What’s in Today’s Article?

• Textile Sector (Introduction, Significance, Key Segments, Govt. Initiatives, etc.)
• News Summary

Textile Sector in India:

• The textile sector is one of the oldest and most significant industries in India, playing a pivotal role in the country's economic landscape.
• The industry encompasses a wide range of activities, including fiber production, spinning, weaving, knitting, dyeing, and apparel manufacturing, making it a key driver of economic growth and rural development.

Significance of the Textile Sector in India:

• Economic Contribution: The textile sector contributes about 2.3% to India’s GDP and 7% to the country’s industrial output.
• Employment: It is the second-largest employer after agriculture, providing direct employment to over 45 million people and indirectly supporting 100 million people in allied sectors.
• Exports: The sector accounts for approximately 12% of India’s total export earnings. In FY 2023, India’s textile and apparel exports stood at around $44.4 billion, making it one of the largest exporters of textiles globally.
• Diverse Segments: The industry includes handloom, power loom, and mill sectors, with India being a global leader in the production of cotton, jute, and silk.

Key Segments of the Textile Industry:

• Cotton Textiles: India is the largest producer of cotton globally, with over 30% of the world's cotton production. The cotton segment plays a crucial role, with a strong domestic supply chain supporting both domestic and export markets.
• Handloom and Handicrafts: India’s handloom sector is renowned worldwide for its traditional designs and quality. With more than 4.3 million weavers, this segment preserves India’s rich cultural heritage and contributes significantly to rural employment.
• Technical Textiles: This is a rapidly growing segment that focuses on textiles with functional applications, such as in healthcare, automotive, and agriculture. The market for technical textiles in India is projected to grow at a CAGR of 20%, reaching $23 billion by 2025.
• Man-Made Fibres (MMF): The MMF segment has been gaining traction, contributing 30% to India’s textile market. It includes synthetic fibres like polyester, which are widely used in various industries due to their durability and versatility.

Current Challenges Facing the Textile Sector:

• Raw Material Fluctuations: The industry faces challenges due to fluctuations in raw material prices, especially cotton, impacting production costs and profitability.
• Technological Upgradation: Outdated technology in many units hampers productivity and quality. There is a need for significant investment in modern machinery and digital tools to compete globally.
• Environmental Concerns: The textile industry is resource-intensive, consuming large amounts of water and energy. Environmental sustainability has become a critical issue, necessitating the adoption of eco-friendly practices.
• Competition from Other Countries: India faces stiff competition from countries like Bangladesh, Vietnam, and China, which offer lower production costs and faster turnaround times, particularly in the apparel segment.
• 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.

Government Initiatives to Boost the Textile Sector:

• Production Linked Incentive (PLI) Scheme: The government introduced a ₹10,683 crore PLI scheme specifically for the textile sector to promote the production of man-made fibres and technical textiles. This is expected to attract investments worth ₹19,000 crore and create 7.5 lakh jobs.
• National Technical Textiles Mission: Launched with an outlay of ₹1,480 crore, this mission aims to position India as a global leader in technical textiles by enhancing domestic production and research.
• Amended Technology Upgradation Fund Scheme (ATUFS): This scheme provides financial assistance for upgrading machinery, aiming to modernize the textile industry and enhance productivity.
• Skill Development Programs: Initiatives like the Samarth (Scheme for Capacity Building in Textile Sector) focus on skill development, training over 10 lakh youth in various textile-related trades to meet the industry’s demand for skilled labor.
• Mega Integrated Textile Region and Apparel (MITRA) Parks: The government plans to set up 7 MITRA parks with state-of-the-art infrastructure, common facilities, and plug-and-play ecosystems to attract investments and enhance the competitiveness of Indian textiles.

News Summary:

• About 12 textile companies are set to receive the first set of incentive payment under the production-linked incentive (PLI) scheme.
• This follows signs of export recovery in the month of August, after delays due to weak demand in Western markets.
• The PLI scheme, launched in 2021 with a budget of ₹10,683 crore, aims to boost production of man-made fibres (MMF), apparel, MMF fabrics, and technical textiles.
  • The scheme will enhance manufacturing and investments, leveraging India’s complete value chain.
• The Ministry of Textiles has outlined a roadmap to create 4.5 to 6 crore jobs in the textile sector by 2030 and expand the market size to $350 billion from the current $165 billion.
• Despite these efforts, India’s textile exports declined for the second consecutive year in 2023-24.
• The World Bank reported that India’s share in global exports of labour-intensive sectors like apparel and textiles has stagnated, while countries like Bangladesh and Vietnam have gained market share, aided by free trade agreements and duty concessions.
• The Bank suggested that India could benefit from diversifying exports, leveraging geopolitical shifts, and reducing trade barriers to boost the textile sector's growth.