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Dominated by MSMEs, the Indian textile industry faces significant challenges in funding and access to technical expertise, according to a recent CRISIL Ratings report. These barriers hinder modernisation, affecting efficiency and global competitiveness. The fragmented structure of the sector limits diversification and awareness of labor rights, contributing to tough working conditions.
To address these gaps, government initiatives like the PM MITRA Parks scheme aim to provide advanced infrastructure and support for smaller businesses, addressing issues like inadequate logistics, e-commerce infrastructure, and consistent power supply.
Despite these hurdles, rising domestic demand, driven by a growing middle class, increased disposable incomes, and a trend toward athleisure and workwear, is expected to fuel growth. The Indian government targets $100 billion in textile exports by 2030 as against $44 billion in 2022. However, this goal depends on overcoming global competition, fluctuating cotton prices, and the absence of key trade agreements.
The report highlights, India is a dominant producer of cotton, which accounts for 23 per cent of global output. Yet, it lags in other areas like weaving and processing, where competitors like China excel. Although India has a 3 per cent share in the global ready-made garments market, it remains behind smaller rivals like Vietnam and Bangladesh due to better technology and lower costs.
Recent data indicates, India’s textile exports increased by 11.56 per cent Y-o-Y in Oct’24 to $1.83 billion while apparel exports rose by 35.06 per cent to $1.23 billion. The need for more Free Trade Agreements (FTAs) is critical, as competitors often benefit from duty-free access to key markets.
To meet evolving global demands, India must diversify from its cotton-centric production to synthetic and sustainable textiles, aligning with global shifts towards polyester. Expanding beyond cotton and investing in sustainable practices will be crucial for the Indian textile industry’s long-term success and competitiveness on the international stage.
The Lenzing Group, a leader in wood-based specialty fibers, highlighted its cutting-edge sustainable textile solutions at The Lenzing Conclave in Surat, hosted at Orange Megastructure LLP. The event gathered key stakeholders from the trade and greige fabric sectors, offering an exclusive platform to explore Lenzing’s innovative fibers for categories like Traditional Wear, Ethnic Wear, Fashion Knits, Intimate Wear, Fashion Wovens, and Denim.
Lenzing showcased its flagship products, Tencel A100, Tencel LF, and LenzingEcovero, emphasizing their superior softness, high lustre, and versatility. Tencel A100 stands out as a silk alternative, Tencel LF enhances cotton blends for durability, and LenzingEcovero promotes eco-friendly practices for diverse applications.
Avinash Mane, Senior Commercial Director for AMEA & NEA at Lenzing Group, stated, “The market demands fabrics that combine superior performance, lasting quality, and environmental responsibility. Through innovations like Tencel and LenzingEcover, we aim to provide comprehensive solutions, including fiber development, technical expertise, and supply chain optimization. Our focus is on fostering collaboration to set new sustainability standards.”
The conclave also spotlighted Lenzing’s holistic support for the textile industry, encompassing fiber and product innovation, technical assistance, marketing support, and supply chain solutions. Discussions at the event reinforced Lenzing’s commitment to sustainability and innovation, strengthening ties within the textile community.
Lenzing expressed gratitude to participants for their role in making the conclave a success and reaffirmed its dedication to driving sustainable advancements in textiles.
Kering has become the first company worldwide to adopt science-based targets for land and freshwater, marking a significant step in biodiversity protection. The announcement, made during COP16 on October 30, follows Kering’s year-long participation in the Science Based Targets Network (SBTN) corporate pilot. This achievement cements Kering's leadership in sustainability within the fashion industry and beyond.
The Group’s science-based targets encompass its direct operations, including Kering-owned tanneries, factories, and upstream suppliers. A key focus is the Arno basin in Tuscany, where most of Kering’s tanneries and supplier tanneries are situated. The basin represents a substantial portion of the Group’s water use, making it a critical area for the company's first freshwater quantity target.
Kering’s land-related targets aim to halt natural ecosystem conversion, reduce its land footprint, and drive engagement in relevant landscape initiatives. These actions align with the Group’s long-standing commitment to biodiversity and sustainable practices.
The adoption of these science-based targets underscores Kering’s strategic approach to addressing environmental impacts and promoting global biodiversity restoration. By leading this initiative, Kering sets a benchmark for the fashion industry and encourages cross-sector participation in sustainable development goals.
British actor Callum Turner has been appointed as the newest brand ambassador by brand Louis Vuitton.
