Table of Contents
This report profiles India's textile and garment industry, discussing market trends through 2014 and outlook for 2015 and beyond. The report also highlights leading players in the sector including Alok Industries Ltd, Welspun India Ltd and Arvind Ltd.
The textile and garment sector is one of the pillars of the Indian economy. The sector accounts for 14% of the industrial production and 6% of the GDP. Besides, the sector also employs close to 45mn people and is the second largest employer after agriculture. It is a diversified sector comprising of many industries including cotton textiles industry, jute industry, silk textiles industry, woolen textiles industry, apparel industry, fibre industry, handicrafts as well as handlooms.
India's overall industrial growth recovered in FY15. It was a good year for the domestic textile sector, backed by stable growth in exports. Depreciation of the Indian rupee helped in making local textile exports more competitive amidst competition from emerging markets like Bangladesh and Vietnam. The two largest export segments, namely ready-made garments and cotton textiles, each saw a double-digit growth in USD terms during the year.
The young demographic dividend and comparatively lower cost of manufacturing bodes well for the textile and garment sector in the long-term. Exchange rate fluctuations and costly working capital loans are the biggest challenges for the sector.
o According to the Ministry of Textiles, the sector accounted for 12% of India's total exports in FY15 and acted as one of the major foreign exchange earners. During 2008-14, the sector export earnings grew at a CