INDIAN TEXTILE INDUSTRY:

The Changing Landscape

Indian Textile Industry: The Changing Landscape

1
Contents

BACKGROUND ........................................................................................................................................ 3

THE VALUE CHAIN................................................................................................................................... 4

TEXTILES -- A KEY SECTOR OF THE INDIAN ECONOMY ....................................................................... 5

INDIA’S TEXTILE EXPORTS ...................................................................................................................... 7

Abolishment of World Trade Organisation's Textile and Clothing Quotas in 2005 and India’s
Exports ..................................................................................................................................................... 9

THE CHANGING LANDSCAPE – WHERE DOES INDIA STAND? .......................................................... 11

COUNTRIES THAT INDIAN TEXTILE INDUSTRY SHOULD FOCUS ON TO EXPAND GLOBAL MARKET
SHARE..................................................................................................................................................... 14

Global Trend Favours MMF while India Focusses on Cotton Textiles ............................................ 16

THE POLICY CANVAS AND OPPORTUNITIES ...................................................................................... 17

Production Linked Incentive (PLI) Scheme ........................................................................................ 18

Scheme for Capacity Building in Textile Sector (SAMARTH) ............................................................ 18

PM Mega Integrated Textile Region and Apparel (PM MITRA) ........................................................ 18

Handloom Clusters ............................................................................................................................... 19

Existing Schemes and Policies............................................................................................................. 19

Free Trade Agreements (FTAs) ............................................................................................................ 19

Drawing Opportunities from Limitations of Other Players ............................................................. 20

CHALLENGES ......................................................................................................................................... 20

OUTLOOK .............................................................................................................................................. 21

APPENDICES .......................................................................................................................................... 23

Indian Textile Industry: The Changing Landscape

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INDIAN TEXTILE INDUSTRY:
The Changing Landscape

Background

Indian textile industry is one of the oldest in the world and has evolved over a period of over 5000
years. The earliest records of Indian cotton threads date to around 4000 BC and those of dyed fabrics
are documented around 2500 BC. Over the years, Indian textile industry has transformed
enormously and has set standards of fabric making as well as the fashion industry across the world.
It has a history of producing high-quality textiles that are unique and representative of the rich
cultural heritage of different regions and states in India.

The apparel and textile industry in India contributes around 2.3 % to the country’s GDP without taking
into its forward and backward linkages while it makes up 7% of industrial production in value terms.
The share of textile, apparel and handicrafts in India’s total exports stood at 11.4% in 2020-21. India
is the 4th largest exporter of textiles and apparel in the world. 1

India’s traditional textiles comprise both handloom and machine-made textiles made of cotton, jute,
silk, and wool. While the industry generates a vast range of products made of cotton, jute, silk, wool
and man-made fibres (MMF), the manufacturing of fibres, spinning yarn, weaving fabric, dyeing, and
printing textiles, cloth, and apparel constitute India’s textile industry. The textile industry is
dependent on agriculture for raw materials like cotton, jute and silk. Indian textile industry is the
second largest employment-generating industry after agriculture.

1
https://www.investindia.gov.in/sector/textiles-apparel

Indian Textile Industry: The Changing Landscape

3
The Value Chain
The country has a robust value chain of natural and man-made fibres (MMF), apparel and home
furnishings affordable to all segments of the population domestically as well as globally. It also has a
skilled and abundant workforce compared to other countries. The scope for the expansion and
growth of the textile industry is immense given the availability of abundant raw materials such as
cotton, wool, silk, and jute.

Fiber Yarn Fabric Apparel

India has immense potential to lead across all the points in the value chain given the vast workforce
of trained artisans, 168 Energy Intensive Textile Units and 31 Functional Textile Parks. 2

Wide range of segments of Indian textile industry include traditional handloom, handicrafts, wool,
silk products, and organized textile industry in India (one characterized by the use of capital-intensive
technology for the mass production of textile products and includes spinning, weaving, processing,
and apparel manufacturing).

2
https://www.investindia.gov.in/sector/textiles-apparel

Indian Textile Industry: The Changing Landscape

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Textiles -- A Key Sector of the Indian Economy
The current market size of Indian textile industry is valued at $ 152 billion. It is estimated to grow to
250 billion by 2025 at a CAGR of 12% from 2019-2020. 3

GROWTH POTENTIAL

• India's annual textiles exports expected to rise to $ 100

billion in the next five years from the $ 44.4 billion in FY
2021-2022.
• Indian Textile industry is estimated to attain a market
size of $250 billion by 2030.

