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Last Updated: August 05, 2015
Patrice de Place
President, Artistic Committee, Mod’Art International, Paris
Latest update: September, 2015
•Readymade garments was the largest contributor to total textile and apparel exports from India in FY15
•The segment had a share of 40 per cent in overall textile exports
•Cotton and man-made textiles were also major contributors with shares of 31 per cent and 16 per cent, respectively
•Textile sector contributes 14 per cent to industrial production and 4 per cent to GDP
•With over 45 million people, the industry is one of the largest source of employment generation in the country
•The industry accounts for nearly 13 per cent of total exports
•The size of India’s textile market in 2014 was US$ 99 billion; the market is expected to expand at a CAGR of 9.6 per cent over 2014–23
Last Updated: September, 2015
SECTORAL REPORT | August, 2015
India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The industry realised export earnings worth US$ 41.4 billion in 2014-15, a growth of 5.4 per cent, as per The Cotton Textiles Export Promotion Council (Texprocil). The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.
The Indian textiles industry is extremely varied, with the hand-spun and handwoven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.
The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India’s gross domestic product (GDP), and 14 per cent to overall Index of Industrial Production (IIP).
The Indian textile industry has the potential to reach US$ 500 billion in size according to a study by Wazir Advisors and PCI Xylenes & Polyester. The growth implies domestic sales to rise to US$ 315 billion from currently US$ 68 billion. At the same time, exports are implied to increase to US$ 185 billion from approximately US$ 41 billion currently.
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 US$ 1,647.09 million during April 2000 to May 2015.
Some of the major investments in the Indian textiles industry are as follows:
The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route.
Some of initiatives taken by the government to further promote the industry are as under:
The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into 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$ 0.015 as on September 11, 2015
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.
The technical textile industry in india worth US$ 17 billion is expected to grow at a rate of 20 per cent annually to reach US$ 36 billion by 2016-17.
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