India aims to boost its textile exports to $100 billion by 2030, as per the India Brand Equity Foundation (IBEF) under the Ministry of Commerce. During this period, India’s textile and apparel market is projected to grow at a 10 per cent CAGR, reaching $350 billion by 2030.
As the world’s third-largest exporter of textiles and apparel, India ranks among the top five in several categories. The sector contributes 2.3 per cent to India’s GDP, 13 per cent to industrial production, and 12 per cent to total exports. According to the IBEF report, the textile industry’s GDP contribution is expected to nearly double to 5 per cent by 2030.
In Union Budget 2024-25, the government increased funding for the textiles sector by Rs 974 crore, bringing the total allocation to Rs 4,417.09 crore. Funding for research and capacity building was also raised to Rs 686 crore, and the National Technical Textiles Mission saw a 120.59 per cent increase in funding to Rs 375 crore.
However, reduced cotton sowing during the ongoing kharif season could hinder India’s ability to seize additional export orders, especially given the crisis in Bangladesh’s garment industry. By Sep 13, 2024, India’s cotton sowing dropped to 11.24 million hectare, down from 12.36 million hectare last year, according to the Ministry of Agriculture.
While increased sowing in Tamil Nadu, Telangana, and Karnataka might push the total sown area to 11.6 million hectare, lower cotton production is expected to impact textile exports. In FY24, India’s textile exports fell to $34.40 billion from $35.55 billion in FY23. Despite the government’s target to exceed $40 billion in textile exports by FY25, declining cotton production casts doubt on reaching this goal, says Abhash Kumar, Assistant Professor – Economics, Delhi University.
India’s cotton production has been declining since it peaked at 36 million bales in FY20. By FY24, it is projected to fall to 32 million bales. Challenges such as outdated seed technology and labor shortages have reduced productivity, prompting many farmers to switch to alternative crops like soybean. The rising cost of cotton and a 10 per cent duty on cotton fiber imports pose further risks to export competitiveness, warns Mihir Parekh, Foundation for Economic Development.