Known for his roles in diverse projects including the historical drama ‘The Capture,’ the coming-of-age film,’Queen and Country and romantic comedy ‘Emma,’ Turner is particularly famous for his portrayal of Theseus Scamander in ‘Fantastic Beasts: The Crimes of Grindelwald.’ His penchant for perfection alongwith the diversity of roles played by him align perfectly with Louis Vuitton’s dedication to exceptional craftsmanship and constant quest for innovation, says the brand. It released several photographic images and a video with Turner carrying a Speedy P9 by Pharrell Williams to cement this partnership.
Turner joins several other individuals including football star Jude Bellingham, Korean music superstar, Lisa, and rapper Pusha T, who were all named as ambassadors by the French luxury brand earlier this year.
Hyve Group, a global leader in exhibitions, has announced the integration of its Pure brand into Spring Fair at Birmingham NEC from February 2-5, 2025. This move will create Moda x Pure, bringing together Pure and Moda under one roof to enhance Spring Fair’s position as a premier destination for the fashion sector.
The decision marks the end of Pure London x JATC as a standalone event at London Olympia. Hyve Group cited evolving market demands and the need for a more cohesive buying space for fashion retailers as driving factors for the transition. With Spring Fair already attracting key buyers, the merger ensures Pure’s legacy continues in a format better suited to industry needs.
Jackson Szabo, Retail Portfolio Director at Hyve Group, highlighted Pure’s 30-year history but acknowledged its current format is no longer sustainable. “By combining Pure and Moda at Spring Fair, we adapt to industry changes and strengthen our portfolio while continuing to offer commercial opportunities for brands and buyers,” he said.
Pure’s iconic catwalk will remain a highlight at Moda x Pure, showcasing trends and collections. The collaboration will include expert trend insights to support buyers and brands in staying competitive.
Hyve Group will also continue hosting Scoop International and Source Fashion at Olympia London. Scoop, a leading trade show for contemporary fashion, takes place February 9-11, 2025, before moving to the venue’s National Hall in July 2025. Source Fashion, Europe’s top responsible sourcing show, will continue its biannual editions, with the next scheduled for February 18-20, 2025.
These changes reflect Hyve Group’s commitment to evolving with the industry while maintaining its leadership in delivering top-tier fashion events.
Fair Wear, a multi-stakeholder initiative for garment workers' rights, has joined forces with the European Outdoor Group (EOG) to improve working conditions across the outdoor apparel supply chain. The collaboration aims to foster long-term, positive change by leveraging their collective influence.
Fair Wear, with 25 years of expertise in supporting fair employment practices, and EOG, representing over 143 organisations in the European outdoor industry, will address industry challenges through practical solutions. A key focus is integrating Fair Wear's recently launched Human Rights Due Diligence (HRDD) Academy into EOG’s network.
The Academy equips outdoor brands with actionable tools and expert guidance to implement human rights due diligence effectively and prepare for new regulations like the EU Corporate Sustainability Due Diligence Directive.
Victoria Lauer, HRDD Academy coordinator at Fair Wear, expressed optimism: “By partnering with EOG, we can significantly expand the HRDD Academy’s reach and its impact on improving working conditions in the outdoor industry.”
Katy Stevens, EOG’s head of CSR & sustainability, highlighted the importance of the partnership: “This collaboration strengthens our commitment to responsible supply chains by prioritising workers' rights as a core industry value.”
The organisations plan to drive change through in-person events and digital initiatives over the next year. This partnership underscores their shared vision for an outdoor apparel industry where garment workers globally enjoy safe, fair, and dignified employment.
Zara’s parent company Inditex has increased its reliance on air freight to transport clothing from factories in India to its logistics hub in Spain, shows recent trade data. Although this move will allow the company to bypass shipping delays, it is likely to impact the company’s commitment to reducing carbon emissions, as air transport generates far more emissions than maritime shipping.
As per unpublished data analysed by Reuters, alongside information from trade data provider Import Genius, in the 12 months leading up to the end of Aug’24, Inditex’s air shipments from India increased by 37 per cent to 3,865 from the previous year. A significant portion of these shipments —3,352— occurred after Jan’24, following a spike in attacks on container ships in the Red Sea. An analysis of this customs data by Swiss NGO Public Eye reveals, air freight accounted for 70 per cent of Inditex’s shipments from India in the first eight months of this year, up from 44 per cent in the same period last year.
