The 3rd largest producer of Cotton India also is a major producer and exporter of Cotton Yarn. The projection for the year 2007 for the cotton yarn touch 25.87 lacs tonnes. Against these the estimate for Chinese Cotton Yarn production for the year 2007 are 132.61 lacs tonnes which is roughly half the production of the Cotton Yarn in the entire World. This makes India one of the major producers of the Cotton Textiles Denims included. The Indian Denim manufacturing capacity which stood at around 350 million meters per annum before two years has jumped to around 500 millions meters per annum today. If we consider the global Denim market to be around 5 billion meters per annum with the total annual capacity of around 500 million meters production of Denims, India produces approximately 10 per cent of the global market share. The major competitors in this game are China, Pakistan, Turkey and Brazil. Like India all these countries grow their own cotton and are globally competitive.

If we look at the Indian Denim Industry two major factors seem to be affecting it. The first is that Indian Denim market size which is estimated to be around 200 to 225 MMA and is growing at around 10 per cent every year. The second is the foreign buyers prefer to buy ready garments rather then the cloths as its suits their supply chain management and costs. The first factor considered with the present manufacturing capacity of Denims of around 500 MMA has resulted into a short term glut in the Indian Market with some of the Denim manufacturers resorting to cutting the final cost to their buyers. Sometimes back during early September this year one of the industry groups took the initiative to arrange a meeting of Denim manufacturers at Mumbai in this context and they reportedly took a decision to come up as a cartel and face the declining realizations by deciding to up the Denim prices by at least Rs. 4 per sq. meter. However one of the leading groups commenting on this said they are not going to resort to this kind of a cartled price hike. In his exclusive interview with this magazine yet another industry leader observed Each manufacturer has his own strategy to increase sales and improve profit. I would not like to comment on any particular company's strategy.

The solution however in the long term seems to be emerging is by way of promoting Denim clothing's under a brand name and aggressively going for promoting the brand. Most of the Denim manufacturers are either resorting to the clothings and apparel line development or manufacturing some specialty Denim cloths. Some are doing both. It is interesting in this situation to find the news taking the rounds of the market that there is a major retail group Reliance Retail which plans Jeans at Rs. 199 and has already started talking to the largest textile mill and a Denim manufacturer Arvind Mills in this regard. This is said to be a move emulating one of the Wal-Mart's most discussed products obviously for its low price. This product is its 10 dollars Jeans. If the Indian Wal-Mart dreamer Reliance Retail succeeds in its plans there would be a product at half the price a 5 dollar Jean ! The retailer does not want to make money out of this product but wants to use it as a loss leader making the pig gy back ride available ! It would be interesting to see how far this experiment succeeds or if at all it becomes a reality.

It should also be interesting to note that within the country itself the trend is going to change significantly. As predicted by one of the leading consulting firms Cygnus there is going to be a tremendous growth in the branded segment. As per there estimates the market segment which was for 21 per cent Branded Textiles, 29 per cent Tailor Made and 50 per cent Unbranded Textiles in 2003 changed to 27 per cent Branded, 25 per cent Tailor Made and 48 per cent Unbranded. It is now predicted that by 2015 67 per cent of the market would belong to Branded Textiles, 26 per cent to Unbranded and a meager 7 per cent to the Tailor Made. Going by this predictions Denim manufacturers would be better advised to further go for Branded Textiles converting their cloth into a Branded Apparel product. Most of the major manufacturers in one or the other way have already started doing this.

Denims are a staple wear. Yet their major market is concentrated in USA and Europe. American and European markets today account for over 50 per cent of the world consumption. Obviously therefore they are saturated and are expected to grow at a comparatively flat rate of between 1 to 4 per cent over the coming years. As compared to this the Asian, Indian and Chinese markets are likely to grow aggressively at anything between 5 to 15 per cent per annum. This should mean that if the availability of cotton both in terms of quality and price favors them Indian Denim manufacturers need not worry about the current glut as this may turn out to be a short lived phenomenon. However the future would belong to those who concentrate on building brands and there by the brand loyalties.

I would like to conclude with an interesting observation from the United Nations' latest World Population Prospects report released during the second week of October 2006. As per this report India's population will overtake that of China before 2030, 5 years earlier then previously forecast ! The population report predicts that there will be 1,395 m people in India by 2025, and 1,593 m in 2050. Meanwhile, China's population will grow to 1,441 m by 2025, before slipping to 1,392 m in 2050.

Cheryl Sawyer, a UN demographer, said - We have been saying for a while that India would cross over China before 2050, but the crossover has been getting earlier and earlier and we now say it will happen before 2030 (not including Hong Kong). This is five years earlier than we said two years ago.

By 2050, the world's population will be 9.1 bn people, up from 6.5 bn today, with almost all the growth registered in developing countries.

The population of developed countries as a whole is expected to remain virtually unchanged between 2005 and 2050, at about 1.2 bn the report says. In contrast, the population of the 50 least developed countries is projected to more than double.There lies the hope for us. Increase population coupled with urbanization and a burgeoning middle class provides an ideal recipe for an accelerated demand.