Source: https://www.investindia.gov.in/sector/textiles-apparel

EMPLOYMENT POTENTIAL

• 2nd largest employer in the country

• 45 million people directly employed,
• 100 million people employed in allied industries

Source: https://www.investindia.gov.in/sector/textiles-apparel

COMPETITIVE ADVANTAGES OF INDIA

• Huge and low-cost labour force,

• Large domestic supply of fabrics
• Capacity to manufacture a wide range of products
• Robust and diverse raw material base for
manufacturing natural and man – made fabrics
• Capacity-based advantage in textile and spinning
• Industry covers the entire supply chain

3
Textiles & Garments Weaving New India, One Thread At A Time, Invest India, National Investment Promotion
& Facilitation Agency, Government of India

Indian Textile Industry: The Changing Landscape

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 Net Net Market
Company Company Name Company
Sales Profit Cap.

1 Arvind 7,722.7 KPR Mill 635.0 Page Industries 41,238.8

2 Alok Industries 6,748.3 Page Industries 571.3 KPR Mill 26,846.1

3 Trident 6,267.5 Trident 421.9 Trident 19,588.9

4 Raymond 5,779.6 Raymond 410.5 Welspun India 16,078.6

5 Welspun India 5,654.6 Arvind 352.0 Raymond 12,157.0

6 Page Industries 4,788.6 Siyaram Silk 251.8 Swan Energy 11,592.6

7 KPR Mill 4,739.6 Indo Count 238.2 Alok Industries 9,627.6

8 Filatex India 4,303.9 Gokaldas Export 178.4 PDS 8,531.8

9 Indo Rama Synth 3,906.4 Soma Textile 165.5 Jindal Worldwid 6,716.4

10 RSWM 3,788.9 Nitin Spinners 164.8 Garware Technic 6,375.9

11 Sutlej Textiles 3,039.2 Garware Technic 159.1 Indo Count 5,825.8

12 Future Life 2,838.3 Welspun India 151.7 Arvind 5,751.4

13 Nahar Spinning 2,796.9 Lux Industries 146.8 Gokaldas Export 5,227.9

14 Indo Count 2,783.6 Sangam India 134.5 Kewal Kiran 4,820.0

15 Sangam India 2,715.3 Monte Carlo 132.7 Lux Industries 4,287.5

16 BOMDYEING 2,673.7 Sportking India 132.0 BOMDYEING 3,294.2

17 Nitin Spinners 2,406.7 Kewal Kiran 119.3 Pearl Global In 2,723.9

18 Lux Industries 2,368.0 Jindal Worldwid 114.1 Dollar Ind 2,520.8

19 Siyaram Silk 2,229.3 Ambika Cotton 111.9 Siyaram Silk 2,372.9

20 Gokaldas Export 2,221.1 Banswara Syntex 111.4 Filatex Fashion 2,346.9

21 Sportking India 2,205.0 Nahar Spinning 110.8 Mayur Uniquoter 2,299.6

22 Jindal Worldwid 2,149.0 RSWM 109.6 Rupa and Comp 2,189.3

23 Century Enka 2,072.1 Mayur Uniquoter 107.5 Filatex India 2,114.5

24 Himatsingka Sei 2,052.7 S P Apparels 91.8 Ganesha Ecosph 1,910.1

25 Nandan Denim 2,026.8 Century Enka 90.4 Raj Rayon Ind 1,779.5

Indian Textile Industry: The Changing Landscape

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India’s Textile Exports
India is a leading producer of cotton and jute in the world while it is the 2nd largest producer of silk in
the world. Further, 95% of the hand-woven fabric in the world is manufactured in India. 4

INDIA – A LEADING EXPORTER OF TEXTILE INDUSTRY

• 2nd largest producer of textiles and 2nd largest producer

of textiles apparel in the world.
• ~5% share of the global trade in textiles and apparel (FY
2021-22).
• The export of cotton textiles made up $ 11.1 billion or
30% share during 2022-23.
• Prominent export destinations: USA, EU-27, UK (Around
50% of India’s textiles and apparel exports)