According to Inditex, sea freight remains the primary mode for most Asian imports, but exceptional circumstances, like the Red Sea disruptions, necessitate alternative logistics. Inditex sources roughly half of its supplies from countries close to Europe, including Morocco, Portugal, Spain, and Turkey, but key suppliers remain in Asia, particularly Bangladesh, China, Pakistan, and India.
Many of Inditex’s air shipments from India arrive in Zaragoza, a crucial logistics hub for Zara. The airport, where Zara accounts for about two-thirds of cargo activity, saw a 39 per cent rise in cargo movements between Jan-Sep’24 compared to the previous year. As per figures from the Spanish Trade Agency, the value of fashion goods imported by air to Spain increased by 28 per cent over the past year.
This led to a 37 per cent rise in air transport-related emissions during the year ending Jan 31, 2024, as per Reuters. Transport now constitutes 12.1 per cent of Inditex’s total emissions, up from 8.4 per cent in 2022, although the company notes that changes in its reporting methodology make direct comparisons difficult. Inditex has set a goal to cut its Scope 3 emissions—which cover transportation—by 50 per cent by 2030, using 2018 as a baseline.
Inditex is committed to reducing emissions through various initiatives, including the use of alternative fuels, optimising transport routes, and improving shipment efficiency. Nevertheless, the recent spike in transport emissions could require the company to make deeper cuts in other areas of its supply chain, such as the production and processing of materials, to meet its sustainability targets.
As against $1.48 million in the corresponding period last year, Pakistan’s knitwear exports grew by 19 per cent to $1.76 billion in the first four months of the current fiscal year, spanning July-Oct’24-25, show latest figures from the Pakistan Bureau of Statistics.
Knitwear remains the largest segment within Pakistan's textile exports, underscoring its pivotal role in the country's overall export performance. The nation’s overall textile exports rose by 10.44 per cent during the July–Oct’24 period to $6.15 billion compared to $5.57 billion in the previous year.
This growth in knitwear exports was accompanied by significant growth in other textile categories. Second-largest contributor to Pakistan’s textile exports, RMG expanded by 25.4 per cent to $1.36 billion from $1.08 billion during the same period in FY24. Bedwear exports also increased by 13.17 per cent to $1.07 billion from $945 million in the corresponding months last year. This growth reflects the diverse appeal of Pakistan's textile products, which continue to draw interest from international buyers.
Experts attribute the rise in knitwear exports to several key factors, including enhanced compliance with global quality standards, increased production capacity, and growing demand for winter apparel in major markets such as the United States and Europe. Additionally, government incentives for exporters and relatively stable energy supplies have also helped boost the sector's performance.
However, the export sector continues to remain sensitive to shifts in global demand, rising production costs, and currency fluctuations. To maintain its growth momentum, it needs a sustained policy support and infrastructure development, emphasise analysts.
Going forward, growth in this key sector will be ensured by a continued collaboration between the government and industry stakeholders.
Bangladesh's apparel industry, a strong pillar of its economy, finds itself on shaky ground. While China's policy shift granting duty-free access to 100 per cent Bangladeshi apparel products is a golden opportunity, it also brings forth a complex web of contradictions and challenges. This intricate relationship, marked by dependence and competition, will profoundly impact Bangladesh's long-term trajectory in the global garment market.
China's shifting policy, a boon or bane?
China's decision to grant duty-free access to Bangladeshi apparel is part of its broader strategy to strengthen ties with Least Developed Countries (LDCs). This move, on the surface, seems like a significant win for Bangladesh, offering a gateway to the world's largest consumer market. However, the reality is quite different.
Table: Bangladehs-China exports
|
Year |
Bangladesh's Exports to China ($ bn) |
China's Exports to Bangladesh ($ bn) |
|
2022-23 |
0.676 |
18.6 |
|
Source: |
Export Promotion Bureau (EPB), Bangladesh |
Despite the duty-free access, Bangladesh's exports to China remain a mere fraction of China's total imports. This stark contrast highlights the challenges Bangladeshi manufacturers face in penetrating the Chinese market, including competition from domestic players, stringent quality standards, and complex distribution networks.
The fact is Bangladesh's apparel industry is heavily reliant on China for raw materials, particularly fibers, yarns, and fabrics. This dependence creates a vulnerability and any disruption in the supply chain can severely impact production and exports. While China's raw material dominance offers cost advantages, it also stifles the growth of Bangladesh's domestic textile industry. This over-reliance poses a long-term risk, hindering diversification and increasing susceptibility to price fluctuations and geopolitical uncertainties.
