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Indian Textiles and Apparel Industry Analysis

March, 2014

India is the world's second largest producer of textiles and garments. Indian textile industry accounts for about 24 per cent of the world’s spindle capacity and eight per cent of global rotor capacity.

Abundant availability of raw materials such as cotton, wool, silk and jute and skilled workforce have made India a sourcing hub. The size of Indian textile and apparel market stood at US$ 89 billion in 2011 and is expected to touch US$ 223 billion by 2021.

Textile plays major role in the Indian economy. It accounts for 27 per cent of foreign exchange inflows and contributes 14 per cent to industrial production and 4 per cent to the gross domestic product (GDP). With over 45 million people, the industry is one of the largest sources of employment generation in the country, and also accounts for nearly 11 per cent of total exports. Exports grew to US$ 33.3 billion in FY12 from US$ 17.6 billion in FY06, registering a compound annual growth rate (CAGR) of 11.2 per cent.

The Government of India is taking initiatives to attract foreign investments in the textile sector through promotional visits to countries such as Japan, Germany, Italy and France. The government has allowed 100 per cent foreign direct investment (FDI) in the sector through the automatic route. It has also allocated US$ 10.4 million for apparel parks under Scheme for Integrated Textile Parks (SITP).

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