Why Should You Invest in Textile Sector in India?
The textile industry is largely concerned with yarn,
The textile industry is largely concerned with yarn, cloth, and apparel design, production, and distribution. The raw material can be natural or synthetic, utilizing chemical industry products. The textile industry in India is one of the country's oldest industries. The textile and clothing industry in India contribute 2.3 percent to the country's GDP, 13% to industrial production, and 12% to export revenues. The textile sector is dominated by the decentralized power looms/hosiery and knitting sector. India's textile sector has the capacity to create a wide range of products appropriate for a variety of market segments, both domestically and internationally.
Invest in Textile Sectors in India
Indian Textile Industry - Overview
In the last five years, the textiles industry has seen a surge in investment. From April 2000 to March 2021, the sector (including dyed and printed) attracted US$ 3.75 billion in foreign direct investment (FDI). India is the world's second-largest producer of textiles and garments, as well as the fifth-largest exporter of textiles spanning apparel, home, and technical products. India's textile industry accounts for 2.3 percent of GDP, 13 percent of industrial production, and 12 percent of exports. The industry employs more than 4.5 crore people directly and another 6 crores in affiliated industries, making it the country's second largest employer.
Why Should you Invest in the Indian Textile Industry?
The Indian government has enacted a number of textile export promotion measures. Under the automatic approach, it has also approved 100 percent FDI in the sector. India is working on a number of important efforts to help the country's technical textile industry grow. The need for technical textiles in the form of PPE suits and equipment is increasing as a result of the epidemic. The government is assisting the industry by providing financing and machinery sponsorship.
The textile and apparel market in India were valued at US$ 75 billion in 2020-21, and it is expected to increase at a CAGR of 10% from 2019-20 to US$ 190 billion by 2025-26. In India, apparel accounts for 73 percent of the textile and apparel market. Men's apparel continues to account for the majority of the industry (41%), followed by women's wear (38%), and children's clothes (21%). (the fastest growing segment in India). Long-term demand is likely to be boosted by the country's growing population, demographic advantage, and shift in consumer tastes toward branded products.
Production-Linked Incentives scheme
The government's Atmanirbhar Bharat vision is being realized through the Production-Linked Incentive (PLI) scheme, which was established in March 2020 to make the manufacturing sector globally competitive. Its goal is to eliminate sectoral barriers, establish economies of scale, and increase efficiency. A Rs 10,683 crore Manufacturing-Linked Incentive for the textiles sector intends to attract new investment of Rs 19,000 crore for the production of in-demand textiles, as well as an additional turnover of Rs 3 lakh crore over the next five years.
PLI has a strong emphasis on production and job creation, as well as exports, the cotton-based textile sector, man-made fibers (MMFs), and technical textiles. Skilled labor, large-scale employment, electricity affordability, land, common testing facilities, and locally available research and development that considers the entire value chain are all factors to consider. Unlike India's traditional textile sector, which is heavily reliant on exports, the technological textile industry is heavily reliant on imports. Many products, such as baby diapers, adult diapers, disposable polypropylene spun bond fabric, wipes, protective garments, hoses, and seat belt webbings, are heavily imported.
The Indian textile industry uses 45 percent MMF and 55 percent Cotton and other Fibers, but the foreign textile industry uses 70 percent MMF and 30% Cotton Fiber.
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