India is the second largest producer of textiles in the world after China. Being the largest producer of
cotton in the world, India accounts for 23% of global cotton production and has the largest acreage
under cotton cultivation (119.10 lakh hectares) which makes up around 36% of the world
area (326.36 lakh hectares) under cotton cultivation. India is 2nd largest producer of silk in the world.
India is also the second largest producer of manmade fibres next to China. 5

4
https://www.investindia.gov.in/sector/textiles-apparel
5
Annual Report 2022-23, Ministry of Textiles Government of India

Indian Textile Industry: The Changing Landscape

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 India’s Textile Export (Principal Commodity wise)
($ Million)
50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

Readymade Garment Cotton Textiles Man-made textiles

Wool & Woolen Silk Products Handloom Products

textiles
Carpets Jute Products Handicrafts

Source: Author’s compilation based on data (provisional) from Directorate General of Commercial Intelligence
and Statistics, Government of India

As a leading exporter of textiles, India exports an array of textile products, viz. cotton textiles, wool
and woollen textiles, silk products, handloom products, carpets, jute products, handicrafts and man-
made fibres (MMF)

India is the third-largest exporter of textiles and apparel in the world. India’s total merchandise
exports stood at 10.5% of total exports in 2021-22. India accounts for 4.6% of the global trade in
textiles and apparel. Major textile and apparel export destinations for India are USA, EU-27 and UK;
these accounts for around 50% of India’s textiles and apparel exports. 6

Except for a decline in textile exports in FY20 and FY21 on account of Covid-19 pandemic, the
country’s exports have stayed strong. In FY22, textile exports had a share of 15% in country’s
earnings. 7

Ready-made garments stood among the most exported product, followed by cotton textiles and
man-made textiles in the FY 2022. India’s textile exports stood at over $ 44 billion in FY 2022. The

6
Annual Report 2022-23, Ministry of Textiles Government of India
7
https://retail.economictimes.indiatimes.com/blog/indian-textile-industry-the-silent-cash-cow/98537969

Indian Textile Industry: The Changing Landscape

8
major textile export destinations of India have been the United States of America and the European
Union. However, in FY 2022, the geopolitical tensions between Russia and Ukraine led to a rise in
inflation prompting a drop in demand for apparel from countries including the United States and
Europe. As a result, India’s export of textiles and apparel fell by 13.9 percent in FY 2023. 8

Abolishment of World Trade Organisation's Textile and Clothing

Quotas in 2005 and India’s Exports
Further, the Multi Fibre Agreement (MFA) and the World Trade Organisation's quota system governed
the international trade in textiles and clothing till 2004. The MFA and the quota system came to an
end on 1st January, 2005. This resulted in advantages as well as constraints for India, viz. I) The quota
system levied restrictions on cotton based fibres which lead India’s textile exports. Ii) Having a natural
comparative advantage in cotton and cotton based fibres, abolition of MFA was likely to help Indian
in cotton based textiles’ exports. 9

There was expectation that once system was abolished, Indian textile exports would expand
tremendously. On January 1st 2005, the World Trade Organisation's textile and clothing quotas were
abolished. The elimination of annual quotas on textiles and clothing in 2005, under the Agreement
on Textiles and Clothing (ATC) was expected to boost textile exports of major textile exporting
countries including India. However, the subsequent export gains were not significant and India’s
textile exports did not grow as expected on account of several factors.

Abolishment of the annual quota system set India free of the constraints on exports but also posed
many challenges. Despite huge competitive advantages, India faced increased competition and
absence of guaranteed markets. Further, India’s benefiting from abolishment of quota depended on
the extent to which the existing constraints were removed. Those constraints included strict labour
market laws and regulations, inadequate investment, and unfavourable government policy in the
past.

8
https://www.statista.com/topics/10855/textile-industry-in-india/#topicOverview
9
Greeshma Manoj, Export performance of Indian Textile Industry in the Post Multi Fibre Agreement Regime
October 2014Artha - Journal of Social Sciences 13(4):63

Indian Textile Industry: The Changing Landscape

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Textile Growth Trajectory Post 2005

• Post abolition of the quota system, though the value of India’s textile exports increased, its
share in world exports rose just to 5.7% in 2022 from 4.% in 2005.

India’s Export of Textiles

Post Abolition of Annual Quota In 2005
Value ($ Billion) Share in world exports (%)

2000 2005 2010 2022 2000 2005 2010 2022

India 5.09 7.85 13 19 3.6 4.1 5.1 5.7

Source: World Trade Statistical Review, 2001, 2006, 2011 and 2023, World Trade Organization

• Post abolition of the quota system, India’s textile exports rose from 2.69% in 2004-2005 to
23.14% in 2005-2006.

