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India’s textiles and apparel exports including handicrafts grew at a modest rate of 1 per cent during the fiscal year 2023-24 (FY24) to reach Rs 2.97 lakh crore (~$35.5 billion), as per the Economic Survey released by the Finance Ministry.
Growth in the industry was led by the RMG exports which accounted for 41 per cent with a value of Rs 1.2 lakh crore (~$14.34 billion). This was followed by cotton textiles, which made up 34 per cent, and man-made textiles at 14 per cent.
Despite this growth, the sector faced several challenges, highlights the report. As a significant portion of the sector’s production capacity comes from micro, small, and medium enterprises (MSMEs), their small scale limits efficiency and economies of scale achieved by large-scale modern manufacturing.
The fragmented nature of India’s apparel sector also poses problems. The industry sources raw materials from Maharashtra, Gujarat, and Tamil Nadu, while spinning capacities are concentrated in the southern states, leading to higher transportation costs and delays.
Additionally, the industry relies heavily on imported machinery, except for the spinning segment, and faces issues with inadequate skilled manpower and technological obsolescence.
To address these challenges, the central government plans to establish seven PM Mega Integrated Textile Region and Apparel (MITRA) Parks with a budget of Rs 4,445 crore ($0.531 billion) between FY22 and FY28. These parks will be located in Tamil Nadu, Telangana, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh, and Maharashtra.
Launched with an outlay of Rs 1,481 crore for the period from FY21-24, the National Technical Textiles Mission (NTTM) focuses on increasing the use of technical textiles in various sectors through four main components: research, innovation and development; promotion and market development; education, training and skilling; and export promotion. The mission has been extended until March 2026, with a sunset clause until March 2028. So far, NTTM has approved 137 research projects worth Rs 474 crore ($56.65 million).
The National Handloom Development Program(NHDP) has approved an outlay of Rs 998 crore ($119.3 million) for FY22 to FY26. In FY24, the government initiated steps to establish 96 small handloom clusters and set up nine mega handloom clusters.
These initiatives aim to bolster India's textile and apparel sector, addressing the existing constraints and fostering growth in the coming years.
Owned by the Authentic Brands Group, denim lifestyle brand, Lucky Brand has partnered with Velocity Global Brands to expand into the workwear market. Through this collaboration, Velocity will design, manufacture, and distribute men’s and women’s workwear for the Lucky Brand across the US and Canada.
Launching this fall, the new Lucky Brand workwear collection will combine durability, function, quality, and comfort. It will feature protective apparel such as coveralls, overalls, bibs, and scrubs, as well as outerwear. Key workwear attributes like triple-needle stitching, water and odor resistance, and quick-dry capabilities will be incorporated into the garments. The collection will be available at select department and specialty stores.
Reflecting its denim roots and Americana aesthetic through various products, Lucky Brand has evolved into a comprehensive lifestyle brand. The brand’s partnership with Velocity allows consumers to integrate its signature style into all aspects of their lives, says Alexandra Rodriguez, Vice President-Nautica and Lucky Brand, ABG.
With 20 factory partners in eight countries, Velocity Global Brands provides comprehensive sourcing solutions for various brands, including Quicksilver, Geoffrey Beene, Palm Beach 1922, and Monarchy.
Chris Laurita, Co-CEO, Velocity Global Brands, adds,the company’s partnership with the Lucky Brands enables it to offer consumers an opportunity to wear their favorite brand at work.
Tirrppur-based garment manufacturer Back Bay India has supplied nearly 1 million garment pieces for the upcoming Paris Olympics from June 26,
The apparel products supplied by the company will be sold at the stadia and other official retail outlets, with a small quantity supplied to volunteers. The company will also supply its garments for the Paralympic Games. Around €2 billion of these garment pieces will also be sold bythe International Olympics Committee through its official channels.
Contract for the supply of these garment pieces was awarded by the French company Cotton Division. In 2023, Back Bay also supplied products for the Rugby World Cup in France. The contract was awarded through the IOC’s official licensing program.
According to the organisers, official licensed products in all categories — apparel and accessories, gifts and novelties, toys and games, publishing, lottery, stamps and coins, luggage and travel items, stationery, school supplies, etc will be made available through official retail channels.
Around 10,000 references of these officially licensed products featuring the Paris 2024 colors will be developed by roughly 60 companies, both French and international.
A prominent think-tank, Global Trade Research Initiative (GTRI) has proposed a series of measures to revitalise India's garment export sector in response to the country's declining market share in global garment trade and lagging performance compared to competitors.
A few of the key recommendations from GTRI include the temporary suspension of quality control orders (QCO) on polyester and viscose staple fiber, expansion and relaxation of criteria in the textile production linked incentive (PLI) scheme, an overhaul of Directorate of Foreign Trade (DGFT) and Customs procedures, and addressing monopolistic practices of domestic suppliers.
