Textile and apparel sector is a significant contributor to the economic progress of the country, accounting for 4%of GDP in 2012.
The textile market in India is expected to see strong growth due to the abundant availability of raw materials, especially silk, jute, cotton and wool. Moreover, the industry growth has been spurred by the presence of skilled workforce in the country which has made it one of the major sourcing hubs and the world’s second-largest producer of textiles and garments. Currently, the overall textile and apparel sector accounts for about 24% of world’s spindle capacity and 8% of global rotor capacity and is expected to reach USD 223 billion by 2021.
This report: Snapshot: Textile & Apparel sector in India provides an overview of the industry. As an important contributor to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings, the textile sector in India will see strong growth which will be further sustained by improved domestic consumption as well as increased export demand. Contributing 4% to India’s GDP in 2012, the sector has also attracted direct foreign investments worth USD 1.11 billion from April 2000 to February 2014.
With the growing population acting as the key driver of the segment’s growth, the most significant change has been seen in the demand of man-made fiber production which recorded an increase of 4% during the period from April 2013 to February 2014. Furthermore, the apparel market in India saw a rise in cotton yarn production of about 10% during the same forecast period. The total cloth production by the mill sector registered 9% growth and cloth production by loom and hosiery increased by 2% and 9% simultaneously. Driven by the increased consumer demand for quality products, the organized apparel segment is also expected to experience growth at a CAGR of more than 13% in the coming years.
India is already a leading player in the textile and apparel sector. The textile export currently stands at USD 28.53 billion in 2013-2014 from USD 24.90 billion in 2012-2013, recording a growth of 14.58% in the same period. Within the next three years, the garments export is expected to reach USD 60 billion mainly because of government support.
Fuelling the demand for textile products in India are changing lifestyle, increased focus on quality, rising disposable income as well as greater export demand. The recent proposed hike in FDI limit in multi-brand retail will also encourage investments from international players in the sector, which is expected to be worth USD 220 billion by 2020. Furthermore, as customers worldwide start buying apparels from India, the sector is will realize its immense potential to yield business, bringing in more investments along the entire value chain – from the agricultural production to the final manufactured goods. Besides the FDI hike, the government of India is also attracting foreign investments through promotional visits to countries like France, Germany, Italy and Japan. The diverse range of products and vertically integrated supply chain will also act as some of the major drivers that will contribute towards the growth of the sector, which is expected to see a spending of USD 9.1 billion.
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