• However, in the later years, particularly after 2008 subprime crisis, India’s exports declined
due to the slowdown in the US economy and a major appreciation of rupee by 15% against
the US dollar. US being the single largest importer of Indian textiles and clothing, decline in
exports was inevitable.

• During 2011-12, India’s textile exports grew 26.23% y-o-y on a weaker rupee and a revival of
demand from key importers like the US and Euro Zone.

• Growth in exports could not be sustained in the consequent years due to several challenges
including:

o The structure of Indian textile industry with the longest and complex supply chain
leading to long of lead times and increased cos;

o High cost of logistics and stringent labour laws prompting Indian manufacturers to
shift to Bangladesh, US and the EU;

o High cost of cotton and low domestic demand on the domestic front adversely
impacting the industry 10

10
Greeshma Manoj, Export performance of Indian Textile Industry in the Post Multi Fibre Agreement Regime
October 2014Artha - Journal of Social Sciences 13(4):63

Indian Textile Industry: The Changing Landscape

10
The Changing Landscape – Where Does India Stand?
India - A leading exporter but needs to expand its share

Top 10 exporters of textiles, 2022

($ Billion)
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
China European India Türkiye United Vietnam Pakistan Chinese Korea, Japan
Union States of Taipei Republic of
America

Source: World Trade Statistical Review 2023, World Trade Organization

• Though a leading exporter of textiles in the world, the actual value of India’s exports stands
as low as $ 19 billion as of 2022. The value of textile exporters of China and the European
Union stand at $ 148 billion and $ 71 billion respectively in 2022. This underlines the
tremendous scope to expand the size/ value of Indian textiles exports. (Appendix 1 may be
seen.)

Indian Textile Industry: The Changing Landscape

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 Top 10 exporters of textiles:
Share in world exports
50.0

40.0

30.0
%

20.0

10.0

0.0
2000 2005 2010 2022

China European Union India

Türkiye United States of America Vietnam
Pakistan Chinese Taipei Korea, Republic of
Japan

Source: World Trade Statistical Review 2023, World Trade Organization

• While, the United states and Turkiye command a major share in the global export of textiles,
Indian exports make up just near 5- 10% of the global exports during the period 2000 to
2022.
• This underlines the scope for increasing global share in textile exports for India. (Appendix 1
may be seen.)

Indian Textile Industry: The Changing Landscape

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 Top 10 exporters of textiles: Annual percentage change
50 in export value, 2010-2023
45 China
40
European Union
35
30 India
25
Türkiye
20
15 United States of
America
10 Vietnam
5
Pakistan
0
2010 2021 2022 2010-23
-5 Chinese Taipei
-10
Korea, Republic
-15 of
-20 Japan

Source: World Trade Statistical Review 2023, World Trade Organization

• While the annual percentage rise in value of Indian textile exports stood at nearly 50% in
2021, there is consistent decile in the same if seen across 2022 and 2022.

• The annual percentage rise in value of Indian textile exports has confined to just 4% during
the period 2010 – 2022. (Appendix 1 may be seen.)

Indian Textile Industry: The Changing Landscape

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Countries that Indian Textile Industry Should Focus on to
Expand Global Market Share
Top 10 importers of textiles, 2022
($ Billion and percentage)
Value Share in world Annual percentage change
exports/imports
2022 2000 2005 2010 2022 2010- 2020 2021 2022
23
European 78 29.7 29.2 23.8 20.7 2 30 -10 -1
Union
Extra-EU 38 9.6 9.8 9.6 9.9 3 69 -26 1
imports
United 39 9.7 10.5 8.7 10.3 4 44 -12 -1
States of
America
Vietnam 19 0.8 1.6 2.6 5.0 9 -10 21 1
Bangladesh 15 0.8 1.1 1.7 3.9 10 -15 61 1

China 12 7.8 7.2 6.6 3.2 -3 -10 15 -25

Japan 10 3.0 2.7 2.7 2.5 2 34 -21 4

Türkiye 8 1.3 2.1 2.4 2.1 2 -15 22 25

United 8 4.4 3.5 2.7 2.0 1 54 -28 -3
Kingdom
Indonesia 8 0.8 0.4 1.6 2.0 5 -21 33 6