The think tank identifies complex procedures, import restrictions, and domestic vested interests as major obstacles to export growth. Difficulty in sourcing quality raw fabric, particularly synthetic fabricis highlighted as a significant challenge for exporters.
In 2023, India's garment exports lagged significantly behind competitors such as China, Vietnam, and Bangladesh at $14.5 billion. According to Ajay Shrivastava, Co-founder, GTRI, this demonstrated the significant gap between India and its competitors.
The report shows, as against a growth of 69.3 per cent by Bangladesh and 81.6 per cent by Vietnam, India’s garment exports grew by only 4.6 per cent from 2013 to 2023. Consequently, India's global market share has been on a decline since 2015, with knitted apparel dropping from 3.85 percent to 3.10 percent and non-knitted apparel from 4.6 percent to 3.7 percent.
GTRI argues, quality control orders have undermined the competitiveness of India's man-made fiber (MMF) supply chain by limiting access to affordable and specialised raw materials. The report also criticises the Bureau of Indian Standards for delays in registering foreign suppliers, forcing exporters to rely on domestic monopolies at higher prices. Unlike their counterparts in Bangladesh and Vietnam, Indian exporters face daily struggles in accessing quality imported fabrics.
Further complicating the situation are high import duties and complex DGFT that require meticulous accounting for imported fabrics. The report also notes a concerning trend where garment imports to India rose by 47.9 percent between 2018 and 2023, while textile imports increased by 20.86 percent during the same period.
Karl Mayer's Technical Textiles Business Unit has launched the Max Glass Eco, a machine designed for the cost-effective production of glass fiber reinforcement textiles, particularly non-crimp fabrics used in the wind power sector. This new model offers remarkable efficiency with a maximum speed of 1,800 RPM and an impressive output of up to 410 meters per hour at a 101-inch working width.
Since its debut at JEC World in March, the Max Glass Eco has garnered substantial interest, leading to several purchase agreements. Machines are heading to India, with numerous units already ordered by Chinese clients. The demonstration models at Karl Mayer's customer centers in Changzhou and Chemnitz have been sold, though the machine at their Saxony facility remains available for processing trials and performance tests until September.
Eastern Europe has also shown strong interest. At Techtextil 2024 in Frankfurt, Karl Mayer's Sales Manager Ralf Schramm noted a flurry of discussions, including specific purchase requests from Rymatex, a Polish composite solutions manufacturer.
Beth Dufresne from Owens Corning praises the Max Glass Eco, highlighting its integration of proven solutions from Karl Mayer's multiaxial machines. As an early adopter, Owens Corning values the machine's advanced features, underscoring its appeal in the composites industry.
Global cotton trade is anticipated to expand at a steady rate of 2.1 per cent per annum (p.a.) to 12.4 million tons by 2033, according to a report by the Organisation for Economic Cooperation and Development (OECD) and Food and Agriculture Organisation (FAO) of the United Nations.
Titled, 'OECD-FAO Agricultural Outlook 2024-2033,' the report reflects substantial increases in mill use of cotton in Asian countries, particularly Vietnam and Bangladesh, which rely almost entirely on cotton imports to support their burgeoning textiles sectors.
It further highlights, stagnant production growth rate in China will drive an increase in lint imports over the next decade. This will fulfill the demand of local mills and replenish state reserves. By 2033, raw cotton imports are projected to rise by 0.7 per cent p.a to reach 2.8 million tons. However, this growth would be modest compared to the over 3 per cent growth projected for Vietnam and Bangladesh.
The United States will maintain its position as the world’s largest cotton exporter throughout the outlook period. US exports are projected to hold a 31 per cent share of world cotton trade by 2033, translating to approximately 3.9 million tons.
Brazil’s cotton exports are also expected to grow robustly over the next decade, solidifying the country’s position as the second-largest exporter by 2033. Sub-Saharan Africa will follow, accounting for around 16 per cent of global cotton exports. Exports from this region are projected to continue growing at about 0.7 per cent p.a., with South and Southeast Asia being the primary export destinations.
The report further projects, international cotton prices in real terms will trend slightly downward in the medium term. This price trend will be influenced by competition from man-made fibers and changes in consumer preferences. Relative price competitiveness between these two types of fibers will not change drastically over the projection period, the report adds.
Italian textile machinery manufacturers saw a decline in orders during the second quarter of 2024 compared to the same period last year. The drop, attributed to a cautious global market, was particularly pronounced in foreign markets, which account for a significant share (86 per cent) of total orders.
The ACIMIT index, a measure of order intake, fell by 17 per cent to 49.8 points (base 2021=100). This decrease was driven entirely by a 22 per cent decline in foreign orders, with the index for those markets reaching 48.8 points.
