INDIA TEXTILE INDUSTRY TO REACH US$ 223 BILLION IN NEXT FIVE YEARS

The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India’s Gross Domestic Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP). This was stated by Mr. Sanjay Aggarwal, Chairman, Industry Affairs Committee, PHD Chamber of Commerce & Industry (PHDCCI)., today at the Technical Textiles Exhibition cum Buyer Seller Meet at PHD House, New Delhi.

Mr Sanjay Aggarwal also added that  the technical textile industry is also expanding proportionally in respect to the entire textile industry. In year 2015, Technical textiles accounted for around 29 per cent share of the global textile revenues. Demand for technical textiles is expected to stay steady during the period 2015-2020, due to a broadening application in end-use industries, such as automotive, construction, healthcare, and sports equipment etc.

In 2015, the global technical textiles market was valued at around $153 billion. On back of strong demand, the global technical textiles market is estimated to reach at $194 billion by 2020, with global consumption expected to surpass 40 million tones.

Investments

The overall textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 1.85 billion during April 2000 to March 2016.

Mr Sanjay Aggarwal said that development and industrialization are the main drivers for the demand of Technical Textile products in a country. Given the large scale at which emerging nations are industrializing, the market for technical textiles can only be expected to grow in tandem with industrial growth in different parts of the world.

The market for technical textile in India stood at Rs 92,499 crore in 2015-16 and expected to grow at 12 per cent CAGR and reach 1,16,217 crores by 2017-18. India is expected to play a key role in shaping the future technical textile market with consumers spending more on home textile, sportswear products, and medical products.

Technical Textiles provides new opportunity to the Indian textile industry to have long term sustainable future. Despite of achieving high growth rate the per capita consumption of technical textiles in India is 1.7 per kg vis-a-vis 10-12 kg in developed countries. Globally, the technical textiles contribute to about 29 percent of textile industry, in some of the western countries its share is around 50 per cent while in India it is a meagre 10 percent only.

Mr Ram A Poddar, Co-Chairman, Industry Affairs Committee, PHDCCI, said that India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers.

The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.

The Indian textiles industry is extremely varied, with the hand-spun and hand woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector.

The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.

According to application and use textiles materials are of two types; i.e. conventional textile and technical textile. Conventional textiles are fulfilling the basic demands like climate protection, increase in the aesthetic sense, and used traditionally for clothing or furnishing. On the other hand, Technical textiles, as a distinct set of textiles materials and products manufactured and use primarily for their technical performance and functional properties rather than their aesthetic or decorative characteristics.

Backgrounder

Textile industry has created various products by using such fibers. The result of these efforts has enhanced the growth of technical textiles.

Depending on their functional requirements and end-user applications, the diverse range of technical textiles has been grouped into around 12 Segments.

The textile industry employs about 40 million workers and 60 million indirectly. India's overall textile exports during FY 2015-16 stood at US$ 40 billion.

Government Initiatives

The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route.

Some of initiatives taken by the government to further promote the industry are as under:

• India’s first integrated textiles city, which will largely cater to the export market and build a brand for Indian textiles abroad, is likely to be set up in the state of Andhra Pradesh.

• The Clothing Manufacturers' Association of India (CMAI) has signed a memorandum of understanding (MOU) with China Chamber of Commerce for Import and Export of Textiles (CCCT) to explore potential areas of mutual co-operation for increasing apparel exports from India.

• The Department of Handlooms and Textiles, Government of India, has tied up with nine e-commerce players and 70 retailers to increase the reach of handlooms products in the Indian market, which will generate better prices and continuous business, besides facilitating direct access to markets and consumers for weavers.

• The Union Ministry of Textiles, which has set a target of doubling textile exports in 10 years, plans to enter into bilateral agreements with Africa and Australia along with working on a new textile policy to promote value addition, apart from finalising guidelines for the revised Textile Up gradation Fund Scheme (TUFS).

• The Government of India has started promotion of its ‘India Handloom’ initiative on social media like Facebook, Twitter and Instagram with a view to connect with customers, especially youth, in order to promote high quality handloom products.