Mexico 7 3.5 2.8 1.9 1.8 2 -14 18 8

Above 10 203 61.7 61.1 54.7 53.6 - - - -

Source: World Trade Statistical Review 2023, World Trade Organization

In the recent years, India's textile export destinations have experienced a shift. The United States
now stands as the top export destination for India replacing EU – 27. Bangladesh stands as the third
important export destination for Indian textiles

Indian Textile Industry: The Changing Landscape

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 India's Top Ten Export Markets of
Textile & Apparel Products including Handicrafts
Country Export 2022-23 USD % Share
Million
USA 10,468 29%

EU-27 7,670 21%

Bangladesh 2,533 7%

UK 2,105 6%

UAE 2,087 6%

Sri Lanka 726 2%

Turkey 719 2%

Australia 657 2%

Saudi Arab 577 2%

Canada 572 2%

Sub-Total 8,570 23%

Total Textiles & Apparel

36,684 100%
(including Handicrafts) Exports

Source: DGCI&S(Provisional)

• The United States is the largest market for India's textile and apparel exports, while the EU-
27, Bangladesh, the UK and the UAE also have a considerable share.

Indian Textile Industry: The Changing Landscape

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Global Trend Favours MMF while India Focusses on Cotton Textiles
While the Indian textile industry traditionally focusses on cotton textiles, the global consumption
trend is dominated by MMF due to rising incomes and properties of MMF such as durability, flexibility,
and lower costs. Hence, it is imperative that India focusses on MMF along with cotton textiles to grab
a larger share in the global textiles market.

Accordingly, the Ministry of Textiles, Government of India has set up Textile Advisory Group on MMF-
an informal body in 2023 to study the issues pertaining to the value chain of manmade fibres. The
government has also issued a Quality Control Order (QCO) on import of Viscose Staple Fibre (VSF) in
2022 to check the sub-graded import of VSF.

India’s export of MMF textiles and apparel stood at $9.56 billion during FY 202122 and is expected to
grow further. 11

Though India is the second largest producer of polyester and viscose, it’s share in exports of MMF is
smaller as compared to that of China. Increasing market share in MMF is a challenge for India. Hence,
focus on R&D, quality control systems and international collaborations to develop new fibres,
fabrics, and efficient manufacturing processes is necessary. Further, initiatives to develop innovative
synthetic fibres to compete in the global MMF market while also focussing on MMF production
capabilities and efficiencies, capacity building, marketing can help. India needs to focus on
alternative, yet sustainable source materials such as bamboo; bamboo textiles are cheaper, light,
cool and soft with high moisture absorption capacity. 12

11
Annual Report 2022-23, Ministry of Textiles Government of India
https://www.investindia.gov.in/team-india-blogs/new-india-becoming-next-gen-global-textiles-
12

manufacturing-and-sourcing-hub

Indian Textile Industry: The Changing Landscape

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India’s share in global textile exports is facing a consistent decline. The key challenges to the Indian
textile industry lies in the changing global fibre consumption trends which are highly lilted in favour
of MMFs. Global trends in overall textile exports a rising demand for apparel made of MMF (50%),
while the share of the same in India’s textile exports stands at just around 20%. Currently, MMF
dominates global textile fibre consumption with a ratio of 72:28. However, India’s domestic fibre
consumption ratio is 40:60 i.e. 40% MMF and 60% natural fibre. 13

Hence, the government’s production-linked incentive scheme for MMF and can help in increasing
India’s share in global textile exports. Also, the Mega Investment Textiles Parks scheme can also go a
long way in making India a fully integrated, globally competitive manufacturing and exports hub. 14

The Policy Canvas and Opportunities

The government has created opportunities for stakeholders so as to enhance the textile exports
profile and the value of textile exports from India through several initiatives including the Make in
India initiative, launching and/ or supporting several textile projects, textile parks and the product
linked incentive (PLI) scheme.

