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 country’s gross domestic product (GDP); 17 per cent to export earnings. It is the second largest provider of employment after agriculture and provides direct employment to over 35 million people. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.
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 6 per cent during December 2013. The production increased by about 4 per cent during the year April-December 2013.
Cotton yarn production increased by 6 per cent during December 2013 and by 10 per cent during April-December 2013. Blended and 100 per cent non-cotton yarn production increased by 5 per cent during December 2013 and increased by 8 per cent during the year April-December 2013.
Cloth production by mill sector increased by 4 per cent during December 2013 and by 6 per cent during April-December 2013. Cloth production by handloom, and hosiery increased by 3 per cent and 11 per cent respectively during December 2013. Production by handloom, and hosiery sectors increased by 4 per cent and 13 per cent during April-December 2013. The total cloth production grew by 2 per cent during April-December 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.
Garment exports from India is expected to touch US$ 60 billion over the next 3 years, with the help of government support, said Dr A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC).
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 6,428.18 crore (US$ 1.03 billion) during April 2000 to November 2013.
Some of the major investments in Indian Textile Industry are:
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.
The Government has also allowed 100 per cent FDI in the sector through the automatic route. In the 12th Five Year Plan (2012–17), the government plans to spend US$ 9.1 billion on textiles as against US$ 4 billion in the 11th Plan.
Some of initiatives taken by the Government to further promote the industry are as under:
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$ 0.016 as on February 14, 2014
References: Ministry of Textiles, Indian Textile Journal, Department of Industrial Policy and Promotion, Press Information Bureau