Fundamental analysis of Textile Industry

The Textile sector is one of the oldest industries in the Indian economy. Indian Textiles & Apparel industry serves as second largest employment generating sector after the agriculture sector, providing direct employment to 45 million people and 100 million people in allied industries. India’s textile sector is also the fifth largest exporter in the world with a value of USD 37.11 Bn. It contributes 2.3% to the GDP of India, 13% to industrial production, and 12% to export earnings. India’s Textile & Apparel market was valued at USD 75 Bn in 2020-21 and is projected to grow at a CAGR of 10% to reach USD 190 Bn by 2025-26.

The government, of late, has come up with several policies which have given new energy to the sector. The sector attracted Foreign Direct Investment (FDI) worth USD 3.75 Bn from April 2000 to March 2021. The government has allowed 100% FDI in the sector under the automatic route. Major initiatives are taken to boost the Technical Textiles and Manmade fibers industry. Due to the pandemic, the demand for technical Textiles in the form of PPE suits and equipment has seen a manifold rise. Not to forget India has also become the second-largest manufacturer of PPE in the world which defines the capacity and potential of the country. Ministry of Textiles has given its approval for the continuation of the Comprehensive Handicrafts Cluster Development Scheme with a total outlay of Rs 160 crore. The Weaver MUDRA Scheme was launched to assist handloom weavers/weaver entrepreneurs by providing margin money assistance at 20% of the loan amount, up to a maximum of Rs. 10,000 (US$ 134.22) per weaver. The loan has a 6-percentage-point interest rate and a three-year credit guarantee.

Seeing the growth opportunity, a Production-Linked Incentive (PLI) scheme for the Textiles sector worth Rs 10,683 crore which aims to attract fresh investment of Rs 19,000 crore in the sector for the production of in-demand Textiles, and additional turnover of Rs 3 lakh crore over five years has been launched making manufacturing sector globally competitive is an important step towards fulfilling the government's vision of ATMANIRBHAR BHARAT. PLI significantly focuses on production and employment generation, exports, Cotton-based Textile industry, Man-made fibers (MMFs), and Technical Textiles. Recently Cabinet allow to set up 7 Mega Textile parks and allotted 4445 Cr.

Major growth drivers include development in Craft Villages Handloom and Handicraft pockets of the country for integrated sustainable development of Handlooms, crafts, and tourism with the combined effort of both the State and the Central Governments. PM MITRA Scheme will offer an opportunity to create an integrated textiles value chain right from spinning, weaving, processing/dyeing, and printing to garment manufacturing at one location.