Table: Bangladesh raw materials imports from China
|
Raw Material |
Import from China (%) |
|
Cotton Fiber |
60% |
|
Synthetic Fiber |
70% |
|
Yarn |
45% |
|
Fabric |
30% |
|
Source: |
Bangladesh Textile Mills Association (BTMA) |
Competing on the global stage
Bangladesh and China are fierce competitors in the global apparel market, particularly in the European Union and the US. While Bangladesh has made significant strides in recent years, surpassing China in terms of growth in certain markets, the challenge remains formidable. China's vast manufacturing capacity, advanced technology, and established supply chains give it a competitive edge. To stay ahead, Bangladesh needs to focus on product diversification, innovation, and skills development.
Table: Bangladesh, China apparel exports
|
Market |
Bangladesh's Apparel Exports ($ bn) |
China's Apparel Exports ($ bn) |
|
EU (2022) |
23.4 |
223 |
|
US (2022) |
9.2 |
23.8 |
|
Source: |
World Trade Organization (WTO) |
Bangladesh's relationship with China in the apparel sector is fraught with contradictions. While China offers a massive market and a source of affordable raw materials, it also poses a significant competitive threat. This duality requires a strategic approach.
Bangladesh needs to leverage the duty-free access to expand its exports to China while simultaneously reducing its dependence on Chinese raw materials by investing in domestic textile production. Also, focusing on niche markets, sustainable practices, and value-added products can help Bangladesh differentiate itself from Chinese competition.
The road ahead is not without challenges. Bangladesh's apparel industry faces rising labor costs, infrastructure bottlenecks, and compliance issues. However, the country's young and vibrant workforce, entrepreneurial spirit, and government support provide a strong foundation for growth.
By navigating the complexities of its relationship with China, Bangladesh can unlock the full potential of its apparel industry and solidify its position as a global garment manufacturing powerhouse.
India’s textile industry players recently announced their Q2 FY25 results and the performances were mixed. While some companies exceeded expectations, others faced challenges, highlighting a complex state of affairs. However, despite some setbacks, the long-term outlook for the industry remains positive.
Highs and lows marked the quarter
Varying revenue growth: While some companies like Vardhaman Textiles reported 4.38 per cent year on year (YoY) revenue increase others like Ambika Cotton and Sutlej Textiles and Industries Limited saw a drop. This disparity highlights the uneven nature of the recovery in the sector.
Profitability concerns: Despite revenue growth, profitability remains a concern for some companies. Vardhaman Textiles, for instance, saw a 17.47 per cent quarter on quarter decline in profit, despite a YoY increase. This suggests that increasing input costs and other operational challenges are impacting margins.
Strong exports: The export market continues to be a bright spot for the industry, with several companies reporting strong growth in overseas shipments. This is driven by factors such as the ongoing recovery in key export markets and the competitive advantage offered by Indian textiles.
Table: Revenue and profit growth
|
Company |
Revenue growth (YoY) |
Profit growth (YoY) |
Key takeaways |
|
Vardhaman Textiles |
4.38% |
46.57% |
Strong YoY growth in both revenue and profit, but QoQ profit decline raises concerns. |
|
Arvind Limited |
14% |
7% |
Robust recovery from Q1 challenges, driven by strong performance in textile division. |
|
Welspun India |
15.50% |
Strong revenue growth driven by exports, but profitability data not yet available. |
|
|
Ambika Cotton Mills |
Faced revenue decline, highlighting challenges in the domestic market. |
Factors influencing performance
There are several reason for this kind of performance in the sector. Fluctuating raw material prices is a major one. Volatility in cotton prices continues to impact the industry, affecting input costs and profitability. Global economic slowdown too is impacting demand for textiles, particularly in the export market. Increasing competition from countries like Bangladesh and Vietnam is putting pressure on Indian textile companies. However, government initiatives such as the Production Linked Incentive (PLI) scheme are expected to provide a boost to the industry in the long term.
While the long-term outlook for the industry remains positive, some concerns still needs to be addressed. First, the disparity in performance between different companies highlights the need for greater consistency and resilience in the sector. Despite revenue growth in some cases, declining profits is a concern that needs to be addressed through cost optimization and efficiency improvements. And while exports are currently strong, the industry needs to reduce its dependence on overseas markets and focus on strengthening domestic demand.
Overall, the Q2 FY25 performance of the Indian textile industry is mixed compared to the same period last year. While some companies have shown strong growth, others have faced challenges. The industry is facing complex environment with various headwinds and tailwinds. The long-term outlook remains positive, but addressing the current challenges will be crucial for sustained growth.
