Placing India’s textile industry on the world map

Did you know that the textile industry of India is almost as old as that of human civilization? Archaeological evidence found at Mohenjo-Daro in the Indus Valley suggests that the cotton textile industry existed there way back in 3000 B.C. With passing time, the history of the textile industry indicates that the industry evolved and enriched itself. Currently, India is the second-largest producer of textiles and garments in the world.

Textile & Apparel Zones in India:

Like the rich cultural diversity of India, India also has a bouquet of key textile hubs that are known for their material, motifs, and craftsmanship. 85% of total textile manufactured in the country is contributed by 70+ “Clusters”.

North: Panipat alone accounts for 75% of the blankets and quilts production in the country, and together with Kashmir, and Ludhiana they produce 80% of woollen textiles in India. Ludhiana alone contributes about 95% in the manufacturing of woollen knitwear.

East: To the east, the industry appears less uniform and becomes more diverse. Bihar is known for its jute work, parts of Uttar Pradesh are famous for their woollen articles, and Bengal is known for its jute and cotton industries. 

South: Tirupur, Coimbatore & Madurai together contribute 80% of the total hosiery exports from India.  The majority of the silk in the country gets produced in Bengaluru, Mysore, and Chennai.

West: The discussion on the textile industry in India cannot be complete without the mention of Surat, also known as the textile city. The textile industry in Surat is one of the oldest and most widespread, with a major part of the city population engaged in the industry.

It is also the largest centre of man-made fibre (MMF) in India, with more than 30 million metres of raw fabric and 25 million metres of processed fabric produced here every day.

Apart from this, Ahmedabad, Mumbai, Rajkot, Indore, and Vadodara are the key producers of Cotton in western India.

Rise of India’s Export of Textile and Apparels Market

With such rich diversity & high scale, Indian textiles and apparel attract a very high global appeal. Cotton, silk, and denim from India are highly popular in the international market. With an upsurge in the Indian design talent on the international platform, the Indian apparel industry has also found success and recognition across fashion centres around the world.

India exported textiles and apparel worth $37.2 billion in 2018 and is expected to reach $85 billion by 2021. The major contributors included non-retail pure cotton yarn, knit t-shirts, non-knit woven suits, raw cotton, house linen, non-knit women’s shirts, non-retail synthetic filament yarn, non-knit men’s shirts. Packing bags, light pure woven cotton, knit sweaters among others formed the rest of the export kitty.

Countries that are major importers for Indian textiles and apparel are:

• United States of America
• European Union 
• Parts of Asia
• Middle East

Strengths of India in the Export of Textile and Apparel

With a huge base of raw material and manufacturing capabilities, India is the second-largest exporter of textiles and apparel in the world. The Indian textile industry is one of the significant contributors to the economy, both in terms of domestic and exports share. Its contribution is about 7% to the total industry output, 2% to the GDP, and 15% to the total export earnings of the country.

Let’s have a look at the factors that make India one of the strongest players in this market:

Manpower

India boasts of having one of the largest pools of skilled and affordable manpower in the world. The average wage rates are much lower, being 50%-60% of what is prevalent in developed countries. This enables India to take advantage of the global outsourcing trends, especially in the labor-intensive sectors such as garments and home textiles. 

The industry is one of the largest employers in the country, with 45 million people working directly including 3.5 million handloom workers and 60 million people working indirectly.

Production Capacity

The Indian textile industry can produce a wide range of products catering to the different market segments, both for domestic consumption and internationally. India is the largest producer of cotton in the world. The production of raw cotton in FY20 was estimated to have reached 35.4 million bales. The production of fibre in FY19 stood at 1.44 million tonnes, reaching up to 1.6 million tonnes in FY20 (up to Jan 2020). The yarn production is estimated to be 4.76 million tonnes in the same period.

