Apparel & Textiles
The apparel and textiles industry is one of the oldest and most significant sectors in the Indian economy, contributing substantially to GDP, industrial output, and employment. The industry is highly diversified, encompassing traditional handloom products, handicrafts, and silk alongside a modern, capital-intensive mills sector.
Economic significance
- Economic contribution: The sector contributes roughly 2.3% to India's GDP and about 13% to its industrial production.
- Employment: It is the second-largest employer in the country after agriculture, providing direct employment to over 45 million people. The industry also employs 100 million people in allied sectors.
- Exports and trade:
- In 2023–24, India was the sixth-largest exporter of textiles and apparel globally, with exports valued at $34.4 billion.
- The U.S. is India's largest export destination, accounting for nearly 29% of its textile and apparel exports in FY25 (April–December).
- The government aims to achieve textile exports of $100 billion by 2030.
- Market size and growth: The Indian textiles and apparel market is projected to reach $350 billion by 2030, growing at a 10% Compound Annual Growth Rate (CAGR).
Key segments
- Cotton textiles: India has the world's largest cotton acreage and is the second-largest producer and consumer of cotton globally. Cotton textiles are a major contributor to total exports, accounting for 39% of the sector's exports in 2021–22.
- Man-made fibres (MMF): The MMF sector, including products like polyester and viscose, is a significant part of the industry, with the government promoting its growth by removing anti-dumping duties on key raw materials.
- Technical textiles: This is a high-growth, high-value segment, with India's market size estimated at $19 billion. The government supports this area through initiatives like the Production Linked Incentive (PLI) scheme and the National Technical Textiles Mission.
- Handloom and handicrafts: The industry retains a strong connection to India's cultural heritage. The government supports the handloom sector through programs like the National Handloom Development Programme (NHDP).
- Silk: India is the world's second-largest producer of silk and is unique in producing all four major commercial varieties.
Government initiatives and policies
The Indian government has launched several schemes and policies to modernize the sector, boost investments, and enhance export competitiveness.
- PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks: A total of seven PM MITRA parks have been established across different states to provide world-class infrastructure and a fully integrated textile value chain, reducing logistics costs.
- Production Linked Incentive (PLI) Scheme: This scheme offers incentives to companies for producing MMF fabrics and technical textiles. It is expected to drive substantial investments and employment.
- Scheme for Rebate of State and Central Taxes and Levies (RoSCTL): This measure is designed to boost the export competitiveness of Indian apparel and made-up goods.
- Foreign Direct Investment (FDI): India allows 100% FDI in the textiles sector through the automatic route, attracting significant foreign investment.
- Free Trade Agreements (FTAs): The government is actively pursuing FTAs with key markets like the EU and UK to provide Indian textile and apparel exports with a competitive edge.
Challenges and outlook
Despite its strengths, the industry faces challenges, including competition from cheaper imports and high input costs. However, the outlook remains positive due to several factors:
- Strong domestic demand: Growing household incomes, rising consumerism, and the expansion of organized retail are fueling demand.
- Diversified product base: India's ability to produce a wide range of natural and man-made fibers provides a competitive advantage.
- Global sourcing shift: A trend toward shifting global sourcing away from China is benefiting Indian apparel exporters.
- Sustainability focus: The industry is increasingly focused on sustainable practices by incorporating natural and recycled materials.
