Overview
The Indian textile industry in India was estimated at more than US$ 100 billion in the fiscal year 2020. Globally India’s textile industry can produce an extensive variety of products suitable for diverse market shares. It is the second-largest employment generator, employing nearly 97 million people including manufacturers, suppliers, wholesalers, and exporters of Cotton textile, Handlooms, Woolen textile, and manufacturers of textile machinery and equipment, dyes and raw materials, delivery of finished textile, fabrics, and garments.
The textile industry indirectly contributed approximately 5 % to GDP and nearly 14 % to the overall Index of Industrial Production (IIP).
Source: TextileValueChain
The largest component in the Indian textile industry is the decentralized power looms/ hosiery and knitting sector. In 2019 India’s textile industry contributed 7 %of the industry output which in turn contributed to 2% to the GDP of India. In the fiscal year 2019, the domestic textile and apparel market reached an estimated US$ 100 billion.
In 2020 the production of raw cotton in India is expected to have touched 36.04 million sales. During 2019, the production of fiber in India stood at 1.44 million tonnes MT and reached 1.60 MT in 2020. On the other hand, yarn production reached 4,762 million kgs during the same period.
Textile Industry in India remains to be ruled by cotton, considering nearly 3/4th of the total fiber consumption in the country. Global Textile Trade rose at $1300 billion.
Due to the economic recession of 2020, the textile industry has witnessed many losses but is recovering from those losses over time. By 2020, the global textile and apparel trade is estimated to grow from the current $510 billion to reach $1 trillion.
Import and Export of Textile Industry in India
Due to the outbreak of the Covid-19 in 2020, the manufacturing industries have been hampered severely. The strict lockdown measures have also not been easy on the import and exports of our country. In 2019 the textile sector contributed 15 % to India’s export earnings. Furthermore, it will be challenging for the Indian apparel exporters to resume trade as nearly 60% of the country’s apparel exports are reserved for the European and American markets.
As per the domestic segment, the pandemic has led the Indian market to have a very low consumption by the consumers as everyone is obligated to stay at home. Especially luxury fabrics have seen a considerable loss of demand from the consumer segment in 2020.
Source: ORDNUR
A report by Wazir Advisors, Impact of COVID-19 Scenario on European and the US Apparel Market – determines that the combined apparel consumption of the EU and the US might witness a drop of nearly US$ 308 billion, which is 40-45% lower than the 2020 projected consumptions.
In September 2019, textile export saw a 6.2 % rise after GST. The Directorate General of Foreign Trade (DGFT) has updated rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of the textile Industry readymade garments and made-ups from 2% to 4%.
During the fiscal year 2018 to 2020, the Indian Government published a special package of US$ 31 billion to encourage export, generate one crore job opportunity, and attract investment worth Rs 80,000 crore. As of August 2018, it created an additional investment of Rs 25,345 crore and exports of Rs 57.28 billion. The textile sector has seen a rise in investment during the last 5 years. The industry attracted Foreign Direct Investment (FDI) worth US$ 3.44 billion from April 2000 to March 2020.
Source: Examrace
Following the Union Budget 2020-21, a National Technical textile Mission is proposed for a period from 2020-21 to 2023-24 at an expected outlay of Rs 1,480 crore.
Source: Business standard
In 2020, New textile Policy 2020 is expected to be published by the Ministry of textile.
Top 5 Textile Companies in India
Arvind Ltd
Arvind Ltd is one of the largest Textile Companies in India accountable for Rs 7.2 crores revenue with 240 MMPA processing capacity. The Company owns 22 global patents for environmental solutions and has the largest fire protection fabric producer in the country. It is headquartered in Ahmedabad, Gujarat. Along managing 15 global apparel brands like Tommy Hilfiger, US Polo, CK, GAP, Nautica, and Sephora.
Vardhman Textiles Ltd
Vardhaman Textiles is the second largest textile company in India with revenue worth Rs 6,706 Cr. This company is primarily involved in the manufacturing of Yarn, Fabric, Acrylic Fibre, Garments, Sewing Threads, and Alloy Steel. It has its branches across 75 countries globally. Vardhman is one of India’s largest textile manufacturers, with driving market share and a sustainable business model.
Welspun India Ltd
Welspun India is the third-largest textile company in India in terms of sales. The Company’s manufacturing facilities, located in India, are implemented to produce high-quality merchandise to international standards. Currently, over 70% of the market for advanced textiles comes from exportations from other countries.
Raymond Ltd
Raymond is a diversified group and is the fourth-largest textile company in India with a processing capacity of 110 MMPA. Also, the group produces ‘The finest fabric in the world’. Raymond is a leading professional in Shirting fabrics and is the No.1 brand in the OTC space.
Covid-19 and the Textile Industry in India
As we go through the most financially challenging times due to the Covid-19 pandemic, many industries have been disruptively affected witnessing major losses. Sectors like aviation, hotels and restaurants, tourism and etc. The textile manufacturing industry is also one of those sectors.
Source: Indiancompanies.in
Due to the pandemic induced lockdown, there has been difficulty with the availability of raw materials leading to slowing down the production process.
At present, menswear contains 43%, a significant share of the Indian apparel market, and is further expected to grow by 9% followed by the Womenswear expected to grow by 12% and reach 43% by 2020. The kidswear market is emerging as well with 10% predicted growth for boys and 11% for girls.
By 2020, The home textile sector is foreseen to grow from `15, 570 crores at a CAGR of 9%, and reach `40, 000 crores. The availability of sources from other developed countries acts as a stimulant to the growth of the Indian textile industry.
Source: Globalapparelandtextile
With the consumers focusing more on groceries and medicines, the market for non-essential goods and services like clothes has dropped affecting the prospects for enterprises and economies.
However, the demand for Hygiene textile has gone up. This means apparel products and textiles and etc will have in-built hygiene in them which will draw the consumers towards purchasing these products thus regaining financial stability for the industries.
Summary
The future for the Indian textile industry is estimated to recover by witnessing an increase of domestic consumer demand along with its exportation. Whereas, the Western countries are now shifting focus towards the Asian countries for their textile and apparel business. The retail industry has experienced rapid growth in the prior decade with the entrance of various international like brands Marks & Spencer, Guess, and Next into the Indian market. The Amended Technology Up-gradation Fund Scheme (A-TUFS), an initiative taken by the Indian Government is estimated to create employment for 35 lakh people and enable investment worth Rs 95,000 crore by 2022.