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India is the world’s second largest producer of textiles and garments and the world’s third largest producer of cotton after China and the USA. The Indian market is also the second largest in terms of consumption of Cotton, after China.

One of the oldest and the largest textile industries in the world, the Indian textile industry is currently estimated at US$150 Billion as of December 2018 and is expected to reach US$ 250 Billion by the year 2019. The Indian textiles industry, carrying hand-spun and hand-woven textile sectors at one end of the spectrum and capital intensive sophisticated mills sector at another end of the spectrum, is extremely vast and varied. The Indian textile industry contributed 7 percent of the Indian industry output in the year 2017-2018. Known to be the second-largest employment generating sector in the country, the Indian textile sector contributes to 2 percent of the country’s GDP and provides direct employment to more than 45 million people. The financial year 2018 took the Indian textile exports to US$ 39.20.

The growth in building and construction is expected to raise the demand for non-clothing textiles. Following factors work as the strengths of the Indian textile industry-

  • The remarkable increase in the income levels of the Indian population
  • Abundant availability of raw materials such as cotton, wool, silk, and jute result in a continuous increase in the demand in the Indian textile industry
  • Easy access to low cost and skilled manpower offering a competitive edge to the industry
  • Better assistance in terms of building market entry strategy for global organization by the management consulting firms in India

The fundamental strength of the Indian textile industry is its strong production base with a wide range of fibers and yarns. These are natural fibers such as cotton, jute, silk, wool, and synthetic and man-made fibers like polyester, viscose, nylon, and acrylic. The textile industry is capital and technology-intensive comparable with automobiles, aircraft, computers, and heavy machinery industry. Buyer-driven value chains enhance trade-led industrialization, which has become common in labor-intensive, consumer-goods industries and consumer electronics.

In comparison with other countries like China, the cost of textile production in India is quite less. Due to this, the Chinese textile manufacturers have lost the competitive advantage of lower cost of production. This, as a result, offered an opportunity to the Indian textile sector to overtake the market share of China in the developed world, especially in the European Union and the United States, both comprising of around 60 percent of the global export market.

Considering this, the Indian government took certain measures to further enhance the Indian textile industry and promote mergers and acquisitions in India. Some of the major investments in the Indian textiles industry are as below-

  • 100 percent Foreign Direct Investment has been allowed in the Indian Textile sector. Moreover, free trade with ASEAN is allowed in order to boost exports in the country.
  • The Indian government is making huge investments under the Scheme for Integrated Textile Parks (SITP) and Technology Upgradation Fund Scheme to encourage more private equity in order to train the workforce.
  • The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme for capacity building in the textile sector with an outlay of US$ 202.9 Million from 2017-18 to 2019-20.
  • The Future Group is planning to open 80 new stores under its affordable fashion format, FBB and is targeting the sales of 230 million units of garments by March 2018, This number is further expected to grow to 800 Million units by the year 2021.
  • Max Fashion, a part of Dubai based Landmark Group, plans to expand its sales network to 400 stores in 120 cities by investing the US $60 Million in the next 4 years.

To conclude, programs like Skill India and Make-in-India, along with continuous development and growth in the management consulting firms in India for foreign companies, is working in favor of the developments in the Indian textile industry. The access to skilled manpower and a good market for textile products, the industry is becoming competitive in the global market. With proper market entry strategy for global giants in the market, the future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand.


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