TEXTILES AND GARMENTS

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SUMMARY
  • The Textile industry in India is one of the largest in the world with a large raw material base and manufacturing strength across the value chain.
  • India is:
    • The largest producer of cotton in the world
    • The second largest exporter of cotton in the world
    • Leading consumer of cotton
    • The second largest producer of silk in the world
  •  India is a global leader in jute production, accounting for about 70% of estimated world production.1
  • The total number of looms installed in jute industry was 48,322, as on 01 January 2018. The installed spindles in jute mills other than 100 % export oriented units were 7,48,612. The maximum installed capacity in jute mills other than 100% export oriented is about 2.75 mn tonnes annually. 2
  • The Textile industry in India is one of the largest sources of employment generation in the country with more than 45 mn people employed directly in 2017-18.
  • The Textile industry in India is dominated by 70% of women workforce and balance male workforce.
  • The industry contributes to 7% of industrial output in value terms, 2% of India’s GDP and 15% of the country’s export earnings.3
REASONS TO INVEST
  • Investments opportunities in India in many areas are enormous. Regional Comprehensive Economic Partnership, or RCEP, is an ambitious free trade agreement (FTA) connecting countries for more business and tourism prospects. FTAs provide an entry to these manufacturing nations for the development and investment in the industry.4
  • The 7th Regional Comprehensive Economic Partnership (RCEP) Intersessional Ministerial Meeting took place in Siem Reap, Cambodia on 02 March 2019. The participating countries of the RCEP are the 10 ASEAN member states and those countries which have existing FTAs with ASEAN – Australia, China, India, Japan, Republic of Korea and New Zealand.5
  • The Indian market has favourable demographics, rising income levels and brand as well as quality oriented customers.
  • The following government policies are favourable which provide attractive incentives to the manufacturers: 
    • Amended Technology Upgradation Fund Scheme (ATUFS)
    • Scheme for Integrated Textile Parks (SITP)
    • Integrated Skill Development Scheme (ISDS)
    • Technology Mission on Technical Textiles (TMTT)
    • Swarnjayanti Gram Swarozgar Yojana (SGSY)
    • Integrated Processing Development Scheme (IPDS)
    • Merchandise Exports from India Scheme (MEIS)
    • Market Development Assistance (MDA)
    • Market Access Initiative (MAI) 6
  • An abundance of raw materials such as cotton, wool, silk, jute and manmade fibres.
  • There is a comparative advantage seen in terms of skilled manpower and production cost over the majority of textile producers globally.
  • India’s policies are focused and promising, which give a boost to the overall textile market.
  • India’s value chain starting from production of natural fibre to the production of yarn, fabric and apparel gives India an edge over other countries.
  • India also sees a tremendous amount of skills in the traditional skill sector like handloom and handicraft.
  • The Government of India announced a Special Package to create 10 mn job opportunities and boost textile exports by US$ 31 bn, attracting investments worth US$ 11.93 bn during 2018-2020.7
STATISTICS
  • The Textiles industry in India is estimated at around US$ 150 bn and is expected to reach US$ 250 bn during 2019.8
  • India has the largest acreage with 12.2 mn hectares under cotton cultivation, which is around 42% of the world area of 29.3 mn hectares.
  • India produced an estimated 6.5 mn tonnes during 2017-18.
  • India's overall textile exports have been US$ 31.65 bn in FY19 and are expected to increase to US$ 82.00 bn by 2021. 9
  • The production of raw cotton in India is estimated to have reached 36.1 mn bales in FY19.10
FDI POLICY
  • 100% FDI is allowed under the automatic route in the Textile Industry in India.
SECTOR POLICY

Provisions of Budget 2019-20

  • The allocation to the Ministry of Textiles for 2019-20 is US$ 830 mn approx.11
FINANCIAL SUPPORT

JUTE-SMART:

  • Jute-Smart is an e-Governance Initiative for Procurement.
  • The JUTE-SMART software has become operative since 01 November 2016. Indents for a total quantity of around 3.85 mn bales, worth US$ 1.32 bn, have already been placed through JUTE-SMART, from the month of November 2016 to March 2018.12 

UPGRADATION FUND SCHEME:

  • There is a provision of one-time capital subsidy for eligible benchmarked machinery for the following:
    • For garments and technical textiles segments, at the rate of 15%, with a cap of US$ 4.6 mn
    • For weaving, processing, jute, silk and handloom segments, at the rate of 10%, with a cap of US$ 3 mn
  • An outlay of US$ 2.7 bn has been approved for seven years to meet the committed liabilities of US$ 1.9 bn and US$ 800 mn for new cases under ATUFS.

INTEGRATED SKILL DEVELOPMENT SCHEME:

  • The Ministry of Textiles is implementing the Integrated Processing Development Scheme (IPDS) to enable the textile processing sector in meeting environmental standards. This will be achieved through appropriate technology including marine, riverine and Zero Liquid Discharge (ZLD).
  • The Government of India provides financial assistance up to 50% of project cost for Common Effluent Treatment Plants (CETPs) subject to a ceiling of US$ 11.5 mn. The ministry has approved 4 projects in Rajasthan and 2 projects in Tamil Nadu.

INTEGRATED SCHEME FOR DEVELOPMENT OF SILK INDUSTRY:

  • Integrated Scheme for Development of Silk Industry is implemented with an outlay of US$ 300 mn from 2017-18 to 2019-20. The Scheme has 4 components:
    • Research & Development (R&D), training, transfer of technology and IT initiatives
    • Seed organizations and farmers’ extension centres
    • Coordination and market development for seed, yarn and silk products
    • Quality Certification System (QCS) by creating amongst others a chain of silk testing facilities.13

