The Indian textile and clothing industry, heavily reliant on cotton, remains a cornerstone of the nation's economy, contributing 12 per cent to industrial production, 8 per cent to exports, and generating approximately Rs 40,000 crores in GST revenue. Employing around 110 million people, the sector has been growing at a CAGR of 6 per cent, despite facing numerous challenges. This growth is attributed to the availability of domestic cotton and proactive government policies.

Ambitious growth targets

India aims to scale its textile industry from a current size of $162 billion to $350 billion by 2030. To achieve this, the industry requires a significant increase in raw material production. Presently, India produces about 5.5 billion kgs of cotton fibers and 4 billion kgs of man-made fibers (MMF). The target necessitates expanding raw material production to 20 billion kgs.

Government initiatives

The NDA Government, under the leadership of Prime Minister Narendra Modi, has recognized the urgent need to address raw material challenges to bolster global competitiveness and drive growth. Several policy initiatives have been implemented to support this goal:

Technology mission on cotton: The industry is calling for the announcement of TMC 2.0 to enhance cotton production.

Duty exemptions: Import duties on Extra Long Staple (ELS) cotton have been exempted, and FTAs with UAE, Mauritius, and Australia allow duty-free imports of 300,000 bales of ELS cotton.

Financial support: Rs 17,822 crores have been allocated to the Technology Upgradation Fund (TUF) Scheme, and a Rs. 6,006 crores special package has been announced for the garment industry.

Skill development: The National Skill Development Corporation and the PMKVY scheme are being utilized to improve skills, with a dedicated Samarth scheme for the textile industry.

GST and MSME support: The GST rate for the entire cotton textile value chain has been standardized at 5 per cent, enhancing GST revenue from Rs 3,600 crores to Rs 35,000 crores and reducing clothing costs. The MSME sector benefits from new eligibility criteria and Covid relief packages.

PLI scheme: Promotes scale operations and encourages man-made fiber (MMF) and technical textiles production.

NTTM scheme: Provides Rs1,480 crores for technical textiles, bolstering innovation and production.

Removal of Anti-Dumping duties: Duties on PTA, MEG, and other man-made fibers and filaments have been lifted to reduce costs.

Policy impact and future prospects

SK Sundararaman, re-elected Chairman of the Southern India Mills’ Association (SIMA) and newly elected Chairman of SIMA CD & RA, has appealed for further measures, including the Technology Mission on Cotton and addressing the inverted duty structure in MMF and textile processing. He commended the government for various policies that have fostered industry growth and innovation.

The introduction of "Kasturi Cotton Bharat" has created a brand for Indian cotton, while the Bharat Tex Expo, launched in 2023, showcased India's potential as a global textile hub. The next Bharat Tex event is scheduled for February 14-17, 2024, expected to attract substantial international participation.

Leadership and future direction

At the recent 65th AGM of SIMA, Sundararaman was re-elected as Chairman for 2024-25. Alongside him, Durai Palanisamy was re-elected Deputy Chairman, and S Krishnakumar as Vice-Chairman. Their leadership is expected to drive continued progress in the sector, supported by ongoing government initiatives and policy enhancements.

Sundararaman also expressed gratitude to Union Finance Minister Nirmala Sitharaman for her support, including facilitating industry interactions and addressing grievances related to policy and duty structures.

In conclusion, the Indian textile industry is set for substantial growth, driven by strategic policy interventions and a robust support system aimed at enhancing both domestic and international market presence.