Indian Textiles and Apparel Industry Analysis

The textiles and apparel industry can be broadly divided into two segments - yarn and fibre and processed fabrics and apparel. The domestic textiles and apparel market was estimated at US$ 100 billion in FY19. The textile industry has around 4.5 crore workers including 35.22 lakh handloom workers all over the country. In FY19, growth in private consumption was expected to create strong domestic demand for textiles. Growth in demand is expected to continue at 12% CAGR to reach US$ 220 billion by 2025-26.

Cotton production in India reached 37.10 million bales in FY21*. During FY19, production of fibre in India stood at 1.44 million tonnes (MT) and reached 2.40 MT in FY21 (till January 2021), while that for yarn, the production stood at 4,762 million kgs during same period. The total raw silk production increased by 1% (35,820 MT) in FY20 over the previous year FY19 (35,468 MT) despite COVID-19.

India is the world's second largest exporter of textiles and clothing. Increased penetration of organised retail, favourable demographics, and rising income level are likely to drive demand for textiles. Cloth production stood at 63.34 billion square meters in FY20 (till January 2020).

Exports of textiles (RMG of all textiles, cotton yarn/fabs./made-ups/handloom products, man-made yarn/fabs./made-ups, handicrafts excl. handmade carpets, carpets and jute mfg. including floor coverings) stood at US$ 2.99 billion, as of June 2021.

In July 2021, exports of cotton yarn/fabrics/made-ups, handloom products, etc., from India increased by 50.86% in June 2021 over June 2019.

The Indian textile and apparel industry is expected to grow to US$ 190 billion by FY26.

The share of the India’s textiles and apparel exports in mercantile shipments was 11% in 2019-20.

Indian apparel market is expected to reach US$ 85 billion by 2021.

India is working on major initiatives, to boost its technical textile industry. Owing to the pandemic, the demand for technical textiles in the form of PPE suits and equipment is on rise. Government is supporting the sector through funding and machinery sponsoring.

Top players in the sector are attaining sustainability in their products by manufacturing textiles that use natural recyclable materials.

Rising Government focus and favourable policies is leading to growth in the textiles and clothing industry. The Ministry of Textiles is encouraging investment through increasing focus on schemes such as Technology Up-gradation Fund Scheme (TUFS). In Union Budget 2020-21, the Government has allocated Rs. 761.90 crore (US$ 109.01 million) for Amended Technology Upgradation Fund Scheme (A-TUFS). 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 announced a special package to boost export by US$ 31 billion, create one crore job opportunities and attract investment worth Rs. 80,000 crore (US$ 11.93 billion) during 2018-2020. Cumulative FDI (Foreign Direct Investment) inflow in the textiles sector stood at over US$ 3.75 billion between April 2000 to March 2021.

In Union Budget 2020-21, the Government of India has allocated around Rs. 3,515 crore (US$ 502.93 million) to the Ministry of Textiles and Rs. 80 crore (US$ 11.45 million) for the scheme on Integrated Textile Parks. The Ministry of Textiles has 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. National Technical Textiles Mission is proposed for a period from 2020-21 to 2023-24 at an estimated outlay of Rs. 1,480 crore (US$ 211.76 million).

The production-linked incentive (PLI) scheme for man-made fibre and technical textiles will help boost manufacturing, increase exports and attract investments into the sector.

Under the production linked incentive scheme, government has approved Rs. 10,683 crore (US$ 1.44 billion) for manmade fibre and technical textiles manufacturing.

The National Handloom Development Programme has been allocated Rs. 388.21 crore (US$ 55.55 million), whereas, the Integrated Processing Development Scheme has received Rs. 50 crore (US$ 7.15 million) in Union Budget 2020-21.

In March 2021, Minister of Textiles Smriti Irani announced that India will be fully self-reliant in silk production in the next two years.

To support the handloom weavers/weaver entrepreneurs, the Weaver MUDRA Scheme was launched to provide margin money assistance at 20% of the loan amount subject to a maximum of Rs. 10,000 (US$ 134.22) per weaver. The loan is provided at an interest rate of 6% with credit guarantee of three years.

In August 2021, Minister of State (MoS), Ministry of Petroleum & Natural Gas and Labor & Employment, Mr. Rameswar Teli launched ONGC-supported Assam handloom project ‘Ujjwal Abahan’ through the virtual platform. The project will support and train >100 artisans of Bhatiapar of Sivasagar, Assam in Hathkharga handicraft.

In August 2021, Flipkart and Himachal Pradesh State Handicrafts and Handloom Corporation Ltd. (HPSHHCL) signed a memorandum of understanding (MoU) to help the state’s master craftsmen, weavers and artisans showcase their hallmark products on e-commerce platforms.

In August 2021, Union Minister of Textiles, Commerce and Industry, Consumer Affairs & Food and Public Distribution, Mr. Piyush Goyal said that steps need to be taken to boost production capacities of handloom sector from existing Rs. 60,000 crore (US$ 8.06 billion) to 125,000 crore (US$ 16.80 billion) in three years. He added that target must be set to increase exports of handloom items from existing Rs. 2,500 crore (US$ 335.92 million) to Rs. 10,000 crore (US$ 1.34 billion) in three years. He also announced that a committee will be constituted consisting of all weavers, trainer equipment makers, marketing experts and other stake holders to recommend ways and means to achieve these objectives and enhance overall progress of the handloom sector.

In July 2021, the government extended the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for exports of apparel/garments and made-ups until March 2021. This will help boost exports and enhance competitiveness in the labour-intensive textiles sector.

In April 2021, Union Minister Smriti Irani has assured strong support from the Textile Ministry to reduce industry’s dependence on imported machine tools by partnering with engineering organisations for machinery production. She also stated that the PLI scheme for the textile industry is almost ready. The scheme aims to develop Man Made Fiber (MMF) apparel and technical textiles industry by providing incentive from 3-15% on stipulated incremental turnover for five years.

In March 2021, Natco Pharma announced its expansion into pheromone-based technology in order to provide Indian farmers with an integrated pest control solution. The company is planning to introduce its first green-label pheromone product to control ‘pink bollworm’ in cotton fields. For the pheromone-based mating disruption technology, its Crop Health Science (CHS) division will collaborate with ATGC Biotech Pvt. Ltd. (ATGC).

In March 2021, the state-run Odisha Industrial Infrastructure Development Corporation (IDCO) and Indian Oil Corporation Limited (IOCL) signed an MoU to establish a plastic park in Paradip, Odisha.

In January 2021, the Indian Texpreneurs’ Federation (ITF) suggested a six-pronged strategy to achieve double-digit growth in the textiles and apparel sector. ITF published the strategy under the theme ‘2021-A year of progress for Indian Textile & Apparel Sector’.

In January 2021, the Indo–Tibetan Border Police (ITBP) signed an MoU with Khadi and Village Industries Commission (KVIC) for supplying 1.72 lakh cotton khadi durries every year for the Central Armed Police Forces (CAPF).

Note: P - Provisional, *-fourth advance estimate, # - India Ratings and Research.