If you happen to walk through the bustling streets of any Indian city, you will be reminded of the threads of change that have woven their way through the country's rich textile industry. From the handloom sarees of Banaras to the intricate embroidery of Lucknow, India's textiles have been woven into the fabric of the nation's history and culture. I can't help but recall the time when I visited a small village Venkata Giri in Andhra Pradesh, where I saw a group of women huddled together, skilfully weaving intricate patterns into a vibrant cloth. Their nimble fingers danced across the loom, and their smiles shone with pride as they shared stories of their craft. It's moments like these that remind me of the beauty and resilience of India's textile industry, and the incredible journey it has taken over the years. In this blog, let us look at the current state of the Indian textile industry and what does the future holds for the industry.
The Market Overview in Numbers
Before jumping into the future, lets rewind the market overview of Indian textile industry:
• The domestic apparel & textile industry in India contributes approx. 2% to the country’s GDP, 7% of industry output in value terms. The share of textile, apparel and handicrafts in India’s total exports was 11.4% in 2020-21. India holds 4% share of the global trade in textiles and apparel.
• India is one of the largest producers of cotton and jute in the world. India is also the 2nd largest producer of silk in the world and 95% of the world’s hand-woven fabric comes from India. The Indian technical textiles segment is estimated at $16 bn, approximately 6% of the global market. The textiles and apparel industry in India is the 2nd largest employer in the country providing direct employment to 45 mn people and 100 mn people in allied industries.
• India has also become the second-largest manufacturer of PPE in the world. More than 600 companies in India are certified to produce PPEs today, whose global market worth is expected to be over $92.5 bn by 2025, up from $52.7 bn in 2019.
• India’s exports of textiles and apparel are expected to reach $100 bn in the next 5 years, growing at a CAGR of 11%
• The Indian technical textiles market was estimated at $17.6 bn in 2020-21 and grew at a CAGR of 10% since 2015-16
• The domestic apparel & textile industry in India contributed to 12% of export earnings.
• India has a share of 5% of the global trade in textiles and apparel
• The export of cotton Textiles was $ 17.2 bn with 39% share registering a growth of 54% and 67% during 2021-22 over FY 2020-21 and FY 2019-20, respectively
The Wind Beneath the Wings
One of the key drivers of growth in the Indian textile industry is its large and growing population, which creates a significant demand for textile products. Additionally, India has a well-developed infrastructure for textile manufacturing and export, including specialized textile parks, ports, and logistics networks. The government of India has also implemented several policies and initiatives to support the growth of the textile industry, such as the Technology Upgradation Fund Scheme (TUFS), which provides financial assistance to textile manufacturers to upgrade their machinery and equipment. These are acting as wind beneath the wings of Indian textile industry to propel it forward into a promising future.
Challenges and Roadblocks
• Global Competition: The industry faces tough competition from other low-cost textile manufacturing countries, such as Bangladesh, Vietnam, and China. This competition can put pressure on Indian textile manufacturers to reduce prices and improve efficiency, which can impact their profitability.
• High Production Costs: Despite having a large and skilled workforce, the cost of production in India is relatively high due to factors such as high energy costs, expensive raw materials, and outdated machinery.
• Lack of Skilled Labour: Although India has a large workforce, the industry often struggles to find skilled workers who can operate and maintain modern textile machinery. This can impact the quality of products and limit the industry's ability to innovate and adopt new technologies.
• Inadequate Infrastructure: The textile industry relies on adequate infrastructure, including roads, ports, and logistics networks. However, the infrastructure in India is often inadequate, leading to delays and increased costs for manufacturers.
• Sustainability: The industry is under pressure to become more sustainable and environmentally friendly. The industry is one of the largest consumers of water and energy and generates
significant amounts of waste. Meeting sustainability goals requires significant investment in technology and practices.
• Fluctuating Raw Material Prices: The price of raw materials, such as cotton and yarn, can fluctuate widely, impacting the profitability of manufacturers. This can make it difficult to plan production schedules and pricing.
• Policy and Regulatory Issues: The industry is subject to a complex regulatory environment, including taxes, import/export regulations, and labour laws. These regulations can impact the competitiveness of Indian textile manufacturers and their ability to operate efficiently.
Possible Solutions :
• Adopting new technologies: To compete with other low-cost countries and improve efficiency, Indian textile manufacturers are investing in modernizing their machinery and adopting new technologies. For example, there is a growing trend towards automation and robotics, which can help reduce labour costs and improve quality.
• Training and skilling the workforce: The industry is investing in training programs to develop the skills of the workforce. This can help address the shortage of skilled labour and improve the quality of products.
• Promoting exports: To remain competitive in the global market, Indian textile manufacturers are expanding their export markets. The government is providing incentives and support to encourage export promotion.
• Addressing policy and regulatory issues: The government is working to simplify regulations and policies that impact the textile industry. This can help improve the ease of doing business and reduce compliance costs.
• Collaborating with global partners: Indian textile manufacturers are partnering with international companies to access new technologies, markets, and expertise. This can help improve product quality and innovation.
The Road Ahead
The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. India is working on various 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 the rise. The government is supporting the sector through funding and machinery sponsoring. Top players in the sector are achieving sustainability in their products by manufacturing textiles that use natural recyclable materials.
With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. The growth in textiles will be driven by growing household income, increasing population, and increasing demand by sectors like housing, hospitality, healthcare, etc.
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