Textiles & Apparels

Textiles & Apparels

Textiles and garments form a crucial part of the Indian Economy. A Rs. 2.5 lakh crore industry, it accounts for 14% of the industrial production, 4% of the GDP, 17% of the total export earnings and is the 2nd largest employer after agriculture. Textiles and garments industry employs over 35 million people. Indian textile industry contributes about 25% share in the world trade of cotton yarn. Out of the total size of Rs. 2.5 lakh crore 64% is driven by domestic demand and 36% by exports. In 2008-09 total exports amounted to Rs. 96,200 crore.
The textiles industry in India is fragmented and diverse. At one end is the hand spun sector and at the other is the sophisticated mill sector. Small-scale divisions dominate the industry. The major divisions of the industry are organized/man-made cotton mills, man-made fibres/yarn sector, wool and woolen garments, sericulture and silk garments, handloom, handicrafts, jute and jute products and textile exports. Decentralized power looms and knitting form the largest section of textiles.

India’s advantage in textiles stems from the huge raw material base it has. India is the largest producer of jute, 2nd largest producer of cotton and silk and 4th largest producer of synthetic fibres. The contribution of India is about 12% of the world production of textile fibres and yarns (including jute). It also has easily available low-cost skilled and unskilled labor. High domestic demand, growth in organized retail and higher purchasing power will drive the growth of textiles in India. India is also a sourcing base for top international brands like Tommy Hilfiger, GAP, Benetton, Levi’s, Marks & Spencer and retailers like Wal-Mart and Tesco.

India needs to improve its scale of production and technological environment. The government has taken various policy decisions to facilitate the same. The Technological Up Gradation Fund Scheme (TUFS) and Capital Linked Subsidy Scheme (CLSS) aim at doing exactly that. The government has also allowed 100% FDI in textiles and garments through the automatic route. The government has also come up with the concept of Integrated Textile Parks (ITP). The Ministry of Textiles plans to setup 30 integrated textile parks with investment in these parks going up to Rs. 14,700 crore. A National Fibre Policy has also been drafted which will facilitate steady availability of fibre.

Per capita consumption of fibre in India is 3 kg per capita. This is only one-third when compared to the world average of 9 kg per capita. This shows the enormous opportunity that exists in India. This coupled with the cost and raw material advantages of India make it an attractive destination for textiles. Increasing working female population, increased usage of credit cards and availability of cheap finance, quota phase out and revolution in organized retailing are major growth drivers for the future. On the back of such growth opportunities the industry is expected to grow to Rs. 5.5 lakh crore and exports are expected to grow to Rs. 2.3 lakh crore by 2012.
Data Sources: Ministry of Textiles Annual Report 2009-10, NCAER, ICRIER, National Manufacturing Competitiveness Council(NMCC)

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