Category: General
Country: India
Region: Asia Pacific
May 5, 2023, 4:29 PM IST
Raghav Mittal in Voices
Business, TOI.
The textile industry is one of the oldest and most prominent industries in India. It has a plethora of advantages, such as the ready availability of raw materials, a vast manufacturing base, a wide range of innovative products, and a burgeoning demand from both domestic and international consumers. India has already established itself as a market leader in several industry segments, such as silk, cotton, and jute production, further solidifying its position as a prominent player in the global textile arena. The industry has a rich history and has been a significant contributor to India’s economy for centuries. Over the years, the industry has grown and evolved, and today, it is one of the fastest-growing sectors in the country.
Growth Rate
With a robust market value of over US$ 100 billion, the Indian textile and apparel industry is a powerhouse, employing over 45 million people and making up 14% of the nation’s industrial output. According to the Confederation of Indian Industry (CII), the Indian textile industry is expected to hit US$ 250 billion production by FY25, rising at 12% CAGR between FY22-FY25. Exports are projected to reach US$ 185 billion by FY25, doubling India’s share of global textile trade to 10%. Growth would be driven by demographics, rising demand for lifestyle products, and the spread of e-retailing/organized retailing in smaller towns/rural areas. The industry growth will create jobs and generate value, attracting US$ 180 billion in investments.
The Global Leader
India has established itself as a global leader in producing several textile products, such as being the second-largest producer of silk, cotton, and Multimode Fibre (MMF). The country also holds the distinction of being the world leader in jute production, accounting for nearly 70% of global production. Moreover, India boasts the second largest vertically integrated production base after China, giving it a competitive edge with a strong manufacturing base across the value chain and a vast raw material base. The value chain encompasses weaving, spinning, garmenting, and processing, further strengthening its leadership position in the global textile industry.
The Growth Drivers
The Indian textile industry is highly competitive, with a vast network of small and large manufacturers, exporters, and traders. The sector has witnessed substantial growth in recent years, owing to favorable government policies and increasing demand for Indian textiles globally. The industry has also received a boost from the ‘Make in India,’ “Aatmanirbhar Bharat,” and Performance Linked Incentives (PLI) initiatives, which aim to promote domestic manufacturing and boost exports.
The industry’s growth can be attributed to several factors, including the availability of affordable labour, a large consumer base, favorable government policies, and very innovative entrepreneurs. Additionally, India’s skilled workforce and technological advancements have enabled the country to produce high-quality textiles that meet global standards.
India’s textile and garment exports have been growing at a steady pace, making it one of the leading textile exporters in the world. The industry exports a wide range of products, including cotton textiles, yarn, fabrics, and readymade garments. The United States, the United Arab Emirates, and the United Kingdom are the largest export destinations for Indian textiles.
The Indian government has taken several steps to support the textile industry’s growth and development. The government has implemented several schemes and initiatives, such as the Technology Upgradation Fund Scheme (TUFS), which provides financial assistance to textile units for the modernization and upgradation of technology. Additionally, the government has introduced schemes to promote the use of natural fibers such as cotton, silk, and wool, which has helped boost the demand for Indian textiles.
Dominance in Exports
According to Apparel Export Promotion Council (AEPC) during the period Apr-Mar 2021-22 apparel sector, with its share of approx. 4.4% of the total exports, was been able to make a decent contribution. Indian textiles and apparel exports are primarily focused on the USA, European Union, Asia, and the Middle East markets. For knitted garments, the USA has the largest share of 26.3%, followed by UAE at 14.5%, and the UK at 9.6%, according to AEPC. In FY22, the US was the top export destination with 27% of textile exports, followed by the EU at 18%, and Bangladesh at 12%.
Promoting ‘Brand India’
India boasts of an abundance of raw materials including cotton, jute, silk, and wool, which are the largest in the world. This is supported by the world’s second-largest spinning and weaving capacity, offering the industry an exceptional opportunity for a domestic value addition of up to 95%. India’s products are renowned for their sustainability and adherence to social and environmental compliances, in line with the import requirements of respective countries. The industry is committed to promoting the “Brand India” on multiple global platforms, highlighting its strengths in sustainability, circularity, ethical sourcing, and manufacturing, labour standards, and empowering women through employment. These efforts reflect the industry’s unwavering commitment to showcasing India’s potential to the world.
Over the years India has created a robust textile ecosystem from fiber to fashion including manufacturers, trims and accessories players, dyes and chemical units, machine manufacturers, tech startups, designers, buying agents, exporters, MSME units, brands, and fashion institutes from across the country all under one roof. On the other hand, the export opportunities have also been enhanced via the signing of various Free Trade Agreements with important trade partners for India including UAE, Australia, the UK, and others.
In a nutshell, the Indian textile industry is a crucial contributor to the country’s economy and has been growing rapidly in recent years. With favorable government policies, a skilled workforce, and technological advancements, the industry is poised for continued growth and success. The sector has the potential to create more employment opportunities and boost the country’s exports, making it a vital industry for India’s economic growth.
Raghav Mittal
MD & Creative Director, House of Surya
Courtesy: TOI
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