Investment Opportunities in Indian Textiles &

Apparel Segment

Major Projects:

• $5.38 million, Parasia Textile Park in Mungeli District,

Chhattisgarh
• $1.26 million, Setting up of Handloom Production Unit
at HPC, Assam
• $0.38 million, Setting up of Handloom Production Unit,
Assam
• $0.38 million, Setting up of Handloom Production Unit,
Assam

Source: https://www.investindia.gov.in/sector/textiles-apparel

13
Shilpy Verma & Bhawna Kakkar, ‘How FPIS and MITRA Scheme will be a game changer for India’s textile
sector’, EPW: Vol. 57, Issue No. 41, 08 Oct, 2022
14
Shilpy Verma & Bhawna Kakkar, ‘How FPIS and MITRA Scheme will be a game changer for India’s textile
sector’, EPW: Vol. 57, Issue No. 41, 08 Oct, 2022

Indian Textile Industry: The Changing Landscape

17
Production Linked Incentive (PLI) Scheme
The Product Linked Incentive (PLI) Scheme for Textiles
aims to promote production of MMF apparel, MMF
Fabrics and Products of Technical Textiles by
incentivising the manufacturers.

The PLI Scheme has an approved outlay of Rs 10,683

crore. PLI Scheme has plans to attract investment of
around $ 2.5 billion and generate around 7.5 lakh
employment opportunities.

PLI Scheme targets creating a 60-70 global players out

of domestic manufacturers of MMF. Under the scheme
the government approves 64 applications. In case of
the approved 64 applications, the proposed
investment is INR19,798 crore and projected turnover
of INR 1,93,926 crore with a proposed employment of
2,45,362. Availing the scheme, a total of 12 companies
have proposed to set-up MMF projects in Madhya
Pradesh, 7 companies in Uttar Pradesh and 4 companies in Rajasthan. Towards the same, investment
worth Rs 2,183 crore has been made till July 2023.

Scheme for Capacity Building in Textile Sector (SAMARTH)

SAMARTH was launched enhance capacity and requirement for
skilled manpower requirement in the textile industry, under
the ‘Skill India’ initiative in association with the framework
adopted by Ministry of Skill Development and
Entrepreneurship.

PM Mega Integrated Textile Region and Apparel (PM MITRA)

PM MITRA scheme aims to setting up of seven PM Mega Integrated
Textile Region and Apparel (PM MITRA) Parks in Greenfield/Brownfield
sites across the country with world class infrastructure. The scheme is
based on expenditure $ 570 million for a period of five years. The
scheme has plans to boost the ‘Make In India’ initiative by attracting
investment and also to generate employment.

Indian Textile Industry: The Changing Landscape

18
The government of India aims to position India as a global textiles manufacturing hub by developing
a $ 250 billion textile Industry and attaining $ 100 billion in textile exports by 2030. 15 The government
has also allowed 100% FDI via automatic route in textile sector.

Some of the prominent foreign companies that have invested and have established manufacturing
facilities in India are Avgol (Israel), Hyosung (Korea), Perennials (USA), Lindstorm (Finland), and
Youngone (Korea), Nanliu (Taiwan), Kimberly Clark (USA) amongst others. Other key international
brands and retailers who have a base in India and are sourcing on various price points include H&M,
Zara, Uniqlo, PVH, Decathlon, Hugo Boss, Bestseller 16.

Handloom Clusters
9 Mega Handloom Clusters are currently under implementation in 8 States, viz. Assam (Sivasagar),
Uttar Pradesh (Varanasi), Tamil Nadu (Virudhunagar and Trichy), West Bengal (Murshidabad),
Jharkhand (Godda and neighboring Distt.), Andhra Pradesh (Prakasam & Guntur Dist.) and Bihar
(Bhagalpur) and Manipur (East Imphal). During the year 2022-23 (as on 21.11.2022), funds worth
Rs.11.21 Crore have been released for implementation of various interventions in Mega Clusters. 17

Existing Schemes and Policies

Ministry of Textiles has launched some flagship schemes such as Technology Upgradation Fund
Scheme (TUFS), Scheme for Integrated Textile Parks (SITP), Mega Cluster, Integrated Skill
Development Scheme (ISDS), etc. to the promote growth and development of the sector. To attain
the planned growth, these schemes are required scaling up as well as re-engineering and re-
calibration. 18

Free Trade Agreements (FTAs)

To boost exports, India has signed a free trade agreement with Australia in 2022 while it is presently
also negotiating FTAs and zero dusty policies with EU, Australia, UK, Canada, Israel and other
countries/ region.

