Indian and Pakistan industry, including tailors and domestic manufacturers, is only 16% of the US ," the report adds.

Regarding production of men's shirts, for instance, India should improve workflow, invest in better technology, reduce faults in fabrics, expand the size of factories and more importantly shift from tailors to manufacturers.

3. Reduce delivery delays:

India also suffers from an absenteeism rate of 13% versus 5% for the rest of Asia. "Rejection levels are 3.3% versus 1.8% for rest of Asia, and delayed shipments are 19% versus 9% for rest of Asia." Reducing lead times should be a major priority since US brands and retailers such as Gap and Nike intend limiting their apparel product development lifecycle from 12 down to only 9 months. Domestic environment of Indian companies should also be improved. Import tariffs and other barriers should be reduced while new laws should allow women working during the night, according to the report. So-called "de-reservation" of Indian industry should be extended to hosiery and knit fabric manufacturers, allowing large units to develop their activities. The Infrastructure should also be improved, Mc Kinsey said.

4. Critical Success Factors identified in the report include:

Increase Textile Industry incentives Create level domestic market playing fields by extending de-reservation, uniform application of excise taxes; reduction in import duties on apparel, textiles and machinery

Revise labour laws [flexible exit policy], improving infrastructure [that is, reduce power outages and port delays]; improve availability of high quality textile technologies in order to increase FDI [foreign direct investment].

Establish bilateral agreements with US and EU under the quota free regime, to be competitive against other low cost exporters [ Sri Lanka, Bangladesh, Vietnam ]

Improve Training for workers via Educational Institutes for Improved Training skilled operators on textile engineering techniques.

Adopt US & EU Textile Compliance Standards