Indian textile industry must invest in technology, automation and innovation to gain an advantage over its competitors, says Ronak Chiripal.
India holds 4% share of the global textiles and apparel (T&A) trade. The Indian textile industry produces important goods for consumers across the world; right from producing fibers, to manufacturing of clothes. The global textile market is projected to grow at a compound annual growth rate (CAGR) of 8.3% from $530.97 billion in 2021 to $575.06 billion in 2022. At a CAGR of 7.2%, the market is projected to reach $760.21 billion by 2026. To gain more share in the global market, Indian textile industry and government must overcome a few obstacles.
In the wake of COVID 19 crisis and subsequent introduction of ‘China Plus One’ supply chain diversification strategy emerged as an opportunity for Indian players. It turned up to be a natural response to the shifts in perception of China’s trade friendliness. Essentially, China Plus One signifies the practice of brands transforming their sourcing strategy through expansion of producers, and supplier networks to include minimum of one partner from a country other than China. This allows them to counterbalance an overly weighted supply chain – and to do so carefully.
Soon before the world could recover from the Covid 19 Omicron crisis, the Russian-Ukrainian conflict appeared to have taken a dire turn, causing global markets to crash. The immediate impact of the conflict in Ukraine, included infrastructure disruption, rising trade costs, aggregate demand in the rest of the world contracted due to lower business/consumer confidence and rising uncertainty.
Additionally, the Russia-Ukraine war impacted fashion firms worldwide, including India. The ripples of the war have resulted into making the Indian as well as other markets more unstable. Therefore, while the firms and brands anticipated high volatility, it was imperative for the industry players to carefully plan for stocking raw materials and work out transportation and operational costs. The Russia-Ukrainian conflict called for the need to be alert and agile, thus making Indian industry wary of every development.
India being one of the top five largest exporters of textiles – including apparel, home and technical goods – in the global market, accounts for approximately 8% of the trillion dollar global B2B market. The numbers are sure to support the expansion of the country’s share in the global textile and clothing market. Focusing on the appropriate market segments will help the country to regain its market share, enabling India to become the second largest exporter after China over the next four to five years. Changing the composition of the fibers will make the country a leader in the global textile industry.
The Indian T&A industry is characterised by radical innovation, emerging markets, supply chains and evolving distribution channels and is gradually shifting towards responsible and sustainable production. In an era of economic competition, and as a the step towards increasing the market share, the Indian textile industry should invest more in upgrading, focusing on increasing the automation of manufacturing processes and promoting innovation, research and development, in order to gain an advantage over its competitors such as China, Bangladesh and Vietnam. The faster adoption of technology is the key for the Indian textile sector to accelerate the pace of production and become more competitive in the global market.
Future outlook
The Indian textile and clothing market is mainly driven by the easy availability of abundant raw materials such as cotton, silk, wool, etc. throughout India. The growing penetration of high-speed Internet is sure to become a catalyst for the rapid expansion of the Indian market. The industry is expected to be worth more than $ 209 billion by 2029. The Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) scheme in textiles products for enhancing India’s manufacturing capabilities and enhancing exports and that’s definitely going to give the boost to the entire industry and can pave the way for India to soon become a leader in the T&A market.
About the author:
Ronak Chiripal is the CEO of Nandan Terry Ltd – a part of the Chiripal Group. He is responsible for undertaking various functions including leading the development of the company’s short-term & long-term strategy, creating & implementing vision and mission, etc.