Flexibility

The manufacturing sector comprises many big and small units. Small-sized units dominate the apparel industry, which allows for greater flexibility to service specialised and smaller orders. There is depth in the production facilities that are available across the value chain right from spinning to finished garment manufacturing. The industry regularly invests in new and advanced technological solutions. This coupled along with an increase in production capacities, will keep the momentum of growth on the increasing trend.

Rich Heritage in Design & Fashion

Apparel and fashion designers are inspired by the rich and diverse cultural heritage of the country. Often the motifs and patterns used are unique to the cultural locations and are not found anywhere else in the world. These design capabilities are one of the key strengths over other competitive nations, and that enables Indian players to forge relationships with global retailers.

Many large Indian companies such as Arvind Mills, Raymonds, Welspun India, and Alok Industries have established themselves as quality producers in the global textile and garments market. The recognition of Indian expertise will further facilitate India to leverage itself as a leader among global retailers. Interestingly, it is the small and medium manufacturers, who have gained immense expertise in making a variety of unique designs, that are inspired by the local traditional heritage as well as the latest global trends. 

Development areas of Textile and Apparels Market in India

Manpower & Labour laws

Although manpower is one of the key strengths of India, it is also rampant with many issues. India has one of the highest worker attrition rates in the world – at around 12% a month. This factor makes skilling and training of new manpower a cost in-efficient exercise. This also sometimes reflects in the uneven quality of the products.

Manufacturers have to work upon ways to manpower retention of skilled workforce by adopting practices such as the implementation of minimum wages, improved working conditions, and cordial work atmosphere. These would be beneficial for the sector in the long term.

Capacity for Seasonal production

Apparel is a seasonal industry. Typically, there are 4 seasons around the year and the global industry demands freshness in every season. However, many Indian manufacturers can produce for only one season and can capture demand for the January to March season. To become the dominant player and meet the demands of the global market, companies should try and get orders across the year and have the requisite capacity to fulfil the orders on time.

Technology

Another problem plaguing the industry is the use of old machines, which are more than 10 years old, especially used by the weaving sector. While the global textile industry has been fast in adopting technological advancements, the local industry still relies a great deal on the import of second-hand textile machinery. Serious players have to show the way ahead and must upgrade to the latest technology to have availability of the latest fabrics, accessories, and manufacturing techniques.

Digital Transformation

A digital wave in the apparel and fashion sectors has been predicted by industry experts for many years now. Few areas where technology adoption is picking up are in designing, marketing, and inventory management. However, many processes on the ground are still largely manually operated. There needs to be swift adoption of technology in areas such as quality checks, product development, project management and sales.

Longer lead times & unreliability

Although small and medium manufacturing facilities offer great flexibility, sometimes the issue of reliability crops up. The results can be sub-standard & not meeting the global quality standards. Indian manufacturers can compete globally by delivering orders in shorter and committed lead times while producing as per the promised quality standards.

Way Ahead in the Global Market: 

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Despite the challenges, the future for the textile and apparel industry in India looks very promising, stimulated by strong domestic consumption and rising demand in exports. In the future, India’s apparel export is expected to increase considerably. The total exports from the textiles and apparel sector are expected to reach $82 billion by 2021, at a CAGR of 12.06% from FY18.

The government of India has been ardent in promoting the textile and garment sectors by implementing many export favourable trade policies.  It has also allowed 100% FDI in the sector under the automatic route.

Along with favourable government policies, other factors that will contribute to the exponential growth in the textile and apparel sector of the country, both at home and internationally are:

• The rise in income levels
• Increased penetration of organised retail
• Favourable demographics
• Increasing demand of India based fashion designs
• Nimble supply chain which has range and flexibility
• Expertise and availability of crop to finished product

Along with government and policy support, a skilled workforce, sustainable environmental practices, the small and medium players in the sector have huge opportunities to place themselves prominently on the world map. This can be achieved by adopting organised and best business practices, implementing the latest and advanced technological solutions, and being digitally aware.