Textile Industry in India
- November 30, -0001
Introduction
The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a vital role through its contribution to industrial output, employment generation, and the export earnings of the country.
The sector contributes about 14 per cent to industrial production, 4 per cent to the gross domestic product (GDP), and 11 per cent to the country’s export earnings. It 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.
Market Size
The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. Abundant availability of raw materials such as cotton, wool, silk and jute and skilled workforce has made India a sourcing hub.
The most significant change in the Indian textile 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 increased by 9 per cent during June 2013. The production increased by about 3 per cent during the year April-June 2013.
Cotton yarn production increased by 8 per cent during June13 and by 10 per cent during April- June 2013. Blended and 100 per cent non-cotton yarn production increased by 5 per cent during June 2013 and increased by 8 per cent during the year April- June 2013.
Cloth production by handloom, and hosiery increased by 3 per cent and 12 per cent respectively during June 2013 .Production by handloom, and hosiery sectors increased by 5 per cent and 12 per cent during April-June 2013. The total cloth production increased by about 1 per cent during June 2013 and by 2 per cent during Apr-June 2013.
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.
Investments
The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted foreign direct investments (FDI) worth Rs 5,831.02 crore (US& 854.78 million) during April 2000 to May 2013.
Some of the major investments in Indian Textile Industry are:
- Superdry plans to open 20 stores in India over the next five years, as per Mr James Holder, Founder, Superdry
- The Aditya Birla Group has signed an in-principle agreement to buy the assets of Ontario-based Terrace Bay Pulp Mill for Rs 605 crore (US$ 88.70 million). The acquisition would be carried out through AV Terrace Bay (Canada), a special purpose vehicle (SPV) in which two group companies, Grasim Industries and Thailand-based Thai Rayon Public, would hold stake
- Tommy Hilfiger plans to add 500 stores in India over the next five years as part of their expansion spree
- Canclini Tessile plans to tie up with Tirupur-based Emperor Textiles to stitch its shirts in India. The equal joint venture (JV) with Emperor Textiles will set up a separate manufacturing unit in Tirupur to manufacture Italian fabric for domestic consumption
Government Initiatives
The Government of India has promoted a number of export promotion policies for the Textile sector in the Union Budget 2011-12 and the Foreign Trade Policy 2009-14. It has also allowed 100 per cent FDI in textiles under the automatic route.
Due to policy measures initiated by the Government in the recent past, the Indian textiles industry is in a stronger position than it was in the last six decades. The industry which was growing at 3-4 percent during the last six decades has now accelerated to an annual growth rate of 8-9 per cent in value terms.
Some of initiatives taken by the Government to further promote the industry are as under:
- The Government of India and Government of Bangladesh plan to sign a memorandum of understanding (MoU) on cooperation in textiles and jute through exchanging technologies
- The Government has offered health insurance coverage and life insurance coverage to 161.10 million weavers and ancillary workers under the Handloom Weavers' Comprehensive Welfare Scheme, while 733,000 artisans were provided health coverage under the Rajiv Gandhi Shilpi Swasthya BimaYojna
- The Central Cottage Industries Corporation of India (CCIC), and the Handicrafts and Handlooms Export Corporation of India (HHEC) have developed a number of e-marketing platforms to simplify marketing issues. Also, a number of marketing initiatives have been taken up to promote niche handloom and handicraft products with the help of 600 events all over the country
- As per the 12th Five Year Plan, the Integrated Skill Development Scheme aims to train over 2.67 million people within the next 5 years. The scheme will cover all sub sectors of the textile sector such as textiles and apparel, handicrafts, handlooms, jute and sericulture
- As per the Credit Guarantee program, over 25,000 Artisan Credit Cards have been supplied to artisans, and 16.50 million additional applications for issuing up credit cards have been forwarded to banks for further consideration with regards to the Credit Linkage scheme
- The Government of India has announced a package of US$ 604.56 million to waive of overdue loans in the handloom sector
- The Indian Government has given approval to 40 new Textiles Parks to be set up and this would be executed over a period of 36 months. The new Textiles Parks would leverage employment to 400,000 textiles workers
Road Ahead
The textiles industry complements the growth of several industries and institutions such as the defence forces, railways, and government hospitals, which are the key institutional buyers of technical textiles. The market is expected to grow to US$ 31 billion by 2020, at a compound annual growth rate (CAGR) of 10 per cent. The industry includes production of flexible packaging material for industrial, agricultural and consumer goods. Among the other segments, protech, oekotech, spotech and geotech have significant growth potential. India’s technical textile industry is an emerging area for investments with good growth opportunities.
With the increase in investments in the Indian textile sector, the subsequent increase in the industrial production, and the positivity observed by the textile sector have resulted in progress and development of the sector. Integrating the sectoral needs with technical advancements will completely modernise the industry chains across the country, along with continued investments assisting in reaping benefits for the Indian textile sector.
Exchange Rate Used: INR 1 = US$ 0.0146 as on August 28, 2013
References: Ministry of Textiles, Indian Textile Journal, Department of Industrial Policy and Promotion, Press Information Bureau
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