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.
