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 eight 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, four 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 India's economy.
India has overtaken Italy, Germany and Bangladesh to emerge as the world's second largest textile exporter, as per recent data released by 'UN Comtrade'. India's share in Global Textiles increased by 17.5 per cent in 2013 compared to 2012.
The Textiles Vision Document formulated by the National Manufacturing Competitiveness Council (NMCC) has projected that textiles exports from India will touch US$ 300 billion by the year 2024-25.
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 three per cent during the period April-July 2014.
Cotton yarn production increased by four per cent during April-July 2014. Blended and 100 per cent non-cotton yarn production increased by five per cent during April-July 2014.
Cloth production by mill sector registered a growth of six per cent during April 2013-July 2014.
Cloth production hosiery sector increased by eight per cent during April-July 2014. Total cloth production grew by two per cent during April-July 2014.
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$ 1,495.07 million during April 2000 to September 2014.
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 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.
With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with several international players like 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$ 0.016 as on November 27, 2014
References:Ministry of Textiles, Indian Textile Journal, Department of Industrial Policy and Promotion, Press Information Bureau