$350 billion: A tall order for Indian textile makers

$350 billion: A tall order for Indian textile makers

As per the FICCI-Wazir Advisors report, released recently, the Indian textiles and apparel (T&A) industry may touch $ 350 billion mark by 2030 on the back of long-term positive outlook for the Indian economy and a strong focus on emerging areas like technical textiles, home furnishing, specialised fabrics and fashion apparels. The report anticipates the global T&A market to reach $ 2.37 trillion by 2030 from around $ 1.7 trillion in 2022 with a CAGR of around 8 per cent, while global T&A trade is expected to grow at a CAGR of 4 per cent to reach $ 1.2 trillion by 2030 (from $ 910 billion in 2021).

For India to become a $ 350 billion T&A market, key enablers, according to the report, will be export competitiveness, attaining manufacturing excellence, strengthening the textile value chain, embracing sustainable practices and circular economy, and leveraging government schemes. The industry will also have to focus on automation and digitalisation to improve processes and efficiency levels; start tapping new markets; develop capabilities in synthetic textiles and technical textiles and adopt global best practices for manufacturing excellence.

In 2022, Indian textile and apparel market was estimated at $ 165 billion, with exports contributing $ 40 billion. Hence, to reach $350 billion by 2030, the Indian T&A market will have to grow at a 10 per cent CAGR. But, given the prevailing market condition it can be a tall order.

In the recent months, apparel and textile production has witnessed steep decline following drop in export orders. According to the reports, India’s garment manufacturing declined by more than one-fifth (22.6 per cent) between April and August 2023 compared with the same period in 2022. Exports of textile and garments in September showed a contrasting performance. While textile exports grew 11.06 per cent in September 2023 over the previous year, apparel exports declined by 11.23 per cent in the same month.

While there are many reasons for the fall in manufacturing and exports (including the ongoing Russia-Ukraine War and, now, Israel-Hamas conflict), the recently introduced Quality Control Order (QCO) – mandating a Bureau of Indian Standards (BIS) certification for man-made fibre, including those that are imported – is also responsible for this decline as textile manufacturers were unable to source these raw materials as per the government’s specifications in the international markets.

Impact of the decline is already visible with garment makers reducing workers’ shifts, or, in some cases opting for a temporary stoppage of work (like the planned shutdown of 20 days by Bhiwandi powerloom weavers in Maharashtra in November 2023).

Industry experts observe that the August-October 2023 sales in the domestic market will be higher than the earlier months of FY24 (due to the festival season), but compared to the last year, the growth will be still flat. Some are optimistic that the wedding season after Deepavali might witness an uptick in sales.

We wish all our readers a Happy and Vibrant Diwali!

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