The textile sector in India has long been a cornerstone of the nation’s economic and cultural identity. This sector, with roots stretching back centuries, encompasses a wide array of production methods, from hand-woven traditions to state-of-the-art industrial manufacturing.
As of today, India’s textile industry contributes significantly to the nation’s GDP, industrial output, and employment generation. Despite recent challenges, the sector has ambitious goals, aiming for a $350 billion annual business and creating 3.5 crore jobs by 2030. This article examines the current status of the textile sector, its associated challenges, government initiatives to promote it, and the proposed future course of action.
What is the present status of the Textile Sector in India?
India’s textile sector plays a pivotal role in the national economy:
| Economic Contribution | The sector contributes 2.3% to India’s GDP, 13% to industrial production, and 12% to export earnings. |
| Employment | As one of the largest employers, it directly supports 45 million workers and indirectly provides livelihoods to around 100 million people. |
| Global Standing | India is the second-largest producer of textiles and garments globally, with a 4% share in the global textile trade. It is also the sixth-largest exporter of textiles and apparel. |
| Production and Export Targets | India aims to achieve $250 billion in textile production and $100 billion in exports by 2030. |
| Regional Clusters | Key manufacturing hubs include Gujarat, Maharashtra, Tamil Nadu, Uttar Pradesh, and West Bengal, specializing in various segments like cotton textiles, silk, and handlooms. |
What are the key Segments of the Textile Industry?
| Cotton | a. Commercial Importance: India is one of the largest cotton producer, growing all four species of cotton. (G. Arboreum & G. Herbaceum (Asian cotton), G. Barbadense (Egyptian cotton) and G. Hirsutum (American Upland cotton) b. Economic Role: Cotton sustains over 6 million farmers and supports 40-50 million people in allied industries. Known as “White Gold,” it significantly contributes to foreign exchange earnings. c. Production Status: India leads in acreage and ranks second in production and consumption. |
| Technical Textiles | a. Definition: These textiles are designed for functional applications rather than aesthetics, finding uses in industries like healthcare, agriculture, and construction. b. Materials: Technical textile products are manufactured using natural as well as manmade fibres such as Nomex, Kevlar, Spandex, Twaron, etc. c. Production Status: India is the fifth-largest producer of technical textiles, with a market size of $22 billion. Exports grew to $2.85 billion in 2021-22. |
| Silk | a. Production: India is the second-largest silk producer and the largest exporter of handwoven silk fabrics. b. Specialization: It is the only country producing all four types of silk: Mulberry, Tussar, Muga, and Eri. |
| Jute | a. Environmental Significance: Known as the “golden fiber,” jute is eco-friendly and renewable. b. Production: India accounts for 75% of global jute production, with West Bengal being a major hub. |
What are the Government Initiatives to boost the Textile Sector?
1. PM MITRA Parks Scheme– It aims to develop world-class textile infrastructure through Public-Private Partnerships (PPP) with the Budget allocation of ₹4445 crore for a period up to 2027-28.
2. Production Linked Incentive (PLI) Scheme– It focuses on boosting production of MMF (man-made fibers) and technical textiles. It offers financial incentives for meeting investment and turnover thresholds.
3. Amended Technology Upgradation Fund Scheme (ATUFS)– It Provides capital investment subsidies to modernize textile infrastructure.
4. National Technical Textile Mission (NTTM)– It Promotes research, market development, export promotion, and skill development in technical textiles.
5. Samarth (Scheme for Capacity Building in Textile Sector)– It aims to provide skill training aligned with industry needs.
6. Foreign Direct Investment (FDI): 100% FDI (automatic route) is allowed in textile and apparel sector in India.
7. Branding Initiatives– “Kasturi Cotton India” launched to promote premium Indian cotton globally.
What challenges is the Textile Sector facing?
1. Fragmented Value Chain– The sector is highly fragmented, dominated by MSMEs, leading to inefficiencies and lack of scale.
2. Raw Material Issues– Despite being the largest cotton producer, India faces challenges with contamination and low fiber quality.
3. Technological Gaps– Outdated technology in weaving and processing sectors leads to higher production costs.
4. Global Competition– Competitors like Bangladesh, Vietnam, and China have advantages in lower labor costs and better trade agreements.
5. Environmental Concerns– Textile production processes have significant ecological and social impacts, including water pollution and labor issues.
6. Regulatory Hurdles: Compliance with various regulatory norms and access to government schemes can be complex, often leading to delays and increased costs for textile manufacturers.
What are the recommendations to unlock the sector’s Potential?
1. Technology Upgradation– Invest in R&D and adopt low-cost automation solutions to improve productivity.
2. Focus on Weaving and Processing– Provide higher capital subsidies under Amended Technology Upgradation Fund Scheme (ATUFS) to these segments.
3. Sustainability Practices– India should focus on revamping processes including circular designs, use of blended fibres, zero liquid discharge, chemical management, and revamping policies including safety at workplace.
4. Infrastructure Development– Develop plug-and-play industrial parks through state government support.
5. Export Diversification– Expand the export basket and explore new markets such as Africa, Japan, and Australia.
6. Strengthen Technical Textiles– Build international collaborations for technology transfer and innovation.
Conclusion
The Indian textile sector holds immense potential to transform into a global leader, provided it overcomes its current challenges through strategic initiatives and innovative practices. By focusing on technological advancements, sustainability, and global competitiveness, India can not only achieve its ambitious targets but also create significant economic and social value. As the sector progresses towards modernization and globalization, it remains a vital pillar of India’s growth story, echoing its rich heritage while shaping a promising future.
| Read more- ET UPSC Syllabus- GS 3- Indian Economy |
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