Context: The textile industry is coming under greater Environmental, social and governance (ESG) scrutiny. Traceability in supply chain and recycling of textile waste are vital going forward.
About Textile Industry in India:
The Indian textile and apparel market is currently estimated at over $150 billion, of which, export constitutes over $40 billion.
A recent report pointed out that the global textile and apparel trade is set to reach $1,000 billion by 2025-26 and that in the same period the Indian textile and apparel market will reach $250 billion.
India holds a 4% share of the U.S.$840 billion global textile and apparel market, and is in fifth position.
It contributes 3% to Indian Gross Domestic Product, 7% of Industrial Output, 12% to the export earnings of India and employs more than 21% of total employment.
India is also the second largest producer of silk in the world and 95% of the world’s hand woven fabric comes from India.
India is the 6th largest producer of Technical Textiles with 6% Global Share, largest producer of cotton & jute in the world.
Technical textiles are functional fabrics that have applications across various industries including automobiles, civil engineering and construction, agriculture, healthcare, industrial safety, personal protection etc.
Fabric-wise stats:
Cotton – Second largest cotton and cellulosic fibres producing country in the world.
Silk – India is the second largest producer of silk and contributes about 18% to the total world raw silk production.
Wool –India has 3rd largest sheep population in the world, having 6.15 crores sheep, producing 45 million kg of raw wool, and accounting for 3.1% of total world wool production. India ranks 6th amongst clean wool producer countries and 9th amongst greasy wool producers.
Man-Made Fibres– the fourth largest in synthetic fibres/yarns globally.
Jute – India is the largest producer and second largest exporter of the jute goods.
Significance of the sector:
Economical: In 2019–20, the domestic textile and apparel market was worth $150.5 billion.
Trade: India registered $ 41 bn in textile exports in CY 2021, with a CAGR (2.7) marginally higher than the global average.
Employment: The second-largest employer in India, the textile and garment sector employs 100 million people in supporting sectors in addition to 45 million workers directly.
Raw material for other sectors: Technical textiles are useful materials that are used in a variety of fields, such as automotive, civil engineering, healthcare, agricultural, personal protection, and construction.
Factors favouring growth of the Indian Textile Industry:
Raw material base: India has high self- sufficiency for raw material particularly natural fibres. India’s cotton crop is the third largest in the world. Indian textile Industry produces and handles all types of fibres.
Labour: Cheap labour and strong entrepreneurial skills have always been the backbone of the Indian textile Industry.
Flexibility: The small size of manufacturing which is predominant in the apparel industry allows for greater flexibility to service smaller and specialized orders.
Rich Heritage: The cultural diversity and rich heritage of the country offers good inspiration base for designers.
Domestic market: Natural demand drivers including rising income levels, increasing urbanization and growth of the purchasing population drive domestic demand.
Challenges faced by the textile sector:
Highly fragmented: The unorganized sector and small and medium-sized businesses dominate India’s textile industry, which is highly fragmented.
Outdated Technology: Due to market competition and access issues, the Indian textile sector struggles to keep up with international standards. This is especially true of small-scale businesses.
Issues with Tax Structure: The GST (Goods and Service Tax) tax structure makes clothing expensive and uncompetitive in both domestic and foreign markets. The threat of growing labor and worker salaries is another.
Exports Stagnant: For the past six years, the sector’s exports have stayed constant at a level of USD 40 billion.
Lack of Scale: Bangladesh has at least 500 machines per factory on average, whereas the average size of the textile units in India is only 100, which is significantly smaller.
Lack of Foreign Investment: One of the concerns is that there is a lack of foreign investment in the textile business because of the issues mentioned above.
Government of India initiatives to promote the growth of the Textile Industry:
The National Technical Textile Mission: It seeks to enhance domestic technical textile consumption while establishing the nation as a global leader in the field. By 2024, it hopes to increase the size of the domestic market to between $40 billion and $50 billion USD.
Amended Technology Upgradation Fund Scheme (ATUFS): In order to modernize the textile industry’s technology, the government approved the “Amended Technology Upgradation Fund Scheme (ATUFS)” in 2015.
The Scheme for Integrated Textile Parks (SITP) aims to help small and medium-sized textile business owners cluster investments in textile parks by providing financial support for the parks’ top-notch infrastructure.
The SAMARTH (Scheme for Capacity Building in the Textile Sector): The government started the SAMARTH Scheme for Capacity Building in Textile Sector (SCBTS) to alleviate the scarcity of trained people.
The North East Region Textile Promotion Scheme (NERTPS) is a program that supports all areas of the textile industry with infrastructure, capacity building, and marketing assistance.
Power-Tex India: It includes innovative power-loom textile research and development, new markets, branding, subsidies, and worker welfare programs.
The Silk Samagra Scheme seeks to lessen the nation’s reliance on imported silk by enhancing the quality and productivity of domestically produced silk.
ICARE Jute: This pilot initiative, which was started in 2015, aims to help jute growers overcome their challenges by offering certified seeds at discounted prices and by popularizing many recently developed retting technologies under water-restrictive conditions.
PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks: It aims to integrate the entire textile value chain from spinning, weaving, processing/dyeing, printing to garment manufacturing at one location.
Way Forward:
India needs to frame a suitable policy whereby the Indian textile industry can contribute to advancing our energy transition commitment. To achieve the sustainable target, it is necessary to adopt good regulatory practices and increased focus on quality, compliance and investment.
As part of this, we need policies to encourage recycling of discarded textiles. This is important given the socio-economic status of the country and income disparities. Recently, Bangladesh’s readymade garments initiated ‘green manufacturing’ practices to help conserve energy, water, and resources. India could bring such initiative into action to combat sustainability of textile industry.
Sustainable practices such as regenerative organic farming, sustainable manufacturing energy (renewable sources of energy are used) and circularity are needed to be adopted to make textile industry sustainable. The Indian government is committed to promoting sustainability through project sustainable resolution.
