Revitalizing India’s Textile Industry: Overcoming Competitiveness and Sustainability Challenges
(Source – Indian Express, Section – Economy- Page No. – 13)
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Topic: GS3 – Indian Economy |
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Context |
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Analysis of the news
Overview of India’s Textile Industry
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India’s textile industry is the second-largest globally, spanning from cotton farming to apparel manufacturing.
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Despite this, it trails China, Vietnam, and Bangladesh in exports due to fragmented supply chains, high production costs, and complex regulations.
Fibre to Fabric: Strengths and Gaps
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India leads in cotton production and man-made fibres (MMF).
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However, per capita fibre consumption remains low compared to global averages.
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MSME clusters dominate the value chain but lack integration, impacting cost efficiency and scalability.
Growth and Export Performance
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The industry contributes 13% to industrial production and 12% to exports but has seen contraction post-Covid.
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In FY24, textile and apparel exports were $34.1 billion, with significant dependence on US and EU markets.
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The garment sector witnessed a decline, highlighting competitiveness issues.
Challenges Hindering Export Competitiveness
India faces stiff competition due to:
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Fragmented supply chains increasing logistical costs.
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High MMF costs, with domestic fibres priced significantly higher than imports.
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Complex export procedures and lack of favourable FTAs.
Competitor countries benefit from vertical integration and streamlined regulations.
Sustainability: The Emerging Challenge
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With global markets adopting strict sustainability norms, Indian firms face rising costs for compliance.
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The EU’s new legislation poses hurdles, especially for small enterprises.
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However, India’s textile recycling market, projected to reach $400 million, offers growth opportunities.
Way Forward
To enhance competitiveness, India must:
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Promote vertical integration in textile clusters.
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Simplify regulatory processes and negotiate strategic FTAs.
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Invest in sustainable practices and textile recycling infrastructure.
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Reduce MMF production costs through policy support.
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What are the Government Initiatives to boost the Textile Sector? |
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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. |
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Practice Question: Discuss the challenges faced by India’s textile industry in competing with global players like China, Vietnam, and Bangladesh. Suggest measures to enhance the export competitiveness of India’s textile sector, considering sustainability and supply chain integration. (150 Words /10 marks) |
