The Indian textiles industry has significantly contributed to the economic life of the country. Liberalization in India and the scrapping of quotas in world trade of textiles and clothing has bolstered growth for the sector. In the post quota period, the industry size has expanded from US$ 37 billion in 2004-05 to US$ 49 billion in 2006-07. In this period, while the domestic market increased from US$ 23 billion to US$ 30 billion, exports increased from around US$ 14 billion to US$ 19 billion.

A leading sector in the Indian economy, textiles contributes 14% to industrial production, 4% to the GDP and around 17% to the total export earnings. It is, in fact, the largest foreign exchange earning sector in the country. In addition, it provides direct employment to over 35 million people. And with continuing growth momentum, its role in the Indian economy is bound to increase.

The India Advantage

The textiles and apparels sector is a major contributor to our economy in terms of foreign exchange earnings and employment. Moreover certain natural advantages and external factors have fuelled the growth of this industry with a clear competitive edge.

India has overtaken the US to become the world's 2nd largest cotton producing country, after China, as per a study by International Service for the Acquisition of Agri-biotech Application. BT cotton was a major factor contributing to higher rate of production, from 15.8 million bales in 2001-02 to 31 million bales in 2007-08.

India accounts for 61 % of the global loomage, 22% of global spindle age, 12% of world's production of textile fibres & yarn, and 25% share in the total world trade of cotton yarn.

Textiles and Apparel trade

The global textiles and apparel trade estimated at US$ 450 billion and expected to touch US$ 700 billion by 201 0 with demand for textiles and apparels expected to grow to 25% from current figures where Asia will contribute 85%. The sudden growth and demand for textiles and apparels will prompt international brands and buyers to look to source from low cost producing countries.

India's textiles and apparels industry is estimated to be worth US$ 49 billion where 39% is accounted by the exports market. The domestic and exports markets in this sector are expected to grow at 6.5% and 12% CAGR respectively. The growth has continued with total exports increasing to US$ 19.62 billion in 2006-07. Currently India has a 3.5 - 4% share in world export of textiles and 3% in clothing exports.

Indian textiles and products hand looms and handicrafts are exported to more than a 100 countries, Europe continues to be India's major export market with 22% share in textiles and 43% in apparel, the US is the single largest buyer of Indian textiles and apparel with 19% and 32.6% share respectively. Other significant countries in the export list include the UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan. A recent study of the textile industry predicts growth for the sector form USD 19 billion in 2006-07 to USD 50 billion by 2012.

Readymade garments (RMG) are the largest export segment, accounting for 45% of total textile exports and 8.2% of India's total exports. This segment has benefited significantly with the termination of the Multi-Fibre Arrangement (MFA) in January 2005. Readymade garments exports from India are expected to touch US$ 14.5 billion by 2009-10 with a cumulative annual growth of 18 to 20%, according to Apparel Export Promotion Council.

Another segment in which India has excelled in the export market is carpets. Exports of carpets have increased from US$ 654.32 million in 2004-05 to US$ 930.69 million in 2006-07, a growth rate of 42.23%. During Apr-Oct '07, carpet exports totaled US$ 404.74 million, making India the world leader with 36% of the global market share.

Technical Textiles

The technical textiles industry has witnessed robust growth due to strong demand for automotive fabrics and is estimated to be worth around US$ 5.09 billion, with a potential to be a US$ 12.62 billion market by 2009-10. The Indian textiles market is an emerging industry where the government is making and effort to ensure investments are made in this sector sO as to reap profits as technical textiles is said to offer very high unit value realisations, making this area a profitable business venture. The market for technical textiles is poised for a stupendous growth. The attractive growth statistics of skilled scientific and technical manpower will be a catalyst in shaping the future of this industry.