Indian Textiles Industry
INDIAN TEXTILES INDUSTRY
India’s textiles sector is one of the oldest industries in the
Indian economy, dating back to several centuries. The industry is
extremely varied, with hand-spun and hand-woven textiles sectors at
one end of the spectrum, while the capital-intensive sophisticated
mills sector on the other end. The decentralized power looms/
hosiery and knitting sector forms the largest component in the
textiles sector. The close linkage of textiles industry to
agriculture (for raw materials such as cotton) and the ancient
culture and traditions of the country in terms of textiles makes it
unique in comparison to other industries in the country. India’s
textiles industry has a capacity to produce wide variety of products
suitable for different market segments, both within India and across
the world.
India’s textiles industry contributed 7% to the industry output (by
value) in 2018-19. The Indian textiles and apparel industry
contributed 2% to the GDP, 12% to export earnings and held 5% of the
global trade in textiles and apparel in 2018-19. The share of the
India’s textiles and apparel exports in mercantile shipments was 11%
in 2019-20. Textiles industry has around 4.5 crore employed workers
including 35.22 lakh handloom workers across the country.
Cotton production is expected to reach 37.10 million bales and
consumption is expected to reach 114 million bales in FY21—13%
growth over the previous year. The domestic textiles and apparel
market stood at an estimated US$ 100 billion in FY19. The production
of raw cotton in India is estimated to have reached 35.4 million
bales in FY20^. 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. 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$ 2.94 billion, as
of May 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 textiles sector has witnessed a spurt in investment during the
last five years. The industry (including dyed and printed) attracted
Foreign Direct Investment (FDI) worth US$ 3.75 billion from April
2000 to March 2021. In May 2021, Indo Count Industries Ltd. (ICIL),
announced an investment of Rs. 200 crore to expand its production
capacity. 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. Indian government
has come up with several export promotion policies for the textiles
sector. It has also allowed 100% FDI in the sector under the
automatic route.
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.
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 per weaver.
The loan is provided at an interest rate of 6% with credit guarantee
of three years. Gorakhpur is on track to become a major garment
manufacturing centre, boosting the economy in eastern Uttar Pradesh.
The Gorakhpur Industrial Development Authority (GIDA) will provide
four acres of land for construction of a flattened factory and will
enable accessible to entrepreneurs. In March 2021, The Ministry of
Textiles favoured limited deal for the India-UK free trade agreement
that could boost the garments sector. In 2020-21, the UK is India's
fourteenth largest trading partner, accounting for US$ 8.7 billion
in exports and US$ 6.7 billion in imports. Under the proposed trade
agreement, the Textile Ministry expects more market access for the
Indian textiles and clothing sector in order to achieve its full
potential.
In March 2021, under the ongoing sub-mission on agroforestry (SMAF)
scheme, the Ministry of Agriculture and Farmers Welfare signed a
memorandum of understanding (MoU) with the Central Silk Board, under
the Ministry of Textiles, on a convergence model to implement
agroforestry in the silk sector. In March 2021, toys were identified
as one of the 24 primary sectors listed under the self-reliant India
initiative. The Department for Promotion of Industry and Internal
Trade (DPIIT) has developed a ‘National Action Plan’ for toys that
calls on several central ministries, including textiles, MSME,
I&B, Education, DPIIT (under the Ministry of Commerce) and other
departments, to nurture and promote the industry. Effective 01
January 2021, to boost exports, government have extended the benefit
of the Scheme for Remission of Duties and Taxes on Exported Products
(RoDTEP) to all exported goods. To support the handloom and
handicrafts sector, the government has taken steps to onboard
weavers/artisans on Government e-Marketplace (GeM), provide a wider
market and enable them to sell their products directly to various
government departments and organisations. As of December 31, 2020,
171,167 weavers/artisans/handloom entities have been registered on
the GeM portal. Defence Research and Development Organisation (DRDO)
is helping the Indian textile industry to produce yarns and
eliminate dependence on import of Chinese and other foreign clothing
for military uniforms. Indian defense sector has expressed support
towards the Indian technical textile sector.
In March 2021, while addressing the 9th edition of TECHNOTEX 2021
organized by FICCI, General Bipin Rawat, Chief of Defence Staff
appreciated the innovations in Indian technical textile and stated
that the armed forces will rather reduce imports and instead procure
technical textiles from Indian industries as a part of the
Atmanirbhar Bharat initiative. In October 2020, the Cabinet
Committee on Economic Affairs chaired by Mr. Narendra Modi approved
mandatory packaging of 100% food grains and 20% sugar in jute bags.
Under the Jute Packaging Materials (Compulsory Use in Packing
Commodities) Act, 1987, the government is required to consider and
provide for the compulsory use of jute packaging materials for
supply. Government launched production linked incentive scheme to
provide incentives for manufacture and export of specific textile
products made of man-made fibre.
On September 2, 2020, the Union Cabinet approved signing an MOU
between textile committee, India and M/s Nissenken Quality
Evaluation Centre, Japan, for improving quality and testing Indian
textiles and clothing for the Japanese market. This India-Japan pact
on cooperation in textiles will facilitate Indian exporters to meet
the requirements of Japanese importers as per the latter’s technical
regulations.
Under Union Budget 2020-21, a National Technical Textiles Mission
is proposed for a period from 2020-21 to 2023-24 at an estimated
outlay of Rs. 1,480 crore. In 2020, New Textiles Policy 2020 is
expected to be released by the Ministry of Textiles. 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% to 4%.
The Government of India has taken several measures including
Amended Technology Up-gradation Fund Scheme (A-TUFS), estimated to
create employment for 35 lakh people and enable investment worth Rs.
95,000 crore by 2022. Integrated Wool Development Programme (IWDP)
was approved by Government of India to provide support to the wool
sector, starting from wool rearer to end consumer, with an aim to
enhance quality and increase production during 2017-18 and
2019-20.
In June 2021, KVIC recorded a 7.71% growth in gross annual turnover
to Rs. 95,741.74 crore from Rs. 88,887 crore in FY20. In CY2020,
Cotton Corporation of India made a record procurement of 151 lakh
bales under MSP operations, which is 290% higher than 38.43 lakh
bales procured during the corresponding period last year. I-ATUFS, a
web-based claims monitoring and tracking mechanism was launched on
April 21, 2016. 381 new block level clusters were sanctioned. Under
the Scheme for Integrated Textile Parks (SITP), 59 textile parks
were sanctioned, out of which, 22 have been completed. Employment
increased to 45 million in FY19 from 8.03 in FY15. Exports of
readymade garments (of all textiles) was worth US$ 1.19 billion as
of December 2020.
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. The future for the Indian textiles industry
looks promising, buoyed by strong domestic consumption as well as
export demand. 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.
High economic growth has resulted in higher disposable income.
This has led to rise in demand for products creating a huge
domestic market.
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