• Subsidies on machinery and infrastructure

o The Revised Restructured Technology Up gradation Fund Scheme (RRTUFS) covers manufacturing of major machinery for technical textiles for 5 per cent interest reimbursement and 10 per cent capital subsidy in addition to 5 per cent interest reimbursement also provided to the specified technical textile machinery under RRTUFS.

o Under the Scheme for Integrated Textile Parks (SITP), the Government of India provides assistance for creation of infrastructure in the parks to the extent of 40 per cent with a limit up to Rs 40 crore (US$ 6 million). Under this scheme the technical textile units can also avail its benefits.

o The major machinery for production of technical textiles receives a concessional customs duty list of 5 per cent.

o Specified technical textile products are covered under Focus Product Scheme. Under this scheme, exports of these products are entitled for duty credit scrip equivalent to 2 per cent of freight on board (FOB) value of exports

• The Government of India has implemented several export promotion measures such as Focus Market Scheme, Focus Product Scheme and Market Linked Focus Product Scheme for increasing share of India’s textile exports.

• Under the Market Access Initiative (MAI) Scheme, financial assistance is provided for export promotion activities on focus countries and focus product countries.

• Under the Market Development Assistance (MDA) Scheme, financial assistance is provided for a range of export promotion activities implemented by Textiles Export Promotion Councils.

• The government has also proposed to extend 24/7 customs clearance facility at 13 airports and 14 sea ports resulting in faster clearance of import and export cargo.

• The Ministry of Textiles has approved a 'Scheme for promoting usage of geotechnical textiles in North East Region (NER)' in order to capitalise on the benefits of geotechnical textiles. The scheme has been approved with a financial outlay of Rs 427 crore (US$ 63.67 million) for five years from 2014-15.

Road Ahead

The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. The organised apparel segment is expected to grow at a Compound Annual Growth Rate (CAGR) of more than 13 per cent over a 10-year period.

The ‘Make in India’ efforts by Prime Minister Narendra Modi are going to be a big success and a real growth driver for the Indian manufacturing sector. Mr Sanjay Aggarwal said that I am sure our textiles industry would be one of the front-runners and core segments of the Indian manufacturing industry contributing 14 per cent of total industrial output and employing about 45 million people directly. Though the textiles industry has its huge contribution in terms of export earnings, industrial output and employment generation, when it comes to investment initiatives, Indian entrepreneurs are turning their backs on the sector.

Technical textiles wide range of applications, lack of competition, and growing consumer and industrial demands make it a big opportunity area and an attractive option to invest in. Moreover, factors conducive for the growth of manufacturing and consumption of Technical textiles are also available within the country. Though India is the second largest textile economy in the world after China, its contribution to the global Technical textiles industry is very less. Currently, there are very few market players in the Technical textiles segment.

Mr Vivek Seigell, Director, PHDCCI, said that the time has come to position India as manufacturing hub for technical textiles. In order to position us in the global market, we first need to understand technical textiles thoroughly. We need to create awareness among each vertical of the textiles industry. The government is keen on taking initiatives to promote technical textiles among the value chain, but efforts taken by the government are not enough. So, the first step into positioning India as a technical textiles hub is to carve out a clear vision, strategy and action plan for technical textiles. For this we need the support of the industry to map out existing technical textiles demand and future growth rates in each of the different technical textiles segments in domestic as well as global markets.

Present  at the Seminar, were Dr Arindam Basu, DG, Northern India Textile Research Association, Air Commodore Deooak Gaur, AVSM, Principal Director, Medical Services, IAF, Surgeon Rear Admiral Joy Chatterjee, VSM, Additional DG, Navy, and Mr VK Kohli, Director, Regional Office of Textile Commissioner, Ministry of Textiles, and Mr Viren Mehta, Vice President, - Marketing, Fibre to Fashion, apart from Mr Sanjay AGGARWAL, Chairman, Industry Affairs Committee, PHDCCI, Mr Ram A Poddar, Co-Chairman, Industry Affairs Committee, PHDCCI, Mr Vivek Seigell, Director, PHDCCI.