Introduction
- The textile industry in India has long been a key component of the nation’s economy and culture, with deep historical roots that span centuries. From traditional handloom weaving to modern industrial manufacturing, this sector has evolved, shaping both the national identity and the economic landscape.
- Today, it continues to play a critical role, contributing significantly to India’s GDP, industrial output, and employment.
- Despite facing numerous challenges, the industry is on an ambitious trajectory, aiming to achieve a $350 billion annual business and generate 3.5 crore jobs by 2030.
Current Status of the Textile Industry in India
- Economic Contribution: The textile industry accounts for 2.3% of India’s GDP, 13% of industrial production, and 12% of the nation’s export earnings.
- Employment Generation: The sector is one of India’s largest employers, with 45 million people directly employed and an additional 100 million relying on related industries for their livelihoods.
- Global Positioning: India is the second-largest producer of textiles and garments worldwide, holding a 4% share in the global textile market. India is the 6th largest exporter of Textiles & Apparel in the world in 2023.
- Production and Export Goals: By 2030, India aims to achieve $250 billion in textile production and $100 billion in textile exports, further strengthening its position in the global market. Major textile and apparel export destinations for India are USA and EU and with around 47% share in total textile and apparel exports.
- Regional Hubs: Key textile manufacturing regions in India include Gujarat, Maharashtra, Tamil Nadu, Uttar Pradesh, and West Bengal, each specializing in various segments such as cotton textiles, silk, and handloom products.
Key Segments of the Textile Industry
- Cotton
- Commercial Importance: India is the largest producer of cotton globally, accounts for 23% of total global cotton production. India cultivates all four major cotton species: Gossypium Arboreum and Gossypium Herbaceum (Asian cotton), Gossypium Barbadense (Egyptian cotton), and Gossypium Hirsutum (American Upland cotton). The Central Zone (which comprises states like Gujarat, Maharashtra, and Madhya Pradesh) was the biggest producer of cotton in India in 2022-23. The Southern Zone (which comprises states like Telangana, Andhra Pradesh, Karnataka, and Tamil Nadu) is the second biggest producer of cotton.
- Economic Impact: Cotton supports over 6 million farmers and benefits 40-50 million people in allied industries, playing a key role in India’s foreign exchange earnings. Referred to as “White Gold,” cotton remains a vital economic commodity.
- Governing Body: Cotton Corporation of India (CCI): The Cotton Corporation of India was established in July 1970 under the administrative control of the Ministry of Textiles, the Government of India as a Public Sector Undertaking under the Companies Act 1956.
- Global Ranking: India leads the world in cotton acreage and ranks second in both cotton production and consumption globally.
- Technical Textiles
- Definition: These are textiles specifically designed for functional applications, rather than aesthetic purposes. They find use in various industries, including healthcare, agriculture, and construction.
- Material Composition: Technical textiles are made from natural and synthetic fibers such as Nomex, Kevlar, Spandex, and Twaron, which are engineered for performance.
- Market Overview: India is the fifth-largest producer of technical textiles, with a market valued at $22 billion. Exports in this category grew to $2.85 billion in 2021-22.
- Silk
- Global Standing: India ranks as the second-largest producer of silk and is the largest exporter of handwoven silk fabrics. The major silk-producing states in the country are Andhra Pradesh, Assam, Bihar, Gujarat, Jammu & Kashmir, Karnataka, Chhattisgarh, Maharashtra, Tamil Nadu, Uttar Pradesh, and West Bengal.
- Production Specialization: India is unique in that it is the only country producing all four types of silk: Mulberry, Tussar, Muga, and Eri, each of which is highly valued for its unique qualities.
- Governing Body: The Indian Silk Export Promotion Council (ISEPC): Sponsored by the Ministry of Textiles, Government of India, the ISEPC is an apex body of the exporters, manufacturers and merchandisers.
- Jute
- Environmental Benefits: Jute, known as the “golden fiber,” is eco-friendly and renewable, making it an important sustainable material.
- Global Role: India produces 75% of the world’s jute, with West Bengal being the major production center for this crop.
- Governing Body: National Jute Board: The National Jute Board was framed by the Ministry of Textiles, Government of India, in 2008. The board works towards human resource development for innovation and the exploration of new ideas.
- Jute Product Development & Export Promotion Council (JPDEPC): The JPDEPC was created in 1958 to advocate the exports of jute and jute products in India. The activities of the council are to arrange fairs and expositions, analyze the buyer-seller market, and act as a registration authority for exporters. The management of the council is supervised by a committee of 12 people, two of whom were nominated by the government of India. Presently, the council has 250 members covering various segments of manufacturing and trading of jute products.
