Textiles
The Indian Textile Industry counts among the leading textile industries in the world.

Textile Industry in India

Latest update: June, 2014

Production of raw cotton in India

Production of raw cotton grew to 33.4 million bales in FY13, up from about 28 million bales in FY07.

Production of raw cotton in India

India’s textile exports

Readymade garments was the largest contributor to total textile and apparel exports from India in FY12P; the segment had a share of 39 per cent.

India’s textile exports

India's textile market size

The size of India’s textile market is expected to expand at a CAGR of 10.1 per cent over 2009–21.

India's textile market size

India’s textile and apparel sector

In 2012, apparel had a share of 69 per cent of the overall market; textiles contributed the remaining 31 per cent.

India’s textile and apparel sector

Updated: June, 2014

SECTORAL REPORT | April, 2014

Introduction

India is the one of the world's largest producers of textiles and garments. Abundant availability of raw materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. It is the world's second largest producer of textiles and garments. The Indian textiles industry accounts for about 24 per cent of the world’s spindle capacity and 8 per cent of global rotor capacity. The potential size of the Indian textiles and apparel industry is expected to reach US$ 223 billion by 2021, according to a report by Technopak Advisors.

The textiles industry has made a major contribution to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings. The sector contributes about 14 per cent to industrial production, 4 per cent to the gross domestic product (GDP), and 27 per cent to the country's foreign exchange inflows. It provides direct employment to over 45 million people. The textiles 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 India’s economy.

Market Size

The Indian textiles industry is set for strong growth, buoyed by strong domestic consumption as well as export demand.

The most significant change in the Indian textiles industry has been the advent of man-made fibres (MMF). India has successfully placed its innovative range of MMF textiles in almost all the countries across the globe. MMF production recorded an increase of 10 per cent and filament yarn production grew by 6 per cent in the month of February 2014. MMF production increased by about 4 per cent during the period April 2013–February 2014.

Cotton yarn production increased by about 10 per cent during February 2014 and by about 10 per cent during April 2013–February 2014. Blended and 100 per cent non-cotton yarn production increased by 6 per cent during February 2014 and by 8 per cent during the period April 2013–February 2014.

Cloth production by mill sector registered a growth of 9 per cent in the month of February 2014 and of 6 per cent during April 2013–February 2014.

Cloth production by power loom and hosiery increased by 2 per cent and 9 per cent, respectively, during February 2014. The total cloth production grew by 4 per cent during February 2014 and by 3 per cent during the period April 2013–February 2014.

Textiles exports stood at US$ 28.53 billion during April 2013–January 2014 as compared to US$ 24.90 billion during the corresponding period of the previous year, registering a growth of 14.58 per cent. Garment exports from India is expected to touch US$ 60 billion over the next three years, with the help of government support, said Dr A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC).

Investments

The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted foreign direct investment (FDI) worth Rs 6,710.94crore (US$ 1.11 billion) during April 2000 to February 2014.

Some of the major investments in the Indian textiles industry are as follows:

  • Private Equity (PE) firm Everstone plans to invest Rs 100 crore (US$ 16.62 million) for an undisclosed minority stake in the fashion label of designer Ritu Kumar.
  • Raymond’s ‘Complete Man’ plans to enter the developed markets in the US, Europe and East Asia as the textile company seeks to expand the network of its Made to Measure (MTM) stores. With plans to invest around Rs 200 crore (US$ 33.24 million), the company is looking for partners to help it grow its overseas business.
  • Arvind Ltd has picked up the 49 per cent stake held by the Murjani Group in Calvin Klein in India. With this, Arvind and PVH Corp are expected to drive Calvin Klein's business in the country.
  • Suraaj Linens, India’s leading manufacturer of Home Textiles articles, has launched a new line of modern home textiles that reflect trendsetting patterns, fabrics and styles.
  • American apparel-maker, Tommy Hilfiger plans to add 500 stores in India over the next five years as part of their expansion spree. Currently, Tommy Hilfiger operates 58 franchisee outlets and over 60 shop-in-shops in other department stores.

Government Initiatives

The Government of India has promoted a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under automatic route.

Some of initiatives taken by the government to further promote the industry are as under:

  • The government has taken a lot of initiatives for the welfare and development of the weavers and the handloom sector. Under revival, reform and restructuring (RRR) package, financial assistance to the tune of Rs 1,019 crore (US$ 169.66 million) has been approved and the Indian government has released Rs 741 crore (US$ 123.42 million).
  • Encouraged by turnaround in textiles exports, the Government of India plans to set up a US$ 60 billion target for the current financial year, a jump of over 30 per cent from the previous financial year.
  • The Cabinet Committee on Economic Affairs (CCEA) has approved an Integrated Processing Development Scheme (IPDS) with a corpus of Rs 500 crore (US$ 83.28 million) to make textiles processing units more environment-friendly and globally competitive.
  • The Government of India plans to set up a Rs 100 crore (US$ 16.62 million) venture capital fund to provide equity support to start-ups in the textiles sector, in order to encourage innovative ideas in this export intensive sector.
  • The Government of India has allotted Rs 700 crore (US$ 116.60 million) in the 12th Five Year Plan for the development of technical textiles. In 2012–13, the technical textiles industry reached Rs 7.48 trillion (US$ 124.60 billion) at an annual growth rate of 3.5 per cent.

Road Ahead

The Indian textiles industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. The industry is expected to reach US$ 220 billion by 2020, according to estimates by Alok Industries Ltd.

The Central Silk Board sets targets for raw silk production and encourages farmers and private players to grow silk. To achieve these targets, alliances with the private sector, especially major agro-based industries in pre-cocoon and post-cocoon segments have been encouraged.

For the textiles industry, the proposed hike in FDI limit in multi-brand retail will bring in more players, thereby providing more options to consumers. It will also bring in greater investments along the entire value chain – from agricultural production to final manufactured goods.

With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with several international players such as Marks & Spencer, Guess and Next having entered the Indian market. The organised apparel segment is expected to grow at a compound annual growth rate (CAGR) of more than 13 per cent over a 10-year period.

Exchange Rate Used: INR 1 = US$ 0.01665 as on May 3, 2014

References: Ministry of Textiles, Indian Textile Journal, Department of Industrial Policy and Promotion, Press Information Bureau

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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