The textile and apparel industry has emerged as one of the largest contributors to the Indian economy. It contributes 2% to India’s GDP and employs over 45 million people. The industry has witnessed impressive growth over the past few decades and is continuously adapting to evolving market dynamics. Let us deep dive into various aspects of this labor-intensive sector.
Market Size and Growth Trends
The Indian textile industry is estimated to be worth around $150 billion. Its market size is expected to surpass $250 billion by 2025 driven by strong domestic demand and increased exports. The sector is growing at a CAGR of over 7% and its contribution to total exports in FY20 stood at approximately 12%. Demand for manmade fibers is growing at a faster pace than cotton due to higher demand from technical textiles and apparel segments. Polyester and viscose fibers account for over 60% of the total fiber consumption in India currently.
Key segments and contributions
The industry comprises several key segments including spinning, apparel, garmenting, manufacturing technical textiles, and home textiles. The apparel segment contributes around 31% to the industry, home textiles 20%, and technical textiles is growing at 15-20%. The industry is strengthening its presence across domestic and international markets through a mix of organic and inorganic growth strategies by major players. Rising affluence, evolving lifestyle trends, and growing fashion consciousness among India’s youth will act as major demand drivers going forward.
Manufacturing capabilities and Exports
India ranks 3rd globally in production of manmade fibers and yarns. It is also the world’s 2nd largest producer and exporter of cotton, accounting for 24% of global cotton acreage. Overall textile exports stood at $38 billion in FY20 with major export destinations being USA, EU, UAE, and Bangladesh. The sector is entering new export markets like Chile, Peru to boost overall shipments. To maximize export potential, the industry is working towards creating a robust value chain infrastructure along with product diversification into high-value segments. The Atmanirbhar Bharat initiative is also enabling higher value addition through reduced imports and indigenous innovation.
Technological Developments
The Indian textile and apparel industry has transformed significantly with the adoption of advanced technologies across the manufacturing spectrum. Robotics, AI, IoT, and Industry 4.0 trends are being leveraged to enhance productivity and produce unique fabrics. Digital marketing solutions and omnichannel retailing models are strengthening direct consumer connect and capturing untapped global demand. Major units have already automated critical manufacturing processes using digital solutions. Several technology upgradation and modernization initiatives have been undertaken to bolster sustainable growth and improve environmental performance. Successful public-private initiatives like the MITRA parks will create globally competitive integrated textile regions.
Policy Support and Initiatives
The Government plays a pivotal role in developing the textile industry value chain through focused incentives and reforms. Key schemes include the Technology Upgradation Fund Scheme (TUFS), Scheme for Capacity Building in Textiles Sector (SCBTS), Scheme for Integrated Textiles Parks (SITP), and Mega Textile Parks. A Production Linked Incentive (PLI) scheme has been launched for manmade fibers and technical textiles. This aims to boost sustainable investments, manufacturing, and exports worth $40-45 billion over 2025-26 and 2030-31. Special affordable credit lines are also sanctioned to strengthen domestic value chains. Free trade agreements with major economies will enhance international access and viability of the “Make in India” program.
Favorable outlook for growth
Textiles and apparel being prominent employers will play a vital socio-economic role in the post-pandemic recovery phase. Strong policy incentives, investments in infrastructure and new technologies point to significant future potential. Healthy projected growth in domestic income and consumption, alongside rising exports, provide an ideal platform for industry stakeholders to capitalize. The sector's inherent strengths, reduced duties, and emerging export opportunities will make India a key manufacturing and exporter hub. A goal of $100 billion textile exports by 2030 looks well within reach given the committed reforms and strategies towards developing these value chains across the length and breadth of the nation.
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