This is expected to get price advantage to Indian textiles. Indian firms also get a level playing field
with firms from Vietnam and Bangladesh, whose products enter the EU and the US at zero duty. 19

15
Vision, Strategy and Action Plan for Indian Textile and Apparel Sector, Ministry of Textiles, Government of
India
16
https://www.investindia.gov.in/sector/textiles-apparel
17
Annual Report 2022-23, Ministry of Textiles Government of India
18
Vision, Strategy and Action Plan for Indian Textile and Apparel Sector, Ministry of Textiles, Government of
India
19
https://www.investindia.gov.in/sector/textiles-apparel

Indian Textile Industry: The Changing Landscape

19
Drawing Opportunities from Limitations of Other Players
• China’s share in international trade in textiles has
been stunted due to being constantly accused of
human rights violations and forced labour. In the
context, the US has implemented the Uyghur
Forced Labour Prevention Act in June 2022 while
the European Commission too has been strict
about such violations. 20

• Pakistan, known for its once booming textile

industry is witnessing a crisis in its textile industry.
The economic crisis and the floods that ravaged
the country in 2022 have hit cultivation of crops
including cotton. Pakistan's textile industry, which
accounts for nearly 60% of the country's exports,
is also adversely impacted by competition from other Asian countries, as well as its own
economic slowdown and political instability. Hit by inflation, textile companies have to bear
a considerable increase in the cost of capital due to interest rates rising above 20%. Further,
due to the government's policy of holding on to foreign exchange reserves, imports stood
frozen and importing materials for textile industry became challenging. 21

Challenges
• A major reason behind Indian textile industry’s inability to grow to its full potential is the scale.
Indian manufacturers cannot compete with those from Bangladesh, China or Vietnam on
account of production inefficiency due to its small scale and inability of small producers to
adopt modern technology.

• Most of the manufacturers operate as small and medium enterprises on account of restrictive
labour laws. Labour laws require an amendment and updating for the sector to grow.
Reforming around 44 old labour laws drafted in last century require repealing and replaced
by one those suited to current times and circumstances.
• Attracting investments is challenging. The industry should be more attractive enough for
investors. It requires $ 180 -200 billion investments for attaining the production volume of
about $ 650 billion by 2024-25. This constitutes a major challenge. It requires returns on

20
https://retail.economictimes.indiatimes.com/blog/indian-textile-industry-the-silent-cash-cow/98537969
21
https://retail.economictimes.indiatimes.com/blog/indian-textile-industry-the-silent-cash-cow/98537969

Indian Textile Industry: The Changing Landscape

20
 investments to appear attractive enough and investors need to be incentivised. Further,
maintaining a competitive exchange rate is also necessary.

• Inducing entry of new players, through start-ups as well as through FDI is necessary and
challenging. This requires adequate policy attention.

• Enhancing skill quality and productivity is necessary. Initiatives on skill development through
the Textile Skill Sector Council need scaling up and recalibration. The industry should have
ample availability of trained, skilled and certified manpower next 3 – 5 years.

• The sick textile mills have left a scar on the industry. Despite nationalization of 103 sick textile
mills and transfer of the same to the National Textile Corporation (NTC) under the Sick Textile
Undertakings (Nationalization) Act, 1974, proper rehabilitation and reorganization of sick mills
could not be accomplished. THE NTC continues to makes losses year on year while production
at these mills could not be augmented. Further, under the amendment to Act in 1995, the
NTC sold the mills’ land to develop commercial and residential buildings in Mumbai.

Outlook
Growth

The Indian textile and apparel industry is expected to grow at 12% CAGR to reach $ 250 billion by
2030. The government of India aspires to achieve 20% growth in textile exports over the next decade.
This requires the domestic industry to grow at a 12% CAGR in domestic sales and attain a production
level of $ 350 billion by 2024-25 from the current level of around $ 100 billion. With a 20% CAGR in
exports India would be positioned to export textiles and apparel worth $ 300 billion in 2024-25. If the
set levels of growth in exports are achieved, India is expected to have a market share of 15% to 20%
of the global textile and apparel trade. 22

Diversification of Exports – Both Product wise and Market wise

Indian exports of textile and apparel products are growing but have been confined to a few countries.
The US and EU have been the major export destinations taking up 50% share of the Indian export
market.

The goal of attaining higher exports can be realized if India diversifies exports to new export
destinations as well as by promoting new products that are different than the traditional products.
Customized strategies in this direction can be evolved for including Japan, China, Brazil, Russia, etc.

