The textile industry in India has historically played a significant role in the country’s economic standing. The significance of this cannot be overstated. The textile industry contributes to the nation’s manufacturing capability, employment generation, and foreign currency profits, in addition to meeting fundamental needs.
Evidence from a number of research shows that India’s textile sourcing process and production (including fibre, textiles, and textile manufacturing) is on the rise. There is an increase in the international trade surplus and an increase in the anticipated partial profitability of the global economy. Production, effectiveness (output per unit of input), and efficacy (actual output compared to planned output) are frequent indicators used when analysing the qualities of a company for fabric sourcing or for an industrial sector. Although they are closely related, different rankings for effectiveness may be obtained using each criteria.
30% of India’s total exports are in the textile industry. The textile industry is unique in that it can purchase its raw materials, manufacture its intermediate products, and sell its final goods without relying on any other industry.
As early as the late 1970s, India recognised the importance of trade and enacted limited liberalisation and privatisation as a means of fostering economic growth. The Indian economy was directed by a socialist/communist planned economy based on structural adjustment and industry licensing from 1948 till 1990. Export growth in India has been underwhelming.
Impact of COVID
As a consequence of the epidemic, all business activities were halted save for the provision of essential goods and services.
It was the same in the clothing and textile sectors. Here is an example of the pain they endured.
Closure of manufacturing
There was an instant shutdown of the industry for two to three months, with the exception of the small number of enterprises that had already shifted to PPE manufacture. For the following months, however, the bulk of the units ran at below-par utilisation rates.
The whole value chain was harmed by the epidemic because of the disruptions it caused in shipping and exports. In April and May of 2021, India’s net trade was about 50 percent lower week over week compared to the same period the year before. As a consequence of the unpredictability of the market, both foreign and local customers cancelled or put purchases on hold, causing the sector to lose out on orders.
Poor offline store sales
The retail clothes industry dropped for at least four to five months due to national shutdown laws. As a result, sales suffered greatly throughout the crucial holiday and festival seasons.
New consumer trends of the future emerged.
India’s e-commerce sales of consumer goods and apparel are projected to soar in 2022, thanks to the country’s rapidly expanding middle class. Because of the rise of telecommuting, more people are buying jeans and t-shirts instead of suits.
Five percent of India’s gross domestic product comes from the textile and garment industry. Only 7% of the sector contributed financially, while 11% of the money came from exports. India ranks as the world’s number six exporter of textiles and clothing.
Both linen and jute are exported extensively from India. India also produces 95% of the world’s hand-woven silk. It is estimated that India’s market for technology textiles is approximately $16 billion, or over 6% of the global total. A look at some of the measures the government has done to encourage the expansion of the textile industry:
- The government of India has implemented many export promotion initiatives targeted specifically at the textile sector. It has also enabled full foreign direct investment (FDI) using mechanised methods in the industry. Forecasts indicate that the Rs. 10,683 crores (US$ 1.44 billion) PLI plan would be a boon to the textile industry. The plan’s goal is to commend MMF (man-made fibre) clothing, MMF textiles, and 10 types of Technological Textiles products.
- With effect from January 1, 2022, the Indian government has declared a unified consumption tax rate of 15% on man-made fibres (MMF), MMF threads, MMF fabrics, and clothes.
- It was announced by Union Textile Minister Mr. Piyush Goyal that a giant handloom complex would be built in Manipur, and a handloom and handicraft village would be established in Moirang, Bishnupur.
- The Indian government allocated Rs. 17,830 crore ($2.2 billion) for the ‘Amended Technological Up-gradation Fund Scheme’ (A-TUFS) from 2016 to 2022 in an effort to boost the country’s textile industry and facilitate market liberalisation.
Future of the industry
India is embarking on a number of significant programmes to increase the sophistication of its manufacturing sector. The demand for personal protective equipment (PPE) suits and accessories has increased as a consequence of the coronavirus epidemic. The government is lending a hand to the services by giving money and tools.
Strong domestic demand and favourable terms of trade bode well for the future of India’s textile giant. The retail sector in India has seen extraordinary growth over the last decade as a result of increased materialism and disposable income, as well as the arrival of big global corporations like as H&M, Guess, and Next to the Indian market.
Rapid economic growth has increased disposable income. As a consequence, the amount of sales has increased, leading to a booming home economy.
India is the world’s sixth largest exporter of textile goods, including those used in the creation of clothes, household products, and high-tech gadgets. Almost 40 million people worldwide are employed in the wool business across agriculture and manufacture.
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