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India's textile sector, has hit a rough patch in recent months. While there are bright spots, overall exports have declined. And the slump is being felt across sectors.
An analysis of the Ministry of Commerce data reveals a 4.2 per cent year-on-year decline in textile exports for the first 11 months of FY24 (April 2023-February 2024). This translates to $30.96 billion compared to $32.33 billion in the corresponding period of the previous year.
A decline across sectors
Ready-made garments: Exports dipped from $14.73 billion to $13.05 billion.
Jute: Exports declined from $400 million to $310 million.
Yarn (excluding apparel): Exports fell from $4.47 billion to $4.23 billion.
Several factors have contributed to the current situation one major one is the global economic slowdown asweakening economies in major destinations like the EU, US, and West Asia have dampened demand for Indian textiles. Then there were geopolitical tensions. The ongoing war in Ukraine and its ripple effects have disrupted global supply chains and impacted consumer confidence.The increase in cotton and other raw material prices too has squeezed margins for exporters.
Meanwhile, the dynamics between cotton and synthetic textiles are interesting. While cotton exports have witnessed a slight decline, synthetics have fared worse. This could be due to:
Shifting consumer preferences: A growing demand for sustainable and eco-friendly clothing might be pushing consumers towards natural fibers like cotton.
Price fluctuations: Greater volatility in synthetic fiber prices compared to cotton might be making them less attractive to manufacturers.
However, the decline in exports is not uniform across destinations. For example, the slowdown in major markets like the US and Europe significantly impacts overall export figures. And similar economic woes in West Asian region have also contributed to the decline. However, countries in Southeast Asia and Africa might offer some opportunities for export diversification.
Competition heats up
India faces stiff competition from other textile-producing nations like:
Vietnam: Emerging as a strong competitor with lower labor costs and government support.
Bangladesh: Another major player with a focus on cost-effectiveness. China: The global leader, though facing challenges due to rising domestic wages.
To move ahead the Indian textile industry needs to adapt to navigate these challenges. Here are some potential solutions:
Focus on high-value segments: Shifting focus to niche markets and premium products could help improve margins.
Diversification of export markets: Exploring new markets in Southeast Asia and Africa can help reduce dependence on traditional destinations.
Technological advancements: Embracing automation and digitalization can improve efficiency and competitiveness. While the near future might be challenging, India's textile sector has a strong track record of resilience. By addressing these issues and embracing innovation, the industry can bounce back and reclaim its position as a global leader.
The International Cotton Association (ICA) has launched a new podcast, "The Thing About Cotton," spotlighting the cotton value chain and female leaders in the industry. Hosted by ICA’s Women in Cotton Committee members Camille Cluzel (Louis Dreyfus Company), Eimear McDonagh (AgriDirect), and Katie Farren (Cargill Cotton), the podcast aims to educate and inspire.
In Episode 1, ICA President Kim Hanna discusses the history and structure of the cotton industry. She expressed her honor in being the inaugural guest and emphasized the podcast's potential to highlight the positive aspects of cotton and provide a platform for women in the industry.
Episode 2 features Eva Bille, EU Policy Director at Hill & Knowlton Brussels, who delves into EU legislation's impact on the global cotton value chain, particularly concerns over PEF regulations favoring manmade fibers. Bille stressed the importance of these discussions for the cotton supply chain's awareness and preparedness.
India’s garment exports, once thriving, have faced setbacks, falling to $14.5 billion in 2023-24 from $15 billion in 2013-14, due to high duties and barriers on raw material imports, coupled with cumbersome customs procedures, according to the Global Trade Research Initiative (GTRI). While countries like Vietnam and Bangladesh saw substantial growth in garment exports, India lagged behind.
Vietnam's garment exports surged by 82 per cent to $33.4 billion, and Bangladesh's by 70 per cent to $43.8 billion between 2013 and 2023. China, despite a decline, still exported $114 billion worth of garments in 2023. India’s imports of garments and textiles also grew, reaching $9.2 billion in 2023, with further increases anticipated as companies like Reliance Retail introduce Chinese brands.
