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India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 13 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale. The Modi Government’s major mission of “Make in India” is predicated on the basic assumption that it would encourage domestic manufacturing in a big way in as much as it is also highly helpful to generate employment to a greater number of people. Hence, production and exports stemming from light manufacturing segments such as leather products and textiles assume pre-eminent priority in the scheme of things of the authorities. The end of the restrictive Multi-fibre Arrangement (MFA), a sort of global trade pact on textiles and clothing that was in practice from 1974 till 2004 putting limits by way of quotas that developing countries could export in the form of yarn, fabrics and clothing to developed nations, provided a huge opportunity for competitive exporters such as India, Bangladesh and Vietnam. But it is more than a decade since the dismantling of the quota regime that India could not realize the abundant opportunities as other least-cost competitors had overtaken due to competitive cost, price and delivery schedules. However, the situation in the recent couple of years gives a glimmer of hope and solid ground for optimism as the Ministry of Textiles has become proactively busy in stitching together facilitative measures to impart a leg-up for the textile industry both for domestic consumption and also for exports.
The textile industry employs about 105 million people directly and indirectly. India's overall textile exports during FY 2017-18 stood at US$ 37.74 billion. The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.
Market Size
Investment
Government Initiatives
The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. Apart from this following have been undertaken recently;
Some of initiatives taken by the government to further promote the industry are as under:
Overall, apart from these recent initiatives, there were also flagship schemes to develop the country’s hoary textile industry that cover, among others, Schemes for the Development of Powerloom clusters, Integrated Scheme for Development of Silk Industry (ISDSI), Comprehensive Handloom Cluster Development Scheme (CHCDS), National Handicrafts Development Programme(NHDP) and the North East Region Textiles Promotion Scheme (NERTPS). There has also been a Scheme for Integrated Textile Parks (SITPS), launched a couple of years ago but has been unobtrusively making rapid strides in recent years. The primary aim of the SITPs is to foster integrated value chains with world class infrastructure at potential growth centres to propel them to a pole position by facilitating the textile sector to realize its full potentials. It aimed at addressing infrastructure constraints on cluster basis and enables the industry to meet global environmental standards, facilitate additional investment and generate job. The scheme is purely industry-driven and the role of the government is limited to part-funding and facilitating. In recent years, the scheme has helped to leverage investment and set up parks with production units and common infrastructure facilities. State governments too are involved in selection process and for various clearances to set up these parks. The Ministry of Textiles has granted Rs 152 crore for development of eight textile parks in various States so far.
Under its output-outcome framework for a spate of schemes for the current fiscal, the Textile Ministry has set apart a massive Rs 3094 crore to kick-start the growth momentum of this important industry for livelihood of millions and also to earn the much-needed foreign exchange through exports of Indian textile and clothing to overseas markets.
Road Ahead The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market. The domestic market for apparel and lifestyle products, currently estimated at US$ 85 billion, is expected to reach US$ 160 billion by 2025. The Indian cotton textile industry is expected to showcase a stable growth in FY2017-18, supported by stable input prices, healthy capacity utilisation and steady domestic demand.
By: Abhishek Sharma ProfileResourcesReport error
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