Textile Industry in India: Moving Ahead with Huge Opportunities

Textile Industry

India has emerged as the second largest exporter of textile and apparel in the world, comprising 5% of the total global textile trade. It is expected to grow at a larger rate in the upcoming years. Asian countries have dominated the industry of textiles and apparels, with China comprising 37%, India is a distant second with 5%. Due to the increasing cost pressures and domestic demand in China, its export growth is expected to get low. This gives India a good market opportunity in the future.

Textile and apparel exports from India is expected to reach USD 80 Billion by the year 2020, whereas, the domestic market is expected to reach USD 120 Billion by the year 2020. This is because of the large-scale production of textile materials in the nation.

India is positioned as-

2nd Largest producer of raw cotton,

2nd Largest producer of cotton yarn,

2nd Largest producer of cellulosic fibre/yarn,

2nd Largest producer of silk,

4th Largest producer of synthetic fibre/yarn,

And, The Largest Producer of Jute.

Apart from these large-scale production of textile materials, India has the highest loom capacity (including handlooms) with 63% of the total world’s market share.

Apparel constitutes about 40% of India’s total textile exports, followed by yarn at 18%. Menswear accounts for 25% of the readymade apparel market followed by women’s wear at 48% and children’s wear at 17%. Approximately 20% of the apparel produced in India comprises of branded readymade garments. Such brands are more prominent in menswear garments like shirts, trousers and jackets.

The Indian market for readymade woven garments have seen exponential growth in recent times. On the other hand, the market for knit garments have also expanded due to the improvement in quality and a change in product mix. Cotton is the primary material in women’s blouses and petticoats, while polyester-cotton blends are dominating the whole textile goods production.

The growth in the domestic consumption of yarn and fabrics reflects the consumer preferences for man-made fibre textiles and blended products. Fabrics of polyester or polyester blended with cotton or wool have become the most used fabrics for apparels production. That is because of changing lifestyles of consumers and price considerations.

Finished fabrics (printed, dyed & yarn-dyed) are also in huge demand. It comprises one-fourth of the total volume of India’s fabric consumption. Finished fabrics are generally purchased as piece lengths and custom-tailored as dresses, shirts, jackets and trousers. The rest of the fabric consumption comprises of traditional Indian garments like dhotis and sarees.

Government Support

The Government of India has recognised the textile industry as one of the important industrial pillar for the nation’s economic growth. It has taken significant measures and initiatives to regulate and boost the textile sector. Government has allowed 100 % FDI to upscale the industrial output.

Apart from FDI, Indian Government has launched the following initiatives to facilitate ease of doing business as well as to boost the overall growth in the textile sector-

  1. Scheme for Integrated Textile Parks (SITP)

SITP is a significant initiative scheme to provide funding to the textile industries for infrastructure, warehouse, plants, factories and machineries. Investments are around USD 692 million and it is expected to create more than 66,000 jobs.

  1. Integrated Processing Development Scheme (IDPS)

IDPS is a scheme by the Indian Government which is under implementation with a mission to facilitate competitive vibrancy in the textile sector by promoting eco-friendly measures in manufacturing and processing operations.

  1. Amended Technology Upgradation Fund Scheme for Textiles Industry (ATUFS)

ATUFS is the amended phase of Indian Government’s Technology Upgradation Fund Scheme (TUFS) which focuses to provide funding to businesses to upgrade their technologies. Investments are around USD 15 million and 3 million jobs are expected to be generated.

  1. Integrated Skill Development Scheme (ISDS)

Inspired by the ‘Skill India’ initiative, ISDS focuses to upscale the skill of workers under textile sector by providing training and education to more than 1.5 million people. Government has invested USD 300 million for ISDS in textile sector.

  1. Market Access Initiatives (MAI) & Market Development Assistance (MDA)

MAI is a significant initiative by the government to promote export trade of textile products and materials providing access in the international market with assistance and proper guidance. Another scheme is the MDA which plans to encourage exporters to promote their products.

  1. Technology Mission for Technical Textiles (TMTT)

TMTT is one of the most important scheme for the textile industry by Indian Government. It focuses to create a favourable business environment for the textile production in the nation. It includes two Mini Missions. Mini Mission I aim to standardise the overall mechanism by improving the infrastructure, testing facilities, resource centres, R&D and IT.

On the other hand, Mini Mission II aim to support the textile businesses in domestic and export markets for technical textile production. TMTT is considered as the most effective scheme taken by the government to boost the textile production in India.

  1. Special Package for Textile & Apparel Sector

The Government of India has provided a special package to the textile and apparel sector in the union budget 2017-18. It aims to boost exports, policies in favour of labour, upscaling the production, etc. In the coming next three years, this special package is expected to generate around 10 million jobs.

  1. GST Implication in Textile & Apparel Sector

Goods and Services Tax will subsume several different taxations and levies under the textile and apparel sector facilitating ease of doing business and regional tax parity. According to the Ministry of Textiles, GST will bring a ‘fibre-neutrality effect’ which means that all kind of man-made or natural fibres will be equally treated throughout the country in terms of taxation.

The Road Ahead

India’s textile and apparel industry is expanding with a burgeoning growth due to the abundance of textile materials and diversified production of textile goods. Apart from its export trade, the domestic demand of textiles and apparels have boosted the production rate. The scope for business opportunities in Indian textile and apparel industry is very high as it is going to dominate the global textile market in future.

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