Suketu Shah: India is well-positioned to capitalise on the growing sustainable fashion trend

Vishal Fabrics (VFL) is a denim manufacturing and fabric processing unit that was incorporated in 1985. VFL stands for a denim revolution that brings equality back to fashion, and change the market trend, forever. Vishal Fabrics is a reputed entity that is known for dyeing, printing and processing of denim, and other wide range of fabrics. Suketu Shah, CEO, Vishal Fabrics, in this interview with Divya Shetty, shares the opportunity he foresees for the Indian textile industry.

What according to you is the present state of the Indian textile industry?

India is the sixth-largest exporter of textiles globally, contributing a substantial 8.21 per cent to the nation’s total exports in 2023-24. With a 4.5 per cent share of global trade, the sector sees strong demand from key markets, with the United States and the European Union collectively accounting for 47 per cent of India’s textile and apparel exports.

On the employment front, the textile industry is a powerhouse, directly employing over 45 million people and indirectly supporting more than 100 million livelihoods. It plays a pivotal role in inclusive economic development, particularly by empowering women and rural workers. The sector aligns seamlessly with Make in India, Skill India, Women Empowerment, and Rural Youth Employment, emphasising its contribution to national progress.

A significant milestone in the industry is the launch of Kasturi Cotton, an initiative by the Ministry of Textiles focused on branding, traceability, and certification. This collaborative effort, involving stakeholders across the supply chain, aims to enhance the value and global recognition of Indian cotton, ensuring its sustained prominence in domestic and international markets.

The Indian textile sector has set an ambitious target of achieving $350 billion in market size by 2030. In your opinion, what are the significant challenges or barriers that could hinder this progress?  

India’s textile industry faces several key challenges that could hamper its ambitious goal of reaching a $350 billion market size by 2030. One major obstacle is inadequate infrastructure and logistics, which create significant supply chain bottlenecks and delays. Additionally, limited investment in research and development restricts innovation and the adoption of new technologies. While India has an abundant workforce, a lack of adequate training results in lower productivity compared to global competitors. Fluctuating raw material prices and high import duties further impact cost efficiency, while currency volatility and high interest rates add to the financial burden, making exports less competitive.

To address these challenges, the Production-Linked Incentive (PLI) scheme focuses on boosting man-made fibre apparel, fabrics, and technical textiles. Offering subsidies of 4 per cent to 6 per cent on incremental sales, the scheme aims to disburse Rs 2 trillion over five years.

However, global competitiveness remains a concern. India faces strong competition from Bangladesh, Vietnam, and China, which benefit from higher labour productivity and lower costs. From 2014 to 2020, India’s global textile market share declined, particularly in man-made fibre apparel, where Bangladesh and Vietnam continue to outperform.

What opportunities do you foresee for the Indian textile industry as we move into 2025?  

As we move into 2025, the Indian textile industry is well-positioned for growth, driven by strong financial performance and evolving market dynamics. Companies in the sector have reported a healthy year-over-year increase in revenue (11 per cent), EBITDA (11 per cent), and PAT (28 per cent), fuelled by higher volumes and stable realisations. While domestic cotton prices remain higher than international rates, improving demand is expected to support profit margins and operational efficiency in the coming quarters.

Garment demand continues to rise, with retailer inventories stabilising. Sales volumes grew 19 per cent year-over-year (Y-o-Y) and 10 per cent quarter-over-quarter (Q-o-Q) in 3QFY25, while the home textiles (HT) segment saw a 37 per cent Y-o-Y increase, despite a 9 per cent Q-o-Q decline.

International cotton prices have gradually decreased and are currently around $0.67 to $0.68 per pound, down from $0.70 per pound in 2QFY25. Meanwhile, Indian cotton prices have risen slightly to Rs 54,000-55,000 per candy ($0.80 per pound), from Rs 52,000-53,000 in Q2. Indian cotton prices continue to trade at a premium to international prices. With a reasonably expected cotton crop, we anticipate that prices will remain at the lower end of this range, providing predictable input costs in the future.

India’s textile sector remains resilient, benefiting from favourable global trade dynamics, government policies, and rising global demand. Additionally, the industry is well-positioned to capitalise on the growing sustainable fashion trend, leveraging its rich heritage in weaving and craftsmanship to adapt quickly and capture emerging market opportunities.