22
Vision, Strategy and Action Plan for Indian Textile and Apparel Sector, Ministry of Textiles, Government of
India

Indian Textile Industry: The Changing Landscape

21
The product s could also be customized taking into account the demand in the new markets. (Refer
Tables 1 & 2)

Innovation and R&D

Indian textile industry, being known known for its traditional products Promoting Innovation and
R&D is necessary as. India is yet to make its mark globally in terms of with brands, chains, products
and processes. Without innovation and R&D this would not happen. Government, industry and stake
holders should collaborate and work on business process innovation, building brands and creating
designs.

Environmental and Labour Concerns

Further, environmental concerns also need to be taken into account to sustain a leading global
exported and promote eco-friendly products, processes and production.

Further, following labour concerns and abiding by restrictions concerning child labour, India should
be able to attain the goals of growth set out by the government and stakeholders.

Indian textile industry caters to domestic market but depends heavily on export support. A decline
in export share impacts the industry. Hence, the industry needs to strike a delicate balance between
domestic and foreign markets. 23

Since mid-2021-23, the industry has been witnessing declining exports, and as of April 2023, there is
no rise in exports. The war between Ukraine and Russia as well as slowing global growth and inflation
has led to decline in foreign demand. Though situation is likely to improve in 2024, the United states
remains the major export market for India followed by EU-27, Bangladesh, and the UAE also holding
significant shares. 24

Thus, the state of Indian textile industry prompts that focus of policy makers and stakeholders should
be to enhance exports, strengthen support for exports, to explore new markets and to devise a new
product mix. Emphasis on man-made fabrics is also necessary vis -a- vis the traditional textiles.
Adjusting to the changing landscape and addressing the related challenges, Indian textile industry
needs to enhance its potential, both domestically and internationally.

23
https://www.dfupublications.com/categories/article/a-challenging-landscape-for-indian-textile-apparel-exports
24
https://www.dfupublications.com/categories/article/a-challenging-landscape-for-indian-textile-apparel-exports

Indian Textile Industry: The Changing Landscape

22
Appendices
Top 10 exporters of textiles, 2022
($ Billion and percentage)
Value Share in world exports/imports Annual percentage change
2022 2000 2005 2010 2022 2010-23 2020 2021 2022

China 148 10.3 20.2 30.4 43.6 6 29 -6 2

European
71 33.4 32.5 25.3 21.1 1 -3 14 -3
Union
Extra-EU
25 11.5 11.3 9.0 7.4 1 -9 16 0
exports

India 19 3.6 4.1 5.1 5.7 4 -12 48 -13

Türkiye 15 2.4 3.5 3.5 4.3 4 -1 30 -4

United
States of 14 7.0 6.1 4.8 4.1 1 -15 15 5
America

Vietnam 11 0.2 0.4 1.2 3.2 11 8 17 -6

Pakistan 9 2.9 3.5 3.1 2.6 1 -8 29 -5

Chinese
8 7.6 4.8 3.8 2.5 -1 -17 21 -2
Taipei
Korea,
Republic 8 8.1 5.1 4.3 2.4 -2 -15 12 -5
of

Japan 6 4.5 3.4 2.8 1.8 -1 -14 11 -4

Above 10 309 80.0 83.5 84.5 91.1 - - - -

Source: World Trade Statistical Review 2023, World Trade Organization

Indian Textile Industry: The Changing Landscape

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 India’s Textile Exports (Principal Commodity wise): 2017-18 to 2022-23

(USD Million) 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

Readymade
16,707 16,138 15,488 12,272 16,015 16,192
Garment
Cotton
11,212 12,405 10,263 11,128 17,166 11,083
Textiles
Man-made
5,413 5,551 5,324 4,180 6,294 5,411
textiles
Wool &
Woollen 187 222 181 109 166 205
textiles

Silk Products 69 76 72 76 109 94

Handloom
356 344 319 223 269 182
Products
Carpets 1,430 1,482 1,373 1,491 1,790 1,366

Jute Products 350 340 357 397 537 462

Total Textile &

35,723 36,559 33,379 29,877 42,347 34,995
Apparel

Handicrafts 1,823 1,838 1,798 1,708 2,088 1,689

Total T&A
including 37,546 38,397 35,177 31,585 44,435 36,684
Handicrafts
Source: DGCI&S (Provisional)

Indian Textile Industry: The Changing Landscape

24
* Views are personal.

CONTACTS
Dr Kaveri R Deshmukh
Associate Director – Research

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