Government Initiatives to Support the Textile Sector
- PM MITRA Parks Scheme: Aimed at developing world-class textile infrastructure, this scheme promotes Public-Private Partnerships (PPP) with a ₹4445 crore budget allocation, which extends through 2027-28.
- Production Linked Incentive (PLI) Scheme: Focused on enhancing production in man-made fibers (MMF) and technical textiles, this scheme provides financial incentives for meeting specific investment and turnover targets.
- Amended Technology Upgradation Fund Scheme (ATUFS): This initiative offers capital subsidies for modernizing textile infrastructure, making the sector more competitive and efficient.
- National Technical Textile Mission (NTTM): The NTTM promotes research and development, market growth, export, and skill development within the technical textiles segment.
- Samarth Scheme: Aimed at capacity building, this scheme offers skill development programs that align the workforce’s capabilities with industry needs.
- FDI in Textile: The Indian government allows 100% Foreign Direct Investment (FDI) in the textile and apparel sector under the automatic route, making the industry an attractive investment destination.
- Branding Initiatives: One such initiative, “Kasturi Cotton India,” seeks to promote Indian cotton as a premium product in international markets.
Challenges Facing the Textile Sector
- Fragmented Value Chain: The sector is highly fragmented, dominated by micro, small, and medium-sized enterprises (MSMEs), which results in inefficiencies and challenges in scaling operations. For instance, in the handloom sector, around 30 million people are engaged, but many work under outdated techniques without advanced infrastructure. This makes it difficult to meet international quality standards and keep up with global demand.
- Raw Material Issues: Despite being the largest cotton producer, India faces challenges with contamination and low fiber quality, which negatively impacts product quality. According to a report by the Cotton Corporation of India, about 30% of India’s cotton is contaminated, which affects the spinning quality and results in lower market prices.
- Technological Gaps: Many areas of textile manufacturing, especially in weaving and processing, rely on outdated technology, leading to higher costs and inefficiencies. According to the National Textile Policy, while advanced technologies are being used in segments like synthetic fiber production and garment manufacturing, the weaving sector in India largely remains dependent on manual labor and old machinery. This has led to India losing its competitive edge in comparison to countries like China, where large-scale mills use automated looms that allow for faster and cheaper production.
- Global Competition: Countries such as Bangladesh, Vietnam, and China have advantages, such as lower labor costs and more favorable trade agreements, which make it difficult for India to compete effectively. In 2020, Bangladesh’s textile sector recorded a growth in exports of $34 billion, making it the second-largest exporter of ready-made garments after China. Bangladesh’s lower labor costs and favorable trade deals with the European Union and the US give it a significant advantage over India. As a result, India struggles to compete in global markets, especially in low-cost, high-volume segments.
- Environmental Concerns: Textile manufacturing has significant environmental consequences, including water pollution, energy consumption, and labor exploitation. A 2019 study by the Environmental Protection Agency (EPA) indicated that the textile industry is the second-largest polluter of water globally, with India being one of the leading contributors. Textile dyeing and finishing processes consume approximately 93 billion cubic meters of water annually in India, and a significant portion of this water is polluted with toxic chemicals, causing widespread damage to water bodies and agricultural land.
- Regulatory Hurdles: The complexity of regulatory frameworks and the process of accessing government schemes often lead to delays and increased costs for manufacturers. The implementation of the Goods and Services Tax (GST) in India initially posed challenges for the textile sector, particularly for smaller players who were unprepared to comply with the new tax structure. Many MSMEs faced delays in getting input tax credits and faced logistical issues with inter-state taxation.
See more: Coral Reefs: Types, Formation, Threats and Significance | UPSC
Way Forward
- Technology Upgradation: The sector should invest more in research and development and adopt cost-effective automation technologies that improve productivity and reduce operational costs.
- Focus on Weaving and Processing: The weaving and processing segments need greater attention and investment, particularly through higher subsidies under the ATUFS to modernize these crucial areas.
- Sustainability Practices: India must prioritize eco-friendly manufacturing practices, such as circular design, water conservation, chemical management, and improving workplace safety standards.
- Infrastructure Development: There is a need for more plug-and-play industrial parks with state support to facilitate the growth of modern textile facilities.
- Export Diversification: India should aim to expand its export markets, exploring new regions like Africa, Japan, and Australia, while continuing to strengthen its presence in traditional markets.
- Strengthen Technical Textiles: Building international collaborations to enhance innovation and technology transfer will help India strengthen its position in the rapidly expanding technical textiles segment.
