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Textile Sector in India

Significance of the Textile Sector in India

The textile sector is one of India’s most ancient and vital industries, significantly contributing to the country's economic framework. 

It accounts for approximately 2.3% of India’s GDP and 7% of industrial output, serving as the second-largest employer after agriculture. 

The sector provides direct employment to over 45 million individuals and indirectly supports another 100 million in related fields. Additionally, textiles and apparel exports reached around $44.4 billion in FY 2023, representing about 12% of the nation’s total export earnings. 

This diverse industry includes various activities such as fiber production, spinning, weaving, knitting, dyeing, and apparel manufacturing, making it a key driver of economic growth and rural development.

Key Segments of the Textile Industry

Cotton Textiles: India leads the world in cotton production, contributing over 30% of global output. This segment is crucial for both domestic supply and exports.

Handloom and Handicrafts: Renowned for their traditional designs and quality, India’s handloom sector employs over 4.3 million weavers, preserving the country’s rich cultural heritage.

Technical Textiles: A rapidly expanding segment, technical textiles focus on functional applications in sectors like healthcare, automotive, and agriculture. The market is expected to grow at a CAGR of 20%, reaching $23 billion by 2025.

Man-Made Fibres (MMF): This segment has gained significant traction, making up about 30% of India’s textile market, with synthetic fibers like polyester widely utilized across various industries.

Current Challenges Facing the Textile Sector

Raw Material Fluctuations: Price volatility, particularly in cotton, poses challenges to production costs and profitability.

Technological Upgradation: Many manufacturing units rely on outdated technologies, necessitating substantial investments in modern machinery and digital tools to enhance productivity and quality.

Environmental Concerns: The industry’s resource-intensive nature raises sustainability issues, prompting the need for eco-friendly practices.

International Competition: India faces tough competition from countries like Bangladesh, Vietnam, and China, which offer lower production costs and quicker turnaround times.

Regulatory Hurdles: Compliance with complex regulations can create delays and increase operational costs for textile manufacturers.

Government Initiatives to Boost the Textile Sector

Production Linked Incentive (PLI) Scheme: With a budget of ₹10,683 crore, this scheme aims to promote the production of MMF and technical textiles, expecting to attract investments worth ₹19,000 crore and generate 7.5 lakh jobs.

National Technical Textiles Mission: Launched with an allocation of ₹1,480 crore, this initiative seeks to position India as a leader in technical textiles through enhanced domestic production and research.

Amended Technology Upgradation Fund Scheme (ATUFS): This program offers financial assistance for upgrading machinery to modernize the textile industry and improve productivity.

Skill Development Programs: Initiatives like Samarth aim to train over 10 lakh youth in various textile-related trades to meet the industry’s demand for skilled labor.

Mega Integrated Textile Region and Apparel (MITRA) Parks: The establishment of seven MITRA parks is planned, featuring state-of-the-art infrastructure and facilities designed to attract investments and enhance the competitiveness of Indian textiles.

News Summary

Recent developments indicate that about 12 textile companies will soon receive their first incentives under the PLI scheme, following signs of export recovery in August. 

The PLI scheme, launched in 2021, aims to boost production in the MMF and technical textiles sectors. 

Union Minister Giriraj Singh outlined a roadmap to generate 4.5 to 6 crore jobs in textiles by 2030 and expand the market size to $350 billion from the current $165 billion. 

Despite these initiatives, textile exports have declined for the second consecutive year in 2023-24. 

The World Bank noted that India’s share in global labor-intensive exports has stagnated, while countries like Bangladesh and Vietnam have gained ground, aided by favorable trade agreements. 

The Bank suggested that India could benefit from diversifying its export markets and reducing trade barriers to foster growth in the textile sector.

FAQs

Q1. What are Technical Textiles?  

Technical textiles are specialized fabrics designed for performance and functionality rather than aesthetics. They are utilized in various industries, including healthcare, construction, automotive, aerospace, sports, and defense.

Q2. Which States are leading Textile producers in India?  

The chief textile-producing states in India include Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, Karnataka, Madhya Pradesh, Rajasthan, and West Bengal.

Q3. How does the textile sector impact rural development?  

The textile industry plays a crucial role in rural development by providing employment opportunities, preserving traditional crafts, and enhancing livelihoods for millions of weavers and artisans.

Q4. What are some eco-friendly practices in the textile industry?  

Eco-friendly practices include using organic cotton, waterless dyeing technologies, recycling materials, and implementing sustainable sourcing methods to minimize environmental impact.

Q5. How does the government support skill development in the textile sector?  

The government implements various initiatives, such as the Samarth program, to provide training and skill development for youth in textile-related trades, ensuring a skilled workforce for the industry.

Q6. What challenges do Indian textile exports face?  

Challenges include international competition, fluctuating raw material prices, compliance with regulations, and maintaining quality standards to meet global demands.

Q7. What role do MITRA parks play in the textile sector?  

MITRA parks are designed to provide integrated facilities for textile production, attracting investments, enhancing competitiveness, and creating jobs through state-of-the-art infrastructure.