Indian textile and clothing industry, one of the topmost contributors to the global textile and clothing supply chain, continued to capture the new emerging markets including Southeast Asia and Africa.

India's largest exported product group is apparel, which contributed 48 percent of the industry's exports. It is followed by home textile and made-ups altogether with a share of 14 percent. Fibre and yarn together registered the highest growth rate in all product groups. Indian textile and clothing export industry relied more on markets such as EU and the US with export shares of 19 and 18 percent respectively followed by UAE, China and Bangladesh.

India stood at the 2nd rank in the list of textiles and apparel exporter all over the world with a share of 6 percent. In 2018, India's total textile and clothing export was US$ 37,148.05 million. India significantly targets the US, EU, Bangladesh, UAE, UK and China for the textile and clothing exports. Currently, the domestic consumption of the India contributed for 70 percent and exports 30 percent. The abundance of the raw material and skilled manpower with favourable government support through trade policies and trade agreements would further increase its market share and competitiveness globally.

Now India is focusing on the Latin America, a new emerging and potential market for textiles and clothing along with Africa and Southeast Asia. Latin American countries were initially very much dependent on the EU and the US for exports. But now they are also looking for the new markets including major Asian economies.

India's trade with Latin America


Overall exports of Indian textile and clothing to the Latin American countries have shown steady to a decline in trade from 2014 to 2018. The Indian textile and clothing exports was US$ 1838.67 million in 2014 and declined to US$ 1751.26 million in 2018 due to decreasing apparel and fibre exports amid downward revision in export incentives under the GST regime. Also, in recent years, India cotton fibre exports to Brazil showed the upward trend. It is expected to show the growth in the upcoming future as the considerable stability in the GST regime and ongoing Sino-US trade war. It is anticipated to grow at CAGR of 12 percent to US$ 2539.71 million by 2021. Indian fibre, home textiles, fabric and yarn exports are expected to grow with higher rates to emerging economies as compared to the major economies such as Brazil, Mexico and Argentina.

Initiatives from the Indian government to boost the exports

Indian government has taken multiple initiatives to enhance export of textile and clothing products to world with special package for garments and made-ups sectors. It includes labour law reforms, Rebate of State Levies (RoSL), additional incentives under ATUFS and relaxation of Section 80JJAA of Income Tax Act. Merchandise Exports from India Scheme (MEIS) rates have been increased 2 to 4 percent for apparel and 5 to 7 percent for made-ups.

Interest equalisation rate had been enhanced for pre and post shipment credit for the textile sector from 3 to 5 percent w.e.f. 2nd November 2018.