India is the world’s second-largest producer of textiles and clothing. It is also the fifth largest exporter of textiles including apparel, home, and technical products. The core strength of the Textile industry in India is its strong manufacturing base of a wide range of fibers/yarns from natural fibers such as cotton, jute, silk, and wool to synthetic/man-made fibers such as polyester, viscose, nylon, and acrylic.

The textile and clothing industry contributes 2.3% to the country’s GDP, 13% to industrial production, and 12% to exports. Around 45 million people work in the Textile Industry, including 3.5 million people who work on handlooms. The Indian Textile and apparel industry is expected to grow at a CAGR of 10% during 2019-2020 and reach USD 190 billion by 2025-26. India’s apparel market was $40 billion in 2020 and is expected to reach $135 billion by 2025.

India has a comparative advantage in terms of skilled labor and production costs compared to other major textile producers. India’s textile and apparel exports (including handicrafts) stood at $44.4 billion in FY22, up 41% year on year. Exports of readymade garments, including cotton accessories, stood at USD 6.19 billion in FY22.

The textile industry (including dyed and printed) attracted USD 3.99 billion in foreign direct investment (FDI) from April 2000 to March 2022. 100% FDI (automatic route) is allowed in the Indian textile sector.

Home textile companies are using technology to optimize the value chain. For example, in October 2021, Welspun India introduced Wel-Trak 2.0 – an improved, patented end-to-end traceability technology – to track textile raw materials throughout the supply chain.

Drivers of Indian Textile and Apparel Market:

• India is the largest producer of jute and cotton and the second largest producer of silk. Due to the abundance of raw materials, along with cheap labor costs, the cost of producing textiles and clothing is significantly lower than in many other competing countries.
• India currently has one of the largest youth populations in the world. Currently, approximately half of the total population is under the age of 25. This age group represents one of the largest consumer groups for textiles and apparel and is expected to drive spending over the next five years.
• Catalyzed by increasing internet penetration, online retail has seen strong growth in the country. Consumers are now looking for easy shopping, more options, better deals, and easy return policies. The growth of online sales has enabled the textile industry to reach consumers in every corner of the country.
• Due to changing shopping habits, consumers are now shifting from need-based clothing to aspiration-based clothing. Unlike previous years when Indian consumers bought fashion goods on demand, buying clothes has become more than a basic need; it is now a reflection of aspiration, personality, and a status symbol. Although basic textiles continue to form part of the consumer basket, demand for aspirational garments has grown significantly in recent years.

Production Linked Incentive (PLI) Scheme

The government’s Rs 10,683 crore ($1.44 billion) PLI program is expected to be a major boost to textile manufacturers. The scheme proposes incentives for MMF garments (man-made fiber), MMF fabrics, and 10 segments of technical textile products.

The government has approved the Mega Integrated Textile Region and Apparel (MITRA) Park scheme worth Rs. 4,445 million dollars (US$594.26 million) to build seven integrated mega textile parks with state-of-the-art infrastructure, shared services, and research and development laboratory over a three-year period, which will boost textile manufacturing in the country.

Regarding the export of handloom products worldwide, the Handloom Export Promotion Council (HEPC) participates in various international fairs/events with handloom exporters/weavers to sell their handloom products in international markets under the National Development Program manual status (NHDP). The Ministry of Textiles is also introducing Handloom Marketing Assistance (HMA), a part of the National Handloom Development Program (NHDP) across India. HMA provides a marketing platform for handloom weavers/agencies to sell their products directly to consumers and develop and promote the marketing channel by organizing exhibitions/events in both domestic and export markets.

The government has allocated funds worth Rs. 17,822 crores ($2.38 billion) between FY16-22 on the ‘Amended Technology Up-gradation Fund Scheme’ (A-TUFS) to support the Indian textile industry and ease of doing business.

To support weavers/loom entrepreneurs, Weaver MUDRA Scheme has been launched to provide financial assistance of 20% of the loan amount subject to a maximum amount of Rs. 10,000 ($134.22) per loom. The loan is provided at an interest rate of 6% with a credit guarantee for three years.

New economic cooperation and trade agreements with Australia and the United Arab Emirates will open many opportunities for textile and handloom. Indian textile exports to Australia and UAE will now face zero duty and the government expects that soon Europe, Canada, UK, and GCC countries would also welcome Indian textile exports with zero duty.

The best players in the textile sector achieve the sustainability of their products by producing textiles that use natural recyclable materials. The best players in the textile sector achieve the sustainability of their products by producing textiles that use natural recyclable materials.

– Amrin Ahmed

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