From Efficient Production to Global Export Powerhouse: The Evolution of India's Textile Industry
Introduction
India is one of the world's largest producers of textiles and apparel. The domestic textile and apparel industry contributes approximately 2.3% to the country's GDP, 13% to industrial production, and 12% to exports. India holds a 4% share in the global trade of textiles and apparel.
The country is among the largest producers of cotton and jute and ranks as the second-largest producer of silk globally. Impressively, 95% of the world's hand-woven fabric originates from India. Total textile exports are projected to reach US$65 billion by FY26, with an expected growth rate of 10% CAGR.
India has also emerged as the second-largest manufacturer of PPE worldwide, with over 600 companies certified to produce PPE. The global market for PPE is expected to grow from US$52.7 billion in 2019 to over US$92.5 billion by 2025.
Looking forward, India aims to achieve US$250 billion in textile production and US$100 billion in exports by 2030. During the fiscal year 2021-22, the textiles and apparel industry accounted for 7% of industrial output by value. The sector represented 10.33% of India's overall export basket.
In June 2023, the government approved R&D projects worth US$7.4 million in the textile sector. Additionally, substantial funds, including US$109.99 million for the Amended Technology Upgradation Fund Scheme (ATUFS), were allocated in the 2023-24 union budget to encourage private equity investments and boost employment. Between April 2000 and September 2023, total FDI inflows in the textiles sector reached US$4.34 billion.
Indian Textile Exports
In 2023, the global textile industry witnessed significant exports from India across various categories. Leading the way was the Ready-Made Garments (RMG) Cotton category, which includes items such as t-shirts, jeans, and dresses, with an impressive export value of US$9,280 million. Cotton fabrics, celebrated for their versatility and comfort, had contributed US$6,818 million to global exports.
Manmade yarn, comprising synthetic fibers like polyester, nylon, and acrylic, had an export value of US$4,948 million and is extensively used in clothing, upholstery, and industrial textiles. The RMG Others category, likely encompassing non-cotton ready-made garments and synthetic fabrics, accounted for US$3,564 million. Meanwhile, RMG Manmade Fibers focused on garments made from synthetic or manmade fibers, offering different properties compared to cotton. Cotton yarn, a crucial raw material for fabric production, added US$2,752 million to export figures. Handmade non-silk carpets, known for their intricate designs and materials like wool and synthetic fibers, were valued at US$1,315 million. Raw cotton, vital for spinning mills, contributed US$781 million. Lastly, manmade staple fiber, which includes short fibers like polyester and rayon, had an export value of US$462 million.
This diverse range of categories highlights the thriving nature of the textile industry, with both cotton and manmade fibers playing essential roles. India stands out as a major exporter, specializing in ready-made garments, cotton textiles, and artificial textiles, underscoring the global significance and reach of this sector.
Textile Exports to Australia
The latest data reveals fascinating insights into India’s textile exports to Australia, showcasing a diverse range of categories. Leading the pack is the category of Worn, Rags, and Other Textile, with exports totaling a substantial US$168 million. Carpets and floor coverings also feature prominently, with exports valued at US$72.56 million, highlighting India's strength in this segment. Additionally, Vegetable Textile and Woven Fabric exports reached US$12.27 million, while manmade staple fibers contributed significantly with exports worth US$6.96 million. Surprisingly, cotton exports amounted to US$5.6 million, showcasing a niche market within Australia's textile trade. Finally, Industrial Use Textile exports rounded off the list with US$4.52 million.
Numerous product categories within India's textile exports to Australia showcase significant promise. Flexible containers, made-up textile articles, jute sacks and bags, technical textiles, and even cleaning cloths all exhibit substantial export potential. These figures, representing the maximum estimated value above its current value of exports that India could achieve in each category, outline lucrative opportunities for growth. However, a closer examination reveals a notable export gap between this potential and India's actual exports. For instance, in the category of Made up articles of textile, where the export potential amounts to US$10 million, current exports to Australia stand at US$6.6 million, indicating an export gap of US$3.4 million. Similarly, in Sacks and bags of jute, despite an export potential of US$3.6 million, actual exports amount to US$1.7 million, highlighting a gap of US$1.9 million. Likewise, Technical purpose textile presents an export gap of US$0.7 million, with an export potential of US$1.5 million against actual exports of US$0.8 million.
Bridging this gap presents an exciting opportunity with far-reaching benefits. Beyond merely increasing exports, a strengthened Indian presence in Australian textiles promises to foster deeper trade relations and economic cooperation between the two nations. This collaboration not only bolsters the economies of India and Australia but also contributes to the development of a more robust and integrated global textile market.
SWOT Analysis for the Indian Textile Industry
Strengths:
1. Presence of world-class infrastructure.
2. Increased focus on technical textiles.
3. Abundance of raw materials and skilled manpower.
4. Presence of the entire value chain and competitive manufacturing costs.
Weaknesses:
1. Increased reliance on cotton, with insufficient focus on other fabrics.
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2. Unorganized fabric processing and manufacturing sector.
3. Highly fragmented textile industry.
Opportunities:
1. Increasing industry share and rising global demand.
2. Market entry through bilateral negotiations.
3. Integration of information technology and easy availability of electronic data interchange.
Threats:
1. Exposure of India's closed local market to global competitors, potentially harming the domestic market.
2. Increased number of fashion seasons per year, shortening the fashion cycle.
3. Intense competition from other nations in export market.
Conclusion
India's textile industry is poised for remarkable growth and international prominence. As we strive to achieve ambitious production and export targets, the focus remains on leveraging our strengths and addressing market gaps. By enhancing trade relations with Australia and other global markets, India aims to foster deeper economic cooperation and drive the development of a robust, integrated global textile market.