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.
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: