The global textile and apparel industry is a massive market, estimated at over $1.5 trillion. For decades, China has been the dominant player, but rising labor costs and geopolitical tensions are prompting many brands to look for alternative sourcing destinations. India, with its rich history in textiles, diverse raw material availability, and a large pool of skilled labor, is emerging as a strong contender to take the lead. Robert Antoshak, Partner, Gherzi Textile Organisation says, “India is a textile powerhouse with abundant raw materials, a skilled workforce, strong spinning, weaving capacity, diverse product range, competitive costs, government support, and a well-integrated supply chain."

Sectoral strengths

India's textile industry has strengths across the entire value chain.

Fibre: India is the world's largest producer of cotton and jute, and the second-largest producer of silk. It also has a growing presence in man-made fibres. As per the Ministry of Textiles, India's cotton production in the 2022-23 season was estimated at 34.34 million bales.

Yarn: India has a large spinning capacity, producing a variety of yarns for domestic and export markets. This gives it a competitive edge.

Fabrics: India produces a wide range of fabrics, from handloom to modern woven and knitted fabrics. The industry is known for its diverse designs and high-quality craftsmanship.

Apparel: The apparel sector caters to both domestic and international markets, from mass-produced garments to high-end fashion. It has a large pool of skilled tailors and garment workers. In FY23, apparel exports were $16 billion.

Positive government initiatives

The government has actively promoted the textile industry through various initiatives, such as the Production Linked Incentive (PLI) scheme and Mega Investment Textiles Parks (MITRA). The PLI scheme offers financial incentives to manufacturers for increasing production, while MITRA parks provide state-of-the-art infrastructure and support facilities to attract investment.

"The government's focus on infrastructure development and ease of doing business has created a favorable environment for textile manufacturers," says Sanjay Jain, President of the Confederation of Indian Textile Industry (CITI). "The PLI scheme and MITRA parks are game-changers that will help us compete with China and Bangladesh."

The government is also investing in training programs to enhance textile workers skill. The recent Economic Survey has highlighted the need for technological advancements and skill development to transform India into a global textile powerhouse. It highlighted challenges like limited FDI in the sector and a reliance on imported machinery. The Survey includes recommendations for addressing these challenges, such as attracting more FDI, promoting R&D, and supporting the modernization of existing units.

Diverse mix of raw materials

India is one of the world's largest producers of cotton, silk, and man-made fibers. This gives manufacturers a competitive advantage in terms of cost and quality. India is self-sufficient in most raw materials, which reduces our dependence on imports. The cost advantage allows India to offer high-quality products to customers.

Also, textile manufacturing capabilities have grown significantly in recent years, with investments in modern technology. The government is encouraging the adoption of sustainable manufacturing practices to reduce the industry's environmental footprint.

Despite its strengths, the Indian textile industry faces several challenges, including infrastructure bottlenecks, a fragmented industry structure, and competition from other low-cost countries. The government is working to address these challenges through various initiatives, such as improving connectivity, promoting consolidation, and providing export incentives.

However, India has the potential to become a dominant player in the global textile market. Ashish Jain, Dy Director General FIEO “The textile industry stands at a crossroads, with potential to become a leading global player. However, realizing this potential requires a concerted effort to overcome existing challenges and seize opportunities. As industry leaders call for a shift in mindset and strategy, the future of India's textile sector is promising, provided stakeholders are willing to act decisively and collaboratively. The journey to becoming a textile powerhouse is underway, and the world is watching.”