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 13 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 Modi Government’s major mission of “Make in India” is predicated on the basic assumption that it would encourage domestic manufacturing in a big way in as much as it is also highly helpful to generate employment to a greater number of people. Hence, production and exports stemming from light manufacturing segments such as leather products and textiles assume pre-eminent priority in the scheme of things of the authorities. The end of the restrictive Multi-fibre Arrangement (MFA), a sort of global trade pact on textiles and clothing that was in practice from 1974 till 2004 putting limits by way of quotas that developing countries could export in the form of yarn, fabrics and clothing to developed nations, provided a huge opportunity for competitive exporters such as India, Bangladesh and Vietnam. But it is more than a decade since the dismantling of the quota regime that India could not realize the abundant opportunities as other least-cost competitors had overtaken due to competitive cost, price and delivery schedules. However, the situation in the recent couple of years gives a glimmer of hope and solid ground for optimism as the Ministry of Textiles has become proactively busy in stitching together facilitative measures to impart a leg-up for the textile industry both for domestic consumption and also for exports.

The textile industry employs about 105 million people directly and indirectly. India's overall textile exports during FY 2017-18 stood at US$ 37.74 billion. 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.

Market Size

• The Indian textiles industry, currently estimated at around US$ 150 billion, is expected to reach US$ 230 billion by 2020. The Indian Textile Industry contributes approximately 2 per cent to India’s Gross Domestic Product (GDP), 10 per cent of manufacturing production and 14 per cent to overall Index of Industrial Production (IIP).
• The production of cotton in India is estimated to increase by 9.3 per cent year-on-year to reach 37.7 million bales in FY 2017-18. The total area under cultivation of cotton in India is expected to increase by 7 per cent to 11.3 million hectares in 2017-18, on account of expectations of better returns from rising prices and improved crop yields during the year 2016-17.
• Indian exports of locally made retail and lifestyle products grew at a compound annual growth rate (CAGR) of 10 per cent from 2013 to 2016, mainly led by bedding bath and home decor products and textiles.

Investment

• The 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$ 2.82 billion during April 2000 to December 2017.
• Some of the major investments in the Indian textiles industry are as follows:
• The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme named 'Scheme for Capacity Building in Textile Sector (SCBTS)' with an outlay of Rs 1,300 crore (US$ 202.9 million) from 2017-18 to 2019-20.
• Future Group is planning to open 80 new stores under its affordable fashion format, Fashion at Big Bazaar (FBB), and is targeting sales of 230 million units of garments by March 2018, which is expected to grow to 800 million units by 2021.
• Raymond has partnered with Khadi and Village Industries Commission (KVIC) to sell Khadi-marked readymade garments and fabric in KVIC and Raymond outlets across India.
• Max Fashion, a part of Dubai based Landmark Group, plans to expand its sales network to 400 stores in 120 cities by investing Rs 400 crore (US$ 60 million) in the next 4 years.
• In May 2018, textiles sector recorded investments worth Rs 27,000 crore (US$ 4.19 billion) since June 2017.

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. Apart from this following have been undertaken recently;

• The Union Ministry of Textiles, Government of India, along with Energy Efficiency Services Ltd (EESL), has launched a technology upgradation scheme called SAATHI (Sustainable and Accelerated Adoption of Efficient Textile Technologies to Help Small Industries) for reviving the powerloom sector of India.
• The Government has planned to connect as many as 5 crore (50 million) village women to charkha (spinning wheel) in next 5 years with a view to provide them employment and promote khadi and also, they inaugurated 60 khadi outlets which were renovated and re-launched during the completion of KVIC s 60th anniversary and a khadi outlet.
• The Textiles Ministry will organise 'Hastkala Sahyog Shivirs' in 421 handloom-handicrafts clusters across the country which will benefit over 1.2 lakh weavers and artisans.
• The Gujarat government's decision to extend its textile policy by a year is set. It is believes to attract Rs 5,000 crore (US$ 50 billion) of more investment in sectors across the value chain. The government estimates addition till now of a million units of spindle capacity in the spinning sector and setting up of over 1,000 units in technical textiles.
• The Textile Ministry of India earmarked Rs 690 crore (US$ 106.58 million) for setting up 21 ready made garment manufacturing units in seven states for development and modernisation of Indian Textile Sector.

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

• The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4 per cent.
• The Government of India plans to introduce a mega package for the powerloom sector, which will include social welfare schemes, insurance cover, cluster development, and upgradation of obsolete looms, along with tax benefits and marketing support, which is expected to improve the status of power loom weavers in the country.
• The Government of India has taken several measures including Amended Technology Up-gradation Fund Scheme (A-TUFS), launch of India Handloom Brand and integrated scheme for development of silk industry, for the strategic enhancement of Indian textiles quality to international standards.

Overall, apart from these recent initiatives, there were also flagship schemes to develop the country’s hoary textile industry that cover, among others, Schemes for the Development of Powerloom clusters, Integrated Scheme for Development of Silk Industry (ISDSI), Comprehensive Handloom Cluster Development Scheme (CHCDS), National Handicrafts Development Programme(NHDP) and the North East Region Textiles Promotion Scheme (NERTPS). There has also been a Scheme for Integrated Textile Parks (SITPS), launched a couple of years ago but has been unobtrusively making rapid strides in recent years. The primary aim of the SITPs is to foster integrated value chains with world class infrastructure at potential growth centres to propel them to a pole position by facilitating the textile sector to realize its full potentials. It aimed at addressing infrastructure constraints on cluster basis and enables the industry to meet global environmental standards, facilitate additional investment and generate job. The scheme is purely industry-driven and the role of the government is limited to part-funding and facilitating. In recent years, the scheme has helped to leverage investment and set up parks with production units and common infrastructure facilities. State governments too are involved in selection process and for various clearances to set up these parks. The Ministry of Textiles has granted Rs 152 crore for development of eight textile parks in various States so far.

Under its output-outcome framework for a spate of schemes for the current fiscal, the Textile Ministry has set apart a massive Rs 3094 crore to kick-start the growth momentum of this important industry for livelihood of millions and also to earn the much-needed foreign exchange through exports of Indian textile and clothing to overseas markets.

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. High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market. The domestic market for apparel and lifestyle products, currently estimated at US$ 85 billion, is expected to reach US$ 160 billion by 2025. The Indian cotton textile industry is expected to showcase a stable growth in FY2017-18, supported by stable input prices, healthy capacity utilisation and steady domestic demand.