Textile Manufacturing Industry in India 2023

Textile Manufacturing Industry in India 2023

Market insights:

The scope of textile design and its production is significant in India due to the abundance of resources and a strong history of textiles. With more than 65 million employees in the direct and associated sectors, the Indian textile industry contributes 2.3% to the country’s GDP, 13% to industrial production, and 12% to total export earnings. The textile industry in India is expected to reach INR 31.02 Trn in FY 2027, expanding at a CAGR of ~17.41% during the FY 2023 ─ FY 2027 forecast period.

Programs like Skill India and Make-in-India, along with continuous development and growth in the management consulting firms in India for foreign companies, is working in favor of the developments in the Indian textile industry. The access to skilled manpower and a good market for textile products, the industry would become competitive in the global market. With proper market entry strategy for global giants in the market, the future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand.

Segmentation:

The textile industry in India is segmented into- the unorganized sector and the organized sector. In FY 2022, the unorganized segment dominated the textile industry with 55% share of the market. As more manufacturers adopt cutting-edge solutions in the textile industry during the post-lockdown phase, the unorganized sector's market share is anticipated to decline significantly. The organized sector is expected to expand at a higher growth rate with a market share of~45% in FY 2022 and ~47.50%, respectively in FY 2027.

Impact of COVID-19:

The Indian textiles sector has been one of the worst hit sectors due to the COVID-19 crisis. In the context of its socio-economic primacy for the Indian economy, which is second only to agriculture, the industry must be given sufficient attention in academic and policy circles.

The Indian textile sector is facing issues such as lack of technology upgradation, inefficient infrastructure, fragmented industry structure, sluggish demand in major export markets like the USA and the EU due to the impact of the Global Financial Crisis and rising competition from countries such as Vietnam, Bangladesh, China and Turkey in areas such as apparels, cotton fabric and carpets.

However, the industry also has several growth opportunities in the coming decade. Due to the lockdown, the online textile sector in many tiers I and tier II cities saw an increase in sales. Moreover, internet-based companies in India stand a decent potential of becoming unicorns due to the growing trend in the online textile industry.