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Textiles

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Textiles

May, 2012

Introduction

The Indian Textiles Industry plays an important role in the growth of the Indian economy. Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country.

Currently, it contributes about 14 per cent to industrial production, 4 per cent to the gross domestic product (GDP), and 17 per cent to the country's export earnings. It provides direct employment to over 35 million people. The sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.

The Indian textiles industry is extremely varied, with the hand-spun and handwoven sector at one end of the spectrum, and the capital intensive, sophisticated mill sector at the other. The decentralised powerlooms/hosiery and knitting sector form the largest section of the textiles sector. The close linkage of the industry to agriculture and the ancient culture, and traditions of the country make the Indian textiles sector unique in comparison with the textiles industries of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country.

The Indian textile industry can be divided into following segments:

  • Cotton Textiles
  • Silk Textiles
  • Woolen Textiles
  • Readymade Garments
  • Hand-crafted Textiles
  • Jute and Coir

Market Size

India earns about 27 per cent of its total foreign exchange through textile exports. The textile industry contributes nearly 14 per cent of the total industrial production of the country. Fabric production rose to 60,996 million sq meters in FY 2011 from 52,665 million sq meters in FY 2007.

Production of raw cotton grew to 32.5 million bales in FY11 from 28 million bales in FY07, while production of man-made fibre rose to 1,281 million kgs in FY11 from 1,139 million kgs in FY07. Production of yarn grew to 6,233 million kgs in FY11 from 5,183 million kgs in FY07.

India has the potential to increase its textile and apparel share in the world trade from the current level of 4.5 per cent to 8 per cent and reach US$ 80 billion by 2020.

Exports of textile grew to US$ 26.8 billion in FY10 from US$ 17.6 billion in FY06. India's textile trade is dominated by exports with a CAGR of 6.3 per cent during the same period.

Investments

The Textile sector grew at 3-4 per cent during the last six decades. As per the Eleventh Five Year Plan, it was projected to fast-track to a growth rate of 16 per cent in value and is further expected to reach US$ 115 billion (exports US$ 55 billion and domestic market US$ 60 billion) by 2012.

India is one of the few countries which has a presence across the entire value chain of the textile and apparel industry.

Foreign direct investment (FDI) inflows in textiles (including dyed, printed) from April 2000 to January 2012 stood at Rs 5,036.27 crore (US$ 897.79 million).