However, a bright spot emerged in the domestic market. Italian orders saw a 25 per cent increase compared to Q2 2023, with the index reaching 57.3 points. This suggests a potential rebound within Italy.
Despite the overall decline, order backlogs remain healthy, providing Italian manufacturers with 4.3 months of assured production. Additionally, capacity utilization is expected to rise from 61 per cent in the first half of 2024 to 64 per cent in the latter half.
ACIMIT President Marco Salvade attributed the slowdown in foreign markets to global geopolitical uncertainty. This trend is further confirmed by declining Italian textile machinery exports (excluding China and Egypt) in the first quarter of 2024.
S&P Global has joined the International Textile Manufacturers Federation (ITMF) as a corporate member. The move, following the merger of IHS Markit with S&P Global in March 2022, enhances S&P Global Commodity Insights’ extensive coverage, which spans chemicals, oil and gas, power, metals, agriculture, and shipping.
ITMF’s Director General, Christian Schindler, expressed pleasure at the partnership, highlighting the mutual benefits of collaboration within the textile industry’s value chain.
Tatiana Bondar, Associate Director at S&P Global, emphasized the strategic advantage of joining ITMF. She noted that access to ITMF’s reports, statistics, and surveys will deepen S&P Global’s understanding of the fiber and textile industry.
Participation in ITMF’s exclusive activities, such as annual conferences and specialized workshops, will provide valuable insights and enhance S&P Global's market proximity. Bondar believes this integration will allow S&P Global’s fibers team, present across EMEA, Asia, and America, to offer significant value to ITMF and its members.
This partnership underscores the importance of being embedded within the industry to access crucial information and expertise, facilitating better service and informed decision-making.
With Finance Minister NirmalaSitharaman set to unveil the Union Budget for fiscal 2024-25 soon, various sectors within the textile industry hope for policies addressing their specific needs and promoting overall growth.
The luxury fashion sector seeks reforms to enhance global competitiveness. PremDewan, Head-Retail, Corneliani, OSL Luxury Collections, highlights key expectations including duty structure reduction, GST simplification, customer-friendly policies, and retail infrastructure development.
He recommends a reduction in the import duties to international standards and simplification of compliance standards for products like shoes and leather. Additionally, Dewan advocates for a re-evaluation of PAN and Aadhaar requirements for high-value purchases to encourage domestic spending. He believes increased investments in retail infrastructure will position India as a premier shopping destination, boosting both the luxury industry and the broader economy.
K KLalpuria, CEO and Executive Director, Indo Count Industries, anticipates a budget emphasising textile manufacturing. He hopes for measures to promote infrastructure development, sustainability, and supportive policies within the industry. Such initiatives will help India become a global leader in textile manufacturing, fostering innovation and competitive advantage, he says.
Harsh Saraf, Founder and Director, SuperSox, seeks new policies to integrate knitting, processing, and garmenting industries while also modernising them. He supports the continuation of the 15 per cent concessional tax rate for new manufacturing firms to boost investor confidence and support the ‘Make in India’ initiative. Saraf also stresses on the importance to improve labor laws for the expansion of production facilities. Further, he also calls for increased support in innovation and R&D to create environment-friendly processes and superior products.
The domestic cotton spinning sector is set to rebound in FY25 with an anticipated growth of 6-8 percent, driven by modest increases in realisation and a 4-6 percent rise in volume, as per a report by ICRA. This marks a recovery after nearly two years of decline due to falling yarn prices and muted domestic demand.
Over two-thirds of all cotton yarn produced is used domestically, with recovering downstream industries such as home textiles and ready-made clothing beginning to show signs of revival. After a growth spurt on a reduced base in FY24, exports are expected to normalise in FY25. Although global demand remains sluggish, a shift in sourcing preferences away from other countries will mitigate the impact on exports.
K Srikumar, Senior Vice President and Co-Group Head, Corporate Sector Ratings, ICRA, notes, gross contribution margins for spinners, which contracted sharply by approximately 20 percent Y-o-Y in FY24 amid weak domestic demand, recovered by an estimated 5 percent in Q1 FY25. This recovery trend is likely to continue throughout FY25. Consequently, operating profit margins are expected to expand by 100-150 basis points, supported by scale benefits and cost-saving measures undertaken by industry players.
The past two years saw a dramatic decline in domestic cotton prices, which peaked in H1 FY23 at a lifetime high of Rs 284 per kg. With a recovery in demand and an anticipated decrease in the area planted to cotton, average prices, which fell by about 26 percent Y-o-Y in FY24 due to a decline in world prices and weak demand from end-user groups, are expected to rise slightly in the near future.
ICRA alaoexpects a slight increase in capital expenditure announcements in FY25, driven by the need to modernise machinery, demand from the China Plus One strategy, and strengthening domestic demand from downstream garment companies.
