Ailing India's Textile Industry

Context

Despite its large size, India’s textile industry has struggled with slow growth in recent years.

Current state of India’s textile industry

India is the sixth-largest exporter of textiles globally, contributing 21% to the country's total exports in 2023-24. The sector holds a 4.5% share in global trade, with the United States and European Union accounting for47% of India's textile and apparel exports.
It employs over 4.5 crore people, with a significant portion of the industry focused on small and medium enterprises (MSMEs) across specialized hubs like Bhiwandi (Maharashtra), Tiruppur (Tamil Nadu), and Surat (Gujarat).
Cotton Production: India is the second-largest cotton producer globally, contributing to 24% of the world’s cotton output. Cotton cultivation employs about 60 lakh farmers, especially in Gujarat, Maharashtra, and Telangana.
Man-Made Fibres (MMF): India is the second-largest producer of synthetic fibres, with Reliance Industries and Grasim Industries leading production. However, MMF consumption per capita in India is low compared to countries like China and the U.S.
Growth and Exports:
- India’s textile and apparel industry contributes 13% to industrial production, 12% to exports, and 2% to GDP.
- Exports were stagnant, reaching $34.1 billion in FY24, only slightly higher than $33.4 billion in FY20.
- India’s exports face tough competition from countries like China, Vietnam, and Bangladesh, which benefit from lower production costs, vertically integrated supply chains, and simpler regulations.

Challenges:

Production Costs: High production costs, particularly in cotton and MMF, reduce India’s export competitiveness. Raw materials like polyester and viscose fibres are more expensive in India compared to China.
Fragmented Supply Chain: India’s cotton supply chain is fragmented, leading to higher logistical costs and inefficiencies.
Complex Regulations: India’s textile exporters face complicated customs procedures, unlike competitors in countries with free trade agreements and simpler regulations.

Sustainability Concerns:

Global demand for sustainability is rising, and the textile industry must comply with stricter environmental standards. The EU’s new regulations on sustainability pose challenges, especially for small enterprises.
India is looking at a growing textile recycling market, but the shift to sustainable production methods is costly and challenging for smaller firms.
Fashion waste is a global issue, and India, like others, needs to address textile waste recycling to meet future sustainability goals.

PM MITRA: Pradhan Mantri Mega Integrated Textile Region and Apparel: The PM MITRA scheme focuses on establishing Mega Integrated Textile Regions and Apparel Parks across India to stimulate investment, innovation, and growth in the textile sector.
Production-Linked Incentive (PLI) Scheme: The Production-Linked Incentive (PLI) Scheme is a strategic initiative aimed at boosting domestic manufacturing and reducing imports within the textile sector. It incentivizes companies based on their cumulative sales of domestically manufactured goods, specifically targeting man-made fiber (MMF) apparel, MMF fabrics, and technical textiles.
Samarth Initiative: The Samarth initiative is a flagship skill development program led by the Ministry of Textiles, designed to enhance skills across the textile sector.
- This demand-driven and placement-oriented scheme aims to train 10 lakh individuals from 2017 to 2020, focusing on the entire textile value chain, excluding spinning and weaving.
National Technical Textiles Mission (NTTM): Launched in 2020, the National Technical Textiles Mission (NTTM) focuses on enhancing technical education, promoting research and innovation, and expanding market growth within the technical textiles domain over a four-year period.
Bharat Tex 2025: It was India's largest global textile event. Bharat Tex 2025 served as a platform to accelerate the government's "Farm to Fibre, Fabric, Fashion, and Foreign Markets" vision.

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