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Context: The Indian textile and apparel sector aims to achieve a $350 billion annual business by 2030, generating 3.5 crore jobs.
Union Minister for Textiles Giriraj Singh announced that the Indian textile and apparel sector aims for a total business of $350 billion annually by 2030, which could generate 3.5 crore jobs.
The industry’s size was estimated at $153 billion in 2021, with approximately $110 billion derived from domestic business.
In FY22, India ranked as the third-largest textile exporter globally, with a market share of 5.4%, and possessed the second-largest manufacturing capacity in the sector.
The textile industry contributed 2.3% to the country’s GDP and 10.6% to total manufacturing Gross Value Added (GVA).
The sector employs around 105 million people directly and indirectly.
Economic Downturn: The industry faced a decline starting in 2022-2023, marked by significant reductions in exports and domestic demand due to geopolitical issues and decreased demand from purchasing countries.
High Raw Material Prices: Rising prices for cotton and Man-Made Fibres (MMF) worsened the situation, with a 10% import duty on cotton making Indian cotton less competitive globally.
Quality Control Orders: The introduction of quality control orders on MMF disrupted raw material availability and pricing, leading to industry calls for the removal of the import duty during the off-season from April to October.
E-commerce Disruption: The sector is experiencing shifts due to e-commerce trends, with more manufacturers opting for direct retail to consumers.
Sustainability Demand: International brands are prioritising sustainability, leading to increased demand for vendors who can meet specific environmental standards.
Export Decline Due to Geopolitical Tensions: Export units were hit by geopolitical tensions and reduced demand in key markets, causing significant drops in business, particularly in FY23 and FY24. For example, Tiruppur saw a 40% decline in business.
High Raw Material Costs: High prices for cotton and Man Made Fibres (MMF), combined with a 10% import duty on cotton, made Indian products less competitive internationally.
Disrupted MMF Supply: Quality control orders on MMF have disrupted raw material availability, leading to price instability and impacting the industry’s ability to meet demand.
Changing Market Dynamics: The rise of e-commerce and sustainability demands from international brands, along with increased preference for comfort wear, are reshaping the traditional business landscape.
Changing Consumer Preferences: There is a growing consumer preference for comfort wear, coupled with shifts in shopping habits, particularly in rural and semi-urban areas.
Labour Costs: Labour constitutes around 10% of production expenses, with trained textile workers earning Rs 550 daily and unskilled workers earning Rs 450.
Investment Goals: To achieve the $350 billion target, the industry anticipates a $100 billion investment across various segments by 2030.
Focus on Technology: The industry must emphasise technology adoption and workforce skilling to enhance productivity and reduce waste.
Strengthening Supply Chains: Efforts will be made to strengthen supply chains to mitigate disruptions and ensure timely availability of raw materials and finished products.
Raw Material Availability: Removing the 10% import duty on cotton during off-season months (April to October) is crucial for competitive pricing.
Technology & Skilling: The sector must adopt technology and train its workforce to improve productivity and reduce costs, with workers earning Rs 550 per day.
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