Indian Textiles and Apparel Industry Analysis

The textile and apparel industry can be broadly divided into two segments - yarn and fibre, and processed fabrics and apparel. The domestic textile industry in India is estimated to reach US$ 250 billion by 2019 from US$ 150 billion in November 2017, while cotton production in India is estimated to have reached 37.3 million bales in FY18.Indian technical Textile industry is forecasted to grow at a CAGR of 20 per cent to reach Rs 200,823 crore (US$ 29.96 billion) by 2020-21.*

Increased penetration of organised retail, favourable demographics, and rising income levels are likely to drive demand for textiles. India is the world's second largest exporter of textiles and clothing. 

Textile and apparel exports from India are expected to increase to US$ 82 billion by 2021. Exports of textiles and Apparels from India reached US$ 6.25 million in FY2019@. Manmade garments remain the largest contributor to total textile and apparel exports from India, contributing 24.53 per cent to total textile.

Rising government focus and favourable policies is leading to growth in the textiles and clothing industry. The Ministry of Textiles is encouraging investments through increasing focus on schemes such as Technology Up-gradation Fund Scheme (TUFS). Under the Union Budget 2018-19, Rs 2,300 (US$ 355.27 million) crore have been allocated for TUFS and Rs 30 crore (US$ 4.63 million) for the Scheme for Integrated Textile Parks, under which there are 47 ongoing projects. In May 2018, textiles sector recorded investments worth Rs 27,000 crore (US$ 4.19 billion) since June 2017.The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme named 'Scheme for Capacity Building in Textile Sector (SCBTS)'.In August 2018, the Government of India announced a Special Package for garments and made-ups sectors which includes enhanced duty drawback coverage, labour law reforms and relaxation of Section 80JJAA of Income Tax Act.Cumulative FDI in the Indian textiles reached US$ 2.93 billion between April 2000 to March 2018.

The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4 per cent

Note: @ - betweenApril – May 2018, * - According to Baseline Survey