Important Topics: Indian Textiles - Global Scenario (India and World)

Indian TextileGlobal recovery continues, but at an ever slowing and increasingly fragile pace – In 2015, the volume of world trade continued to grow slowly, recording weak but positive growth of 2.7%. Demand in global market across sectors, remains muted but amid a slowdown, India’s textile sector managed to grow approx 1% in Financial Year 2016.

Textile Industry Trade: India and World

  • Indian Textile and Clothing (T&C) Industry is backbone of Indian economy as it contributes in:
    • 5% National GDP
    • 21% employment
    • 14% Industrial Production
    • Exporting 1/3rd of its production
    • Earning 12% forex
    • Creating jobs for 10 million people in less 15 years.
  • World Trade in T&C – estimated USD 745 billion – 2015 and expected to grow CAGR of 6% further increasing to USD 1,120 billion by 2020.
  • T&C sector employs – over 170 million people worldwide – predominantly in Asia.
  • In 2015, India achieved level of USD 37.22 billion in exports of T&C and its share in world trade in T&C was 5%.
  • Top ten suppliers of textiles exported goods worth USD 319.35 billion during January-December 2015, accounting a share of 71.21%. USA was largest importer of textiles in 2015, with imports reaching level of USD 29.01 billion.
  • India continues to be 2nd largest exporter of textiles to world after China – exporting knitted goods worth US 20.05 billion in January-December 2015 with 6.28% share in world trade.
  • While many countries reported negative growth in import of textiles Vietnam imported USD 19.16 billion – followed by Bangladesh USD 8.94 billion both marking growth at 5.47% and 5.45% respectively.
  • The industry faced many challenges (2015-16) – relating to global recession – price fluctuation of raw material like cotton, high cost of utilities like power and fuel, infrastructural bottleneck i.e. high logistics and transaction cost.

Employment in Textile Sector

  • Industry – making significant contribution to employment generation as every $ 1 billion of output is estimated to generate 25000 direct jobs and forex (foreign exchange) earnings.
  • According to Ministry of Skill Development and Entrepreneurship, Government of India, the textile and apparel industry has a major role to play in Government’s “Make in India” campaign through its contribution to employment generation. Report states that overall employment in sector would increase from about 33-35 million in 2008 to 60-62 million by 2022.

Strength and Opportunities – An Analysis

The Indian textile sector has much strength like:
(1) High self sufficiency in raw material;
(2) Leading producer of cotton in world;
(3) Easy availability of low cost manpower
(4) Strong entrepreneurial skills.

Opportunities available for growth of Indian Textiles:
(1) Manufacturing of high value premium items by producing high value added products.
(2) Technical Textile – offers innovative and technologically superior products.


To achieve the vision set up by Hon’ble Prime Minister i.e. to increase textile business size from current USD 108 billion to USD 300 billion 2023 measures like following can be taken:
(a) Focus on R&D, design and marketing capabilities
(b) Building Indian Home Textiles and Garment brands for world and domestic markets.
(c) Expedite negotiations on Indian FTA’s with EU, Canada and Australia.
(d) FDI and investment.
(e) International Quality Standards need to be maintained across all level of production.
(f) Improving productivity of sector – training and skill building.

Some Facts and Extras about Indian Textile Sector

  • India is the 2nd largest producer of silk; 2nd largest textile manufacturer in world; highest loom capacity with 63% share of the world’s market; and accounts for 24% world’s spindles and 8% world’s rotors.
  • Global Competitiveness – China – global leader in textile and apparel trade – 36.13% share, India second 5.13% share, Bangladesh third – 4.39% share.
  • E-Portal for Pashmina Products: named, to sell pashmina products and boost global sale.

Impact of GST on textile sector: Union Ministry of Textiles estimates that for the textile sector as a whole, the adverse effect of a price rise on demand will be just neutralised by a positive income effect if the GST rate applicable to all textile segment is 12%. But demand in case of three textile segment namely khadi, cotton textiles, carpets would be adversely affected. This will led to substitution effects within textile sector encouraging greater use of man-made fibre based textiles and blends that use relatively more synthetic fibre.

Impact of Brexit on Indian Textile Sector: India is the 3rd biggest foreign investor in UK after US and France. Total trade between UK and India was £16.55 billion last year. India saw UK as a gateway to enter the rest of Europe by setting up factories in UK which enable their products to be sold in rest of Europe. Indian exports of $ 10 billion worth of textiles and apparels to European Union of which 23% ($ 2.5 billion) goes to Britain. With such close trading relationship the country sees Brexit as an opportunity to develop closer ties with UK Trade/Industry and government need to harness efforts in close co-ordination to reap the benefits.


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