Textiles & Apparel Industry – India enjoys a unique advantage of having abundant raw materials and presence of manufacturing in all segments of the textile value chain but it’s yet to become the most favoured destination for sourcing by International Brands. The Textile & Apparel industry is one of the largest and the most important sectors for the Indian economy in terms of output, foreign exchange earnings and employment.
It also provides direct employment to over 45 million people and is the second largest provider of employment after agriculture.
As per the WTO in its World Trade Statistical Review 2018, India is ranked as 5th largest exporter of Ready Made Garments (RMG) in the world. Given that Ready Made Garments manufacturing units can be viable at all size levels, particularly because of low cost of plant and machinery, the units range from small to large.
Consequently, the RMG sector continues to be dominated by unorganised players. However, the branded apparel market has made inroads in the past few years.
The decentralised power looms and knitting sector forms the largest section of the textile sector.
The major sub-sectors that comprise the textile sector include the organized cotton/manmade fiber textile mill industry, the manmade fiber/filament yarn industry, the wool & woollen textile industry, the sericulture and silk textiles industry, handlooms, the jute & jute textiles industry and textiles exports.
As per the data, Indian Textile industry is one of the largest in the world with a large raw material base and manufacturing strength across the value chain.
India is the largest producer and the second largest exporter of cotton in the world. India is also the leading consumer of cotton. Domestic Textile and apparel industry contributes 2% to India’s GDP and accounts for 14% of industrial production, 27% of the country’s foreign exchange inflows and 13% of country’s export earnings with huge potential to grow. This sector is all the more important because it’s dominated by women workers, with 70% of the workforce being women.
To me this is one sector which can uplift rural women from abject poverty and also goes with the empowering women in the larger interest of India. If we look closely, the Indian textile and apparel sector, the sub sectors of weaving, processing and garmenting are fragmented and lacking the requisite scale for success in global markets. Most of the manufacturing units have small capacities and low manufacturing efficiencies which make it difficult for them to compete in global markets.
At 50% of world production, India is the largest producer of raw jute and jute goods in the world. The Mill sector, with 3,400 textile mills having installed capacity of more than 50 million spindles and 842,000 rotors is the second largest in the world. As far as cotton is concerned, India is the second largest producer and exporter of cotton in the world at $6.3 billion, marginally close to China.
India has emerged as the largest producer of cotton in the world with the production of 345 lakh bales in 2016-17 and second largest exporter after China. Currently, the cotton industry is sustaining livelihoods of 5.8 million farmers and 40-50 million people engaged in other activities like processing and trading.
Silk which is one of the most important parts of textile value chain,India is the second largest producer of silk in the world, producing around 18 per cent of the world’s total silk. Mulberry, Eri, Tasar, and Muga are the main types of silk produced in the country. It is a labor-intensive sector. In India, textiles have evolved over a period of thousand years.
They are important for their attachment with the culture, which has been shaping Indian societies for hundreds of years. The history of the textiles dates back to the period when the Indian subcontinent did business with Kabul, the Balkans and the European countries.
The domestic demand for textiles is likely to remain robust from end-user segments, supported by a strong rise in private consumption expenditure during the rest of FY19. We have seen in past four years, there have been serious efforts and measures taken by the government like allowing 100 per cent FDI and Technology Upgradation Fund Scheme to accelerate textile industry’s growth.
But the industry needs to take initiatives to focus on innovation and value addition for improving global competitiv-eness. We have to come up with innovative and exclusive products if we desire to expand our footprint in the global arena. The continued growth and global competitiveness of the textiles industry can drive the economy to new heights.
Most of the international brands like Marks & Spencer, JC penny, and Gap acquired major portion of their fabrics from India. According to a report, the Indian Textile Industry covers 61 per cent of the international textile market and over 20 per cent of the global market. The domestic demand for textiles is likely to remain robust from end-user segments, supported by a strong rise in private consumption expenditure during FY20.
Also, textile exports are likely to rise, with apparel exporters benefitting from the depreciation of the Indian rupee against the US dollar. The Indian rupee depreciated at a higher rate against the US dollar over April-August 2018 than the currencies of key apparel-exporting nations, as per India Ratings and Research.
