Indian Textile Industry Poised To Cross $500 Billion By 2025
If the Indian textile industry takes the right steps and gets adequate policy support from the government, it could add another $400 billion by 2025 to its present size of $108 billion. This will also catalyse another 35 million jobs and $200 billion of investments, notes an international study by Wazir Advisors and PCI Xylenes & Polyesters.
With 5.2% share of global trade, the Indian textile industry ranks second in the world, but far behind China. This is likely to change, with China’s share in global textile trade expected to go down by 5% which will help India to push up its exports to $185 billion, even as the domestic apparel market is likely to grow by 4.5 times.
The industry understands the opportunity ahead it requires a detailed understanding of the investment potential, competition analysis and possible partnerships with global leaders. Against this background, Wazir Advisors and PCI Xylenes & Polyesters, two leading textile and polyester sector consulting firms, just concluded a syndicated study on the investment opportunities in the polyester based textile value chain of India.
They carried out primary research in China, South Korea, Taiwan and South East Asia to assess and contrast their respective evolutions to understand what India needs to consider in order to establish an optimum, polyester-based textile industry.
Major outcome of their research work will be shared at an exclusive, invitation-only seminar, to be attended by a select group of industry leaders in major textile centres Mumbai, Delhi, Surat, Ludhiana and Coimbatore.
Indian textile industry needs to have a major shift in its fibre mix which is presently tilted towards cotton (55%), while the fibre consumption of the world is tilted towards polyester fibre (50%). At 6 digits HS code level, India’s presence is insignificant in global trade of 864 manmade fibre-based textile and apparel commodities – while the collective trade in these commodities stood at $208 billion in 2012, India’s share was just 0.19% or $385 million.
India’s domestic market is also consuming more manmade fibre-based products as cotton prices are fluctuating unpredictably, global brands are setting up more shops, women’s wear increasing market share and private labels are gaining prominence in organised retail. India may start consuming more polyester than cotton in next five years, which will increase the market size of polyester fibre by 1,500 thousand tonnes.
The report recommends the Government to give more support to Indian textile industry with specific focus on manmade fibre based textile value chain. Immediate GST implementation to remove the differential tax treatment to manmade fibers, creation of mega Textile Park, single window system for FDI specific to textiles, labor law reforms, extension of loan period in case of TUFS and research & development promotion are some of the policy measures suggested in the report. Implementation of these suggestions will help attracting investment, technology up-gradation, innovation and healthy growth of the industry.
In the second phase of their initiative, Wazir & PCI have decided to set up Polyester Textile Investment Promotion Cell (PTIPC) which will support Indian and overseas manufactures to know more about the sector, identify investment opportunities in India, form JVs and make investment in manmade fibre-based textile value chain of India. Indian textile industry has missed the bus when quota was completely removed on January 1, 2005. It will be interesting to observe whether it can catch it this time.