The GTRI report highlights that India’s complex import procedures and high costs for raw materials like synthetic fabrics are significant hurdles. Quality Control Orders for fabric imports have exacerbated these issues, raising costs and making Indian garments less competitive globally.
Exporters are forced to use expensive domestic supplies, making their products less appealing. The report urges a comprehensive overhaul of the Directorate General of Foreign Trade and Customs procedures to streamline import processes and reduce costs for exporters.
In her Budget 2024-25, Finance Minister NirmalaSitharaman announced several measures to enhance the export competitiveness of the leather and textile sectors.
One of these proposed measures includes reducing the basic customs duty (BCD) on real down filling material from duck or goose and expanding the list of exempted goods for manufacturing leather and textile garments, footwear, and other leather articles for export.
To correct duty inversion, the government has reduced BCD on methylene diphenyldiisocyanate (MDI) for manufacturing spandex yarn from 7.5 per cent to 5 per cent, subject to conditions. Additionally, it has simplified the export duty structure on raw hides, skins, and leather.
Further, the government aims to introduce a centrally sponsored scheme aimed at skilling, in collaboration with state governments and industry. It also plans to upgrade 1,000 Industrial Training Institutes (ITIs) with a focus on outcome-oriented hub and spoke arrangements.
Another of the government’s objectives includes setting up of e-commerce export hubs through public-private-partnership (PPP) to help MSMEs and traditional artisans sell products internationally. These hubs will offer trade and export-related services under a seamless regulatory and logistic framework.
The government will also develop investment-ready ‘plug and play’ industrial parks with complete infrastructure in or near 100 cities, in partnership with states and the private sector, utilising town planning schemes. Twelve of these industrial parks will be sanctioned under the National Industrial Corridor Development Program.
Rental housing with dormitory-type accommodations for industrial workers will be facilitated in PPP mode with viability gap funding (VGF) support and commitments from anchor industries.
Finally, the government will simplify the rules and regulations for Foreign Direct Investment (FDI) and Overseas Investments to facilitate FDIs, prioritise certain sectors, and promote the use of the Indian Rupee for overseas investments.
The 54th edition of Munich Fabric Start, alongside Bluezone and Keyhouse, will be held on September 3-4, 2024, under the theme "Intuition". This premier German platform for the international fashion and textile industry invites attendees to reconnect with their inner voice, showcasing the latest trends for the Autumn/Winter 25/26 season and exploring innovative materials and future technologies.
Spanning over 40,000 square meters, the event transforms Munich into a central hub for designers, product managers, and fashion professionals. Nearly 1,000 collections from premium suppliers, including Akin, Albini, Amanda Kelly, and many others, will be presented. The event will feature eight distinct areas: Additionals for accessories, Fabrics for material trends, ReSource for sustainable textiles, Bluezone for denim and streetwear, Design Studios for global trend offices, Keyhouse for groundbreaking showcases, Sustainable Innovations for new materials, and The Source for apparel manufacturers and sourcing services.
Sebastian Klinder, Managing Director of Munich Fabric Start, emphasizes the strategic decision to shorten the event to two days to align with industry needs and market trends favoring more efficient, cost-effective events. Frank Junker, Creative Director & Partner, highlights the relevance of the "Intuition" theme and the event's focus on balancing simplicity with exploration, providing a platform for creative discoveries and innovative solutions.
A key highlight will be a trend lecture by renowned forecaster Li Edelkoort on September 4, offering insights into future fashion and textile trends. The program also includes numerous lectures, discussions, and workshops. Notable sessions include Monsieur-T's BluezoneDenimined Trends presentation, a discussion on sustainable material developments led by Simon Angel, and a conversation with DrishtiMasand of adidas on the circular economy.
Additional highlights include Peclers Paris’ presentation on women’s fashion trends and a panel on the Denim Deal in Germany. Anna Franziska Michel will discuss AI in fashion, and a session on the Corporate Sustainability Due Diligence Directive will feature insights from industry leaders. The event promises a high-quality working atmosphere and valuable networking opportunities for the fashion community.
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.
