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Textiles

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Textiles

November, 2011

The textiles industry in India enjoys a distinctive position due to the pivotal role it plays by way of contribution to industrial output, employment generation (second largest after agriculture) and export earnings of the country. The industry is rich and varied, embracing the hand-spun and hand-woven sector at one end and the capital intensive, sophisticated mill sector at the other. Its association with the ancient culture and tradition of the country lends it a unique advantage in comparison with textiles industry of other countries, thus giving it an uncommon edge to cater to a vast variety of products and market segments both domestically, as well as, globally.

According to Mr Anand Sharma, Union Minister of Commerce, Industry & Textiles, “The Indian textile industry is a key pillar of Indian manufacturing, contributing to 14% of industrial production and over 10% of Indian exports. More significantly, the industry is the second largest employment generator next only to Agriculture engaging 35 million people across various segments in the entire value chain”.

The industry currently contributes about 14 per cent to industrial production, 4 per cent to GDP, and 17 per cent to the country’s export earnings, according to the Annual Report 2010-11 of the Ministry of Textiles. The industry accounts for nearly 12 per cent share of the country's total exports basket. It provides direct employment to more than 35 million people.

Industry sub-sectors

The textile industry comprises the following:

  • Organised Cotton/Man-Made Fibre Textiles Mill Industry
  • Man-Made Fibre / Filament Yarn Industry
  • Wool and Woollen Textiles Industry
  • Sericulture and Silk Textiles Industry
  • Handlooms, Handicrafts, the Jute and Jute Textiles Industry
  • Textiles Exports

Market size

The Vision Statement for the textiles industry for the 11th Five Year Plan (2007-12) sees India securing a 7 per cent share in the global textiles trade by 2012. At current prices, the Indian textiles industry is valued at US$ 55 billion, 64 per cent of which caters to domestic demand.

Total textile exports during April-March 2010-11 stood at US$ 12.5 billion as against US$ 11.3 billion during the corresponding period of the previous year, according to the latest data released by DGCI&S, Kolkata.

Technical Textile Segment

The technical textiles segment is expected to grow by 11 per cent per annum till 2012-13 and is likely to grow at 6-8 per cent per annum till 2020 without any policy interventions. If the government intervenes by way of regulatory push, the growth of technical textiles industry can be estimated at 12-15 per cent per annum till 2020, according to Rita Menon, Secretary, Union Ministry of Textiles. She added that the technical textiles segment in India has the potential to attract investment and create additional employment opportunities in coming years. She further said that investments of US$ 1.1 billion are expected by 2012 and employment is expected to increase to 1.2 million by 2012.

Government Initiatives

Government in the 11th Five Year Plan has restructured the Technology Upgradation Funds Scheme (TUFs), the Scheme for Integrated Textiles Park (SITP) and formulated the National Fiber Policy. Government has enhanced allocation under restructured TUFs from US$ 1.5 billion to US$ 3.0 billion to catalyze investments in hitherto low investment areas like processing, weaving, knitting, technical textiles and skill centres. Under the SITP scheme, US$ 78.5 million allocation was made for sanction of new Integrated Textiles Parks. The National Fiber Policy has been formulated as a fiber neutral policy in a decadal perspective to attract to US$ 33.3 billion of investment in the next decade.

The Scheme for Integrated Textile Park (SITP) - The scheme was approved in July 2005 to facilitate setting up of textiles parks with world class infrastructure facilities. Government has sanctioned 21 new Textiles Parks under the Scheme with a project cost of US$ 397.8 million to be implemented over a period of 36 months. Mr Anand Sharma, Commerce, Industry and Textiles Minister, said that new Textiles Parks would leverage an investment of over US$ 1.7 billion and provide employment to 4 lac textiles workers. Government would finance common infrastructure with a subsidy upto US$ 7.5 million per Textiles Park.

Integrated Skill Development Scheme - The Government launched the Integrated Skill Development Scheme for the T&C Sector, including Jute & Handicrafts, in September 2010. The main objective of the scheme is to address the trained manpower needs of textiles and related segments. The Scheme would target to train approximately 2,56,000 persons during 2010-11 and 2011-12.

Fiscal incentives are provided for exports of T&C items under various provisions of the Foreign Trade Policy 2009-14