The Indian textile industry is one of the most vital industries of the Indian economy. Not only it contributes significantly to the country’s Gross Domestic Product (GDP), but also provides employment to a large number of people. Over the years, it has seen phenomenal growth and has succeeded in attracting a fair amount of foreign direct investment (FDI). The industry is quite diverse and plays an important role in generating revenues to bolster the economy.
Understanding the importance of this industry, Government of India (GoI) has a dedicated ministry – Ministry Of Textiles – which is responsible for formulating and implementing policies for the growth of the sector. Over the years, the ministry has come up with several policies and schemes which have fuelled growth of the textile industry.
Exports in this sector have witnessed a massive growth after the quotas under Multi-Fibre Agreement (MFA) were removed. According to a white paper by the Federation of Indian Chambers of Commerce and Industry (FICCI) and research firm Technopark, the size of India’s textile and apparel industry is expected to grow at a CAGR of 9.5% to reach USD$223 billion in 2021 from USD$89 billion in 2011. Now, that is quite huge.
India’s textile and apparel exports have been growing at an annual rate of 10% since 2005. The country’s textile products are exported in more than 100 countries with the US and EU accounting for more than two-thirds of exports. The other major markets are China, Bangladesh, Brazil, Saudi Arabia, Canada, Sri Lanka, Egypt, Pakistan and Hong Kong.
The road ahead looks quite bright for the industry. Since liberalization, India has attracted buyers from all over the globe. There is major interest among established players around the globe to foray into the Indian textile and clothing sector. The country has seen giants like Marks and Spencer, Little Label, Castle etc opening their liaison offices. Retailers all across the globe are looking constantly to increase their sourcing from the Indian markets. This has fuelled demand manifold, and Indian manufacturers are working towards enhancing their existing capacities. This augurs well for the sector.
India is also progressing considerably well with the “India-EU Broad-based Trade and Investment Agreement (BTIA)”, which if finalized, would open up new avenues for the textile sector in EU countries. This would further fuel the growth of the industry. The handloom sector has been the most vulnerable segment among the textile industry. GoI’s decision to offer a whopping
Rs 3,884 crore package for waiver of loan of individual weavers and handloom cooperatives will not only revive the handloom industry, but also boost the overall growth of the textile industry in the country.
The Government’s decision to extend the Technology Upgradation Fund Scheme (TUFS) in the 12th Five-Year Plan is also a positive news for the industry. TUFS is a scheme for technological upgradation in the textile sector. Ever since it was launched in 1999, the scheme has attracted investments of more than Rs 2.53 lakh crore. In this age, it is extremely important to be ahead in technology to stay competitive in the market. However, there are certain problems – such as labor, manufacturing competitiveness – which need to be solved. Overall, the future for the industry looks bright and it is anticipated that in coming days, the sector will contribute more for the growth of the economy.