India has a diverse and rich textile tradition. Contemporary Indian textiles not only reflect the country's rich and splendid past, but also cater to the demands of the modern day. In fact, today India is one of the world's leading manufacturers of man-made textiles.
Indian textile industry largely depends on textile manufacturing and export. It also plays a major role in the economy of the country. India earns about 27 per cent of its total foreign exchange through textile exports. Further, 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. The sector is the second largest provider of employment after agriculture. It not only generates jobs in its own industry, but also opens up scopes for other ancillary sectors. The industry currently generates employment to more than 35 million people.
The Indian textile industry can be divided into following segments:
The fibre and yarn produced in India is comparable to the best in the world. Indian fabrics are known for their excellent workmanship, colours and durability. Due to heavy investments in world-class manufacturing plants, continuous innovation, new product mix, and strategic market expansion, Indian man-made fibres (MMF) are all set to take centre stage in the global arena.
A long and abiding tradition in the production and export of textile items has earned India an invaluable image in the international market. Perhaps, the most significant change in the industry has been the advent of MMF textiles that have changed the face of the textile industry in India. The country has successfully placed its innovative range of MMF textiles in almost all the countries across the globe.
Polyester is the largest segment of the Indian MMF and rayon textile industry. Exports of Indian MMF textiles scaled an all-time high of US$ 5,699 million in 2011-12, as compared to US$ 5,013 million in 2010-11, registering a year-on-year growth of 14 per cent. In 2011-12, fabrics were the largest product category accounting for 41 per cent of total exports. During 2011-12, the Middle East was the largest market and accounted for nearly 25 per cent of textile exports from India, while Asia accounted for 23 per cent.
In June 2012, the production of MMF has registered a growth of 18 per cent, cotton yarn by 14 per cent and total cloth production saw an increase of five per cent.
The provisional export of handmade carpets, floor coverings and other Handicrafts product during July 2012 were Rs 1387.22 crore (US$ 249.07 million), registering an increase of 14.41 per cent as compared to Rs 993.3 crore (US$ 178.35 million) during the corresponding month in 2011.
The potential size of the Indian textile and apparel industry is expected to reach US$ 221 billion by 2021, according to Technopak's Textile and Apparel Compendium 2012.
The textiles sector has witnessed a spurt in investment during the last five years. The main engine of investment has been the Technology Upgradation Fund Scheme (TUFS). The increased investment will help to upgrade technology, strengthen infrastructural facilities at potential textiles growth areas, increase the installation of additional spindles and looms. Besides, it will provide a fillip to the garment, technical textiles and processing segments of textiles industry, which have great potential for value addition and employment generation.
The industry attracted foreign direct investments (FDI) worth Rs 61.36 crore (US$ 11.02 million) in the month of May 2012 as compared to Rs 24.75 crore (US$ 4.44 million) during the corresponding month in 2011.
The Indian textile industry saw three mergers and acquisitions (M&A) deals worth US$ 455 million in the month of July 2012.
Some of the major investments in Indian Textile Industry are: