Indian textile market to see strong growth with the government support

Textile & Apparel sector in India is an important contributor to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings, contributing 4% to India’s GDP in 2012, the sector has also attracted direct foreign investments worth USD 1.11 billion from April 2000 to February 2014.

Currently, the overall textile and apparel sector accounts for about 24% of world’s spindle capacity and 8% of global rotor capacity and is expected to touch USD 223 billion by 2021.

The key driver of the growth of this segment is the growing population; the most significant change has been seen in the demand of man-made fiber production which recorded an increase of 4% during the period from April 2013 to February 2014. Furthermore, the apparel market in India saw a rise in cotton yarn production of about 10% during the same forecast period. The total cloth production by the mill sector registered 9% growth and cloth production by loom and hosiery increased by 2% and 9% simultaneously.

Driven by the increased consumer demand for quality products, the organized apparel segment is also expected to experience growth at a CAGR of more than 13% in the coming years. India is already a leading player in the textile and apparel sector.

The changing lifestyle, increased focus on quality, rising disposable income as well as greater export demand is fuelling the demand for textile products in India. The diverse range of products and vertically integrated supply chain will also act as some of the major drivers that will contribute towards the growth of the sector.

The recent proposed hike in FDI limit in multi-brand retail will also encourage investments from international players in the sector, which is expected to be worth USD 220 billion by 2020. Furthermore, as customers worldwide start buying apparels from India, the sector will identify its vast potential to yield business, bringing in more investments along the entire value chain – from the agricultural production to the final manufactured goods. Besides the FDI hike, the government of India is also attracting foreign investments through promotional visits to countries like France, Germany, Italy and Japan.

The textile export currently stands at USD 28.53 billion in 2013-2014 from USD 24.90 billion in 2012-2013, recording a growth of 14.58% in the same period. Within the next three years, the garments export is expected to touch USD 60 billion mainly with the support provided by the government.