The rating agency has maintained a stable outlook for the cotton and synthetic textiles for FY19. It is expected that the overall credit profile of the sector will gradually improve.
As of now, it looks that the sector profitability is likely to improve gradually, with players passing on increased raw material prices to end-users, given the healthy demand, a depreciating rupee and waning impact of the structural issues.
However, the positive impact of improved demand and profitability may be partly countered by sticky working capital requirements also.
One of the critical areas where the sector needs to improve is the supply chains and internal systems, focus on research and development, cost optimisation (saving cost by vertical integration, etc.) and scaling-up to achieve greater competitiveness and command a higher share in the production and export of top items traded in global markets.
We have seen in recent past that India’s export performance has not been up to expectations for a variety of reasons. It cannot be business as usual and the industry has to rise to the occasion and ensure that the share of India’s exports increases by diversification in products and explore newer markets.
Immediate steps that need to be taken by Industry are to discard outdated technology and modernize its machinery to be globally competitive.Over the last few decades, the textile industry has seen a facelift globally. Although the original machines and their processes are still being used, they have evolved into more technologically-advanced versions of the originals. Now, the machines that used to be worked manually by skilled labourers can be computerised and programmed to make the needed textile materials.
There have been innovations like later printing on paper, textile machines have been made to laser print onto clothing, like jeans and shirts. Designs are created on material more quickly and are more precise. Layered printing has also been translated into clothing, which makes designs more complex.
Although mostly found only in the high fashion community right now, 3D-printed textiles are now being used to create clothing. Companies like Nike are finding ways to use this technology to make innovative shoes. The hope is that, eventually, 3D printing will be used on thinner and resilient fibers to make actual, soft clothing.
Nanotechnology is the newest innovation and is still in the beginning stages. The textile industry is looking to use nanotechnology to create more scientific clothing, like water-repellent, self-cleaning, and fire-repellent items. Nanotechnology will also allow the textile industry to make products at lower energy thresholds, which helps to sustain the environment.
Quality has to be the mainstay for India to sustain exports in the global market especially when we are facing stiff competition from countries like Bangladesh and Vietnam. With rising income levels, steady growth of the retail industry, the textiles sector is expected to experience a high growth trajectory in future due to strong domestic consumption as well as increasing demand in global markets.
Business leaders around the world have India in their sights. Several major international apparel and manufacturing players have invested in India already. These include textile machinery manufacturers Rieter and Trutzschler, and vertically integrated fashion brands like Zara and Mango (Spain), Promod (France), Benetton (Italy), Esprit, Levi’s and Forever 21 (USA).
Affordable raw material and labour, great strides in textile technology could together make India not only a preferred but a formidable destination for foreign investment in the textile and garment business. From the standpoint of the luxury fashion sector, what is particularly interesting is that the other half of India’s textile story is about handlooms, a subsector which could play a big role in forging the global luxury industry ahead. Industry’s focus should be to recreate the inherent talent of Indian weavers which has been dying out and forefront, trickling down to everyday wear.
A growing economy, rising disposable income and the growing aspirations of Indian consumers is expected to drive growth in the Indian Textile & Apparels industry. Also, it uses different materials such as cotton, jute, and wool, silk, man-made and synthetic fibres. We must remember that how Khadi, a handspun fabric that became Gandhi’s symbol of self-sufficiency during the British Era.
It is a tour de force in the textile sector, providing the perfect context for a meaningful discourse even in today’s time.It narrates a universal tale of how a handmade fabric can find heart-touching reference in today’s highly volatile and fast paced global fashion Industry.
All stakeholders must continue making their sustained efforts to effectively position India as the main source for textile items ranging from raw materials to finished products and handicrafts for the Global Market.
It will not only help grow economy but also facilitate inclusive and sustainable economic growth by empowering women entrepreneurs.
(The author is Principal Director, PH.D Chamber of Commerce and Industry New Delhi, email ranjeetmehta@ gmail.com)
Courtesy : Ministry of Labor