How crucial is sustainability in positioning India as a global leader in the textile industry? Additionally, could you share how your company is integrating sustainable practices into its operations and supply chain?  

India’s textile industry, driven by initiatives like ‘Make in India,’ has seen rapid expansion. However, this growth has raised concerns about environmental impact, prompting the government to promote sustainable manufacturing. Policies now focus on balancing production demands with eco-friendly practices, while initiatives like Mega Investment Textiles Parks (MITRA) aim to make sustainable production more affordable and accessible.

Manufacturers are adopting recycling, water conservation, and eco-friendly textiles to reduce waste and resource consumption. The industry is also exploring regenerative organic farming, plastic recycling, and circular fashion, where textile waste is repurposed into new garments. Many companies are fostering a culture of upcycling, transforming pre- and post-consumer waste into unique products, strengthening India’s role in the global circular economy.

The textile industry’s high energy consumption and reliance on fossil fuels are major concerns, prompting many factories to adopt solar energy solutions. Rooftop solar panel installations are reducing fossil fuel usage and enhancing energy efficiency. At Vishal Fabrics, we actively promote solar energy utilisation to meet our in-house power requirements. Another critical issue is wastewater generation, which manufacturers are tackling through innovative water management systems. Many companies are reusing wastewater and implementing recycling systems to minimise their overall water footprint. Our state-of-the-art facility in Dholli also operates a zero-discharge system, supported by an advanced counterflow water management strategy. Through this system we are utilising 95 per cent of our water and significantly reducing dependence on freshwater resources.

How important is technological modernisation in enhancing our global competitiveness, and what more can be done to accelerate the adoption of cutting-edge technologies in this sector?  

The Indian textile industry is undergoing a technological revolution, with advancements in automation, agile production techniques, and smart manufacturing enhancing its global competitiveness. Cutting-edge technologies such as 3D printing are revolutionising yarn processing and textile design, enabling greater flexibility and customisation. Digital printing is also gaining traction, offering higher precision and efficiency in fabric production.

Innovations like pleating technology enhance fabric texture and volume, while nanotechnology improves fabric durability, water resistance, and energy efficiency. AI and machine learning are transforming textile design by analysing consumer trends and optimising production processes. Additionally, the industry is prioritising sustainability by adopting biodegradable fabrics and leveraging advances in material science to develop eco-friendly textiles, reducing environmental impact and reinforcing India’s leadership in responsible manufacturing.

What measures should the government take to further strengthen the Indian textile and apparel (T&A) segment?

To strengthen India’s textile and apparel (T&A) sector, the government must address key challenges, including high raw material costs, import restrictions, and policy support for modernisation.

India’s Quantitative Import Control Order (QCO) on man-made fibre (MMF) and yarn limits raw material availability, unlike competitors such as Bangladesh and Vietnam, who enjoy unrestricted access. Removing import duties on specialised cotton varieties such as contamination-free, organic, and sustainable cotton, would help ease supply shortages. Since the import tax on cotton has disrupted the domestic value chain, the government could consider a Direct Benefit Transfer (DBT) model for MSP procurement or introduce a Cotton Price Stabilisation Fund Scheme to manage price fluctuations.

Further, policy initiatives like extending the Interest Equalisation Scheme (IES) for textiles for three years, revamping the Technology Upgradation Fund Scheme (TUFS), and launching a Production-Linked Incentive (PLI) scheme with lower investment thresholds can encourage industry growth. Additionally, establishing a National Textile Fund, promoting indigenous textile machinery manufacturing, offering duty-free import benefits for exporters, and deferring Section 43B(h) of the Income Tax Act would create a more competitive and resilient textile ecosystem.

Which emerging areas within the textile industry hold the most potential for growth?  

The Indian textile industry is poised for significant growth, driven by rising consumerism, disposable income, and international brand expansion. Global names like Marks & Spencer, Guess, and Next have already entered the Indian market, reflecting the sector’s strong potential. Growth is further fuelled by increasing household incomes, population expansion, and rising demand in sectors such as housing, hospitality, and healthcare. The Indian textile market is projected to surpass US$ 209 billion by 2029. A key emerging trend is the integration of digital technologies, allowing brands to offer custom designs and tailored fits to meet evolving consumer preferences. Additionally, as sustainability gains traction, demand for organic fibres, recycled materials, and eco-friendly dyes is rising, creating a lucrative market for Indian manufacturers committed to green innovation.