INFRASTRUCTURE DEVELOPMENT SCHEMES

  • Scheme for Integrated Textile Park (SITP) 
  • Integrated Processing Development Scheme
  • Mega Textile Clusters Scheme
INVESTMENT OPPORTUNITIES
  • The Textile industry in India has a robust presence in the entire value chain.
  • All levels of textile value chain i.e. from fibre/ filament to garment/speciality fabrics manufacturing at large scale are available.
  • India has an extensive custom of textile and apparel manufacturing with infrastructure spread across the country in numerous clusters.
  • Fabric processing set-ups are for all kind of natural, synthetic and speciality textiles.
  • Opportunities for investments in retail brands are immense.
FOREIGN INVESTORS
  • Rieter (Switzerland)
  • TrUtzschler (Germany)
  • Soktas (Turkey)
  • Zambiati (Italy)
  • Bilsar (Turkey)
  • Monti (Italy)
  • CMT (Mauritius)
  • E-land (S. Korea)
  • Nissinbo (Japan)
  • Marubeni (Japan)
  • Skaps (USA)
  • Ahlstorm (USA)
  • Terram (UK)
  • Strata Geosystems (USA)
  • Marks & Spencer (UK)
  • Zara (Spain)
  • Mango (Spain)
  • Promod (France)
  • Benetton (Italy)
  • Espirit (USA)
  • Levi’s (USA)
  • Forever 21 (USA)
KEY ACHIEVEMENTS
  • India reported a growth of 5.37% with exports increasing from US$ 35.52 bn in Jan-Dec 2016 to US$ 37.43 bn in Jan-Dec 2017.14
  • The Textiles industry in India (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 3.12 bn from April 2000 to March 2019. 15
  • Apparel and garment manufacturing centres have been set up in the north-eastern region.
  • Integrated Textile Office Complex set up at the Indian Institute of Handloom Technology (IIHT) in Varanasi
  • India Handloom brand has been launched by the Hon’ble Prime Minister of India on the occasion of the first National Handloom Day on 07 August 2015.16
  • Special Textile Package of US$ 850 mn is approved, to attract investment of US$ 11 bn and to create 10 mn jobs
  • Overall 11,14,545 persons were trained under the Skill Development, mainly in apparel and garment (86%), of which 8,43,082 persons (75.64%) were given employment in the textile sector.17
SOURCES
  1. Ministry of Textiles, Brief / Background note on Jute Sector, http://texmin.nic.in/sites/default/files/Textiles_Sector_Jute.pdf accessed on 10 May 2019
  2. Ministry of Textiles, Brief / Background note on Jute Sector, http://texmin.nic.in/sites/default/files/Textiles_Sector_Jute.pdf accessed on 10 May 2019
  3. Press Information Bureau, Ministry of Textiles, Year End Review-2018: Ministry of Textiles, http://pib.nic.in/newsite/PrintRelease.aspx?relid=186673 accessed on 10 May 2019
  4. Federation of Indian Chambers of Commerce and Industry (FICCI), Global shifts in the Textile industry and India’s position, http://ficci.in/spdocument/20817/3-FICCI-TAG-2016-Whitepaper.pdf accessed on 10 May 2019
  5. Press Information Bureau, Ministry of Textiles, The 7th Regional Comprehensive Economic Partnership (RCEP) Intersessional Ministerial Meeting Concludes in Cambodia, http://pib.nic.in/newsite/PrintRelease.aspx?relid=189151 accessed on 10 May 2019
  6. Federation of Indian Chambers of Commerce and Industry (FICCI), Global shifts in the Textile industry and India’s position, http://ficci.in/spdocument/20817/3-FICCI-TAG-2016-Whitepaper.pdf accessed on 10 May 2019
  7. Press Information of Bureau, Ministry of Textiles, Year End Review-2018: Ministry of Textiles, http://pib.nic.in/newsite/PrintRelease.aspx?relid=186673 accessed on 10 May 2019
  8. EY external source, Industry report of Emerging Markets Information Service (EMIS), Indian Textile Industry – Update, accessed on 10 May 2019
  9. EY external source, Industry report of Emerging Markets Information Service (EMIS), Indian Textile Industry – Update, accessed on 10 May 2019
  10. EY external source, Industry report of Emerging Markets Information Service (EMIS), Indian Textile Industry – Update, accessed on 10 May 2019
  11. Economic Times, Budget 2019: Textiles Ministry FY'20 allocation pruned to Rs 5,831.48 crore, https://economictimes.indiatimes.com/industry/cons-products/garments-/-textiles/budget-2019-textiles-ministry-fy20-allocation-pruned-to-rs-5831-48-crore/articleshow/67816222.cms accessed on 10 May 2019
  12. Ministry of Textiles, Brief / Background note on Jute Sector, http://texmin.nic.in/sites/default/files/Textiles_Sector_Jute.pdf accessed on 10 May 2019
  13. Press Information Bureau, Ministry of Textiles, Year End Review-2018: Ministry of Textiles, http://pib.nic.in/PressReleseDetail.aspx?PRID=1556841 accessed on 10 May 2019
  14. The Cotton Textiles Export Promotion Council, Overview of Current Trade in Textiles & Clothing, https://texprocil.org/ppt/COA_PPT_on_Trends_in_Textile_Trade_11-05-2018.pdf accessed on 10 May 2019
  15. Department for Promotion of Industry and Internal Trade, Fact Sheet on Foreign Direct Investment, https://dipp.gov.in/sites/default/files/FDI_Factsheet_27May2019.pdf accessed on 10 May 2019
  16. India Handloom Brand – Ministry of Textiles, Background, https://www.indiahandloombrand.gov.in/pages/background accessed on 10 May 2019
  17. Press Information Bureau, Ministry of Textiles, Year End Review-2018: Ministry of Textiles, http://pib.nic.in/PressReleseDetail.aspx?PRID=1556841 accessed on 10 May 2019
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