Importance of Textiles & Clothing Industry in Indian Economy

Simi Balakrishnan

CUTS International

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An Overview

       Indian textiles and clothing (T&C) industry is extremely varied Industry contributes about…    14% to industrial production 4% to GDP 17 % to country's export earnings Largest provider of employment after agriculture Direct employment to over 35 mn people 50 mn engaged in allied activities Self reliant in the entire value chain – fibre to fashion Supports agriculture in over 9.5 million hectares of land where cotton is cultivated.

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India has..

 Highest number of looms (1.8 mn shuttle looms; 200,000 shuttle-less looms; 3.9 mn handlooms)  2 nd largest number of spindles in world (40 mn spindles)  1 st in Jute production (1,900 mn kg)  2 nd in silk production (15 mn kg raw silk)  2 nd in cotton production (2,700 mn kg cotton fibre)  2 nd in cotton exports (2,000 mn kg)  5 th in man-made fibers production (2,000 mn kg)  8 th in production of wool (51 mn kg) 3

India’s T&C Industry…

      Generated US$ 55 bn in 2008-09 (Domestic market- 33.4 bn; exports- 21.6 bn) Envisages to reach US$ 100 bn by 2015 (Domestic market- 57 bn; exports- 43 bn Contributed 12.5% to India’s total export in 2009-10 Holds 4% of global T&C exports Largest foreign exchange earning sector Registered strong growth in post quota period –  US$ 14.03 bn in 2004-05 to US$ 22.15 bn in 2007-08   but declined in 2008-09 to US$ 20.94 bn and increased in 2009-10 to US$ 22.42 bn 4

Segment-wise Exports 2007-2010 (US$ mn) .

Source: Ministry of Textiles, Annual Report 2010-11 Category 2007-08

Cotton Textiles 6858.63

Manmade Textiles Silk Wool

Ready Made Garments

Handicrafts Jute Coir & Coir Prod.

Total

3177.11

657.72

443.11

9069.80

1452.28

327.86

160.25

22146.78

2008-09

4803.52 3325.88

684.93

484.75

10383.26

1090.77

303.21

150.02

21226.34

2009-10

5711.41

3970.88

596.05

470.20

10064.73

961.67

218.40

160.60

22418.79

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T&C Exports from India - Top ten countries Country

USA UAE UK Germany France Italy China Spain Bangladesh Netherlands

% Share [2008-09]

20.38

8.27

7.53

6.11

3.80

3.76

2.54

2.76

2.45

2.44

6

Country

China

India

Turkey Pakistan

EU-27 Textile Imports Growth %

-12.9

Share % 2009

29.2

-15.6

-15.3

-9.7

10.6

16.7

7.8

Share % 2008

29.8

11.2

17.5

7.7

Source: Federation of Indian Chambers of Commerce and Industry 7

Domestic Demand Drivers

 More than 60% of T&C production for domestic market  Buoyant domestic economy  Helpful demographic profile and increase in working female population 

Organized retailing a driver for increased consumption .

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International Demand Drivers

 Dismantling of quotas  Increase in sourcing of textiles by developed markets from developing countries.

 Apparel spending remains significant in life style products category in developed world.

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Projected Market for Indian T&C – 2015

.

Source: Confederation of Indian Textile Industry Total T&C market US$ 100 bn Exports Market US$ 43 bn (43%) Domestic Market US$ 57 bn (57%) Textile Export US$ 22 bn Apparel Exports US$ 21 bn Domestic Textile Market US$ 28 bn Domestic Apparel Market US$ 29 bn

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Promotion of Textiles Sector in India

    Sector is modernizing rapidly Various schemes and programmes introduced Increased Investment and Plan Allocation Investment increased - Rs. 1,08,531 cr (2004-08) 11

Thank You!

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