A Niti Aayog report highlights, India’s textile sector needs significant reforms to maintain global competitiveness. Titled, ‘Trade Watch July-September (Q2) FY25,’ the report emphasizes the sector's importance to India's industrial output, employment, and exports, which reached $34.2 billion in 2023.
Despite accounting for 5 per cent of India's total exports, the textile industry's global trade share remains a modest 4 per cent, ranking India sixth worldwide. While India excels in natural fiber-based textiles like cotton and carpets, it lags in apparel and technical textiles, where countries like Bangladesh and Vietnam are more dominant, the report points out.
India's presence in man-made textiles is moderate, and it trails in high-value technical textiles, a sector led by China, Germany, and South Korea, the report further shows. The Indian textile market needs to improve its supply chain integration, cost-efficiency, and adherence to sustainability standards to remain competitive in the global textile market, the report.
Furthermore, India's textile exports registered a slight decline in FY24 to t $35.94 billion, while competitors like Bangladesh and Vietnam achieved approximately $44 billion. Over the past six years, India's T&A exports have grown by only 0.8 per cent annually, well below the global rate of 3.5 per cent.
The report notes, India’s textile industry lacks product diversification, with over half of the textile exports relying on just 134 items. It also stresses India's dependence on China for synthetic fiber and technical textile raw materials.
Additionally, the report acknowledges the impact of changing geopolitical dynamics, particularly the US-China trade shifts, which create both challenges and opportunities for India. To capitalize on these shifts, India must enhance its ‘ease of doing business,’ improve trade infrastructure, and align with international regulatory standards.
