Last Updated: February 19, 2020
Last Updated: December, 2019
The textile and apparel industry can be broadly divided into two segments - yarn and fibre, and processed fabrics and apparel. The domestic textile and apparel market is estimated to be US$ 100 billion in 2018-19 and has grown at a CAGR of 10 per cent since 2005-06. The textile industry has around 4.5 crore of workers employed in textiles sector including 35.22 lakh handloom workers all over the country. In FY19, growth in private consumption is expected to create strong domestic demand for textiles. # Growth in demand is expected to continue at 12 per cent CAGR to reach US$ 220 billion by 2025.
Cotton production in India is estimated to have reached 33.7 million bales in FY19*. During FY19, production of fibre in India stood at 1.443 million tonnes and reached 0.850 million tonnes during April–October 2019. Production of yarn during April-August 2019 stood at 2387 million kg.
Increased penetration of organised retail, favourable demographics, and rising income levels are likely to drive demand for textiles. Cloth production stood at 58.1 billion square metres (provisional) in FY19P (up to Jan 19). India is the world's second largest exporter of textiles and clothing.
India’s textile and apparel exports stood at US$ 38.70 billion in FY19 and is expected to increase to US$ 82.00 billion by 2021 from US$ 17.53 billion during April-September 2019.
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 Union Budget 2019-20, the government has allocated Rs 700 crore (US$ 100.16 million) for Amended Technology Upgradation Fund Scheme (ATUFS). 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)'. The Government of India announced a Special Package to boost exports by US$ 31 billion, create one crore job opportunities and attract investments worth Rs 80,000 crore (US$ 11.93 billion) during 2018-2020. Cumulative FDI in the Indian textiles reached US$ 3.19 billion between April 2000 to June 2019.
Under Union Budget 2019-20, Government of India allocated around Rs 4,831.48 crore (US$ 691.29 million) for the Ministry of Textiles. Integrated Wool Development Programme has been allocated Rs 29 crore (US$ 4.14 million) under Union Budget 2019-20. The government has allocated Rs 20 crore (US$ 2.86 million) for the Scheme for Integrated Textile Parks. The Ministry of Textiles announced Rs 690 crore (US$ 106.58 million) for setting up 21 readymade garment manufacturing units in seven states for development and modernisation of Indian textile sector.
Under Budget 2019-20, the National Handloom Development Programme will get Rs 456.80 crore (US$ 65.35 million) and the Integrated Processing Development Scheme will get Rs 3.50 crore (US$ 0.50 million). Khadi Express train will be run to create awareness about the Indian khadi and Khadi and Village Industries Commission (KVIC) may soon open its first foreign venture in Bhutan.
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. As of August 2018, the Government of India has increased the basic custom duty to 20 per cent from 10 per cent on 501 textile products, to boost Make in India and indigenous production.
Note: P - Provisional, *-first advance estimate, # - India Ratings and Research.
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Last Updated: February 19, 2020
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