top of page

Revitalizing India's Textile and Apparel Industry

The aim of the 'Make in India' initiative is to position India as a premier manufacturing hub and boost employment opportunities. The key problem with manufacturing as a source of employment generation is that parts of it are increasingly becoming very capital intensive and employ very few people.  In contrast, the textile industry (second only to agriculture) stands out as a notable generator of employment (employing 4.5 Cr people directly and 10Cr individuals in related industries), relative to capital investment, making it pivotal for the success of the 'Make in India' initiative.

From a global perspective, India's textile and garment exports have witnessed a decline of 7.6 percent over the past five years, falling to $34.24 billion in 2023 from $37.16 billion in 2018. Concurrently, textile and garment imports surged by 25.46 percent to $9.18 billion in 2023 from $7.32 billion, indicating unmet domestic demand. India's apparel exports in 2023 were a mere $14.5 billion, significantly trailing behind leading exporters like China ($114 billion), the EU ($94.4 billion), Vietnam ($81.6 billion), and even Bangladesh ($43.8 billion). While Bangladesh's and Vietnam's garment exports surged by 69.6% and 81.6%, respectively, from 2013 to 2023, India's grew by a meagre 4.6%, highlighting a missed opportunity to leverage the 'China + 1' strategy adopted by Western nations.

Within the Indian context too, the textile and apparel sector's performance pales in comparison to other industries. According to Annual Survey of Industries (ASI) data, the share of total invested capital in the textiles sector dwindled from 11.8% in 2001 to 6.06% in 2022. Similarly, textiles' contribution to total industrial output declined from 12.44% in 2001 to 6.93% in 2022, while its share in Indian exports plummeted from 25.6% in 2001 to 7.66% in 2023.

Addressing the root causes of this decline is imperative to harness manufacturing as a driver of India's employment growth.

At a micro level, textile and apparel manufacturers grapple with escalating costs, operational inefficiencies, outdated processes, absence of culture centred on product quality and a lack of service-oriented mindset. To address these issues, factories must invest in enhancing efficiencies, productivity, supply chain optimization, technological upgrades, and human capital development.

On a macro level, initiatives to enhance the competitiveness of Indian textiles include promoting the production and export of synthetic apparel, streamlining fabric supplies/imports, addressing potential non-tariff barriers in free trade agreements (FTAs), liberalizing labour laws, and aligning more factories with fast fashion industry (FFI) standards.

Despite apparent concerns, it's crucial to recognize that the presented data and observations emanate from a hopeful perspective seeking innovative solutions.

Let's strive together to restore the Indian textile industry to its former glory.

41 views1 comment

1 Comment

Gr8 & Very Informative

bottom of page