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November, 2012


The Indian textile industry is one of the major sectors of Indian economy largely contributing towards the growth of the country’s industrial sector. The textile sector contributes 14 per cent to industrial production, 4 per cent to National GDP, and 10.63 per cent to country’s export earnings. Textile sector in India provides direct employment to over 35 million people and holds the second position after the agriculture sector in providing employment.

Growing at a rapid pace, the Indian Market is being flocked by foreign investors exploring investment purposes and with an increasing trend in the demand for textile products in the country, a number of new companies and joint ventures are being set up in the country to capture new opportunities in the market.

Market Size

The most significant change in the Indian textile industry has been the advent of man-made fibres (MMF). 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$ 252.31 million), registering an increase of 14.41 per cent as compared to Rs 993.3 crore (US$ 180.67 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 industry attracted foreign direct investments (FDI) worth Rs 61.36 crore (US$ 11.17 million) in the month of May 2012 as compared to Rs 24.75 crore (US$ 4.50 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:

  • 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$ 109.97 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
  • 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 franchise outlets and over 60 shop-in-shops in other department stores
  • Italian luxury apparel maker, Canclini Tessile is tying 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
  • Trident Group has announced setting up an integrated textile complex and expanding its yarn facilities at Budni, Madhya Pradesh (MP). This will involve an investment of Rs 3,600 crore (US$ 653.98 million) and the new facilities will be involved in the manufacturing of terry towels, sheeting, value-added yarns and captive power plant
  • Italian luxury major Canali has entered into a 51:49 joint venture (JV) with Genesis Luxury Fashion, which currently has distribution rights of Canali-branded products in India. Canali also plans to invest Rs 7.65 crore (US$ 1.39 million) in India. The JV company will now sell Canali branded products in India exclusively