India's textile sector at inflection point to reclaim global market share: Report
New Delhi, June 9
India is poised to regain its lost prominence in the global textiles and apparel industry, supported by policy reforms, free trade agreements, a favourable tariff environment and strong domestic demand, according to a report by Emkay Research.
The report said the country's textile sector is at a critical turning point after its share in global apparel trade remained stagnant at 3-4 per cent over the last 15 years.
"India has, traditionally, been a textile powerhouse but lost market share in the global apparel trade, which has been stagnant at 3-4% over the past 15Y. However, we believe India is at an inflection point to regain its lost glory," the report stated.
According to the report, several structural drivers are expected to accelerate growth, including the strengthening of the domestic man-made fibre (MMF) ecosystem through Production Linked Incentive (PLI) schemes, PM MITRA parks and petrochemical capacity additions. The implementation of FTAs with key markets such as the European Union, the United Kingdom, Australia and other economies is also expected to improve India's competitiveness.
The report highlighted that India's textile exporters stand to benefit from a 7-8 per cent tariff advantage in the United States market compared with China, alongside favourable import duties, GST reforms and stronger corporate balance sheets.
It added that the country's rapidly expanding apparel market further strengthens the sector's growth outlook.Emkay Research noted that India's textile and apparel manufacturers have demonstrated resilience despite multiple global disruptions, including the Covid-19 pandemic, the Russia-Ukraine conflict and elevated US tariffs.
"Backed by a robust domestic market, favorable USD-INR rate, and strong balance sheet, we believe domestic players would be able to absorb future shocks too," the report added.
The report also pointed to significant opportunities arising from upcoming FTAs with the European Union and the United Kingdom. It said the removal of import duties on Indian textile products in these markets could help domestic exporters gain market share from competing nations such as Bangladesh and Vietnam.In addition, the report identified technical textiles as a major growth segment, citing increasing demand in packaging, defence, automotive and industrial applications.
"Technical textiles' domestic market size saw 7-8% CAGR over FY20-26P; we expect this to increase to early-double digits over the next 5Y," the report said, attributing the expected growth to FTAs, tariff advantages over China, government support through PLI schemes and PM MITRA parks, and lower GST rates on MMF fibres and yarns.
— ANI
Reader Comments
Hoping this is not just another 'report' that gathers dust on a shelf. The India textile story has so much potential - our cotton, our handloom heritage, and now the government is pushing MMF and technical textiles. But ground reality needs improvement. Exporters in Tirupur are still struggling with logistics and power costs. Let's see how FTAs with EU and UK actually translate on ground.
Interesting perspective from overseas. I work in textile sourcing for a US company, and we've been watching this shift for a while. The 7-8% tariff advantage over China is real, but it's more than just tariffs - quality consistency and delivery timelines matter. India has the raw material advantage but needs to work on reducing turnaround times. Glad to see the report acknowledges the domestic market strength as a cushion.
Technical textiles! That's where the real future is - defence, automotive, industrial applications. My cousin runs a small unit making geotextiles and he's getting orders from road projects. The PLI scheme for MMF is a game-changer. But we need to train our workforce - the new machinery requires skilled operators. Courses in ITIs must be updated. GST reform on MMF is a welcome step but more needs to be done.
As someone who's travelled extensively across India's textile clusters, I see both the potential and the challenges. The resilience mentioned is real - during COVID, many mills pivoted to PPE and medical textiles. But the report is right to highlight FTAs. Without the EU-UK deals, India will keep losing to Bangladesh and Vietnam. The domestic market is strong, but exports are where the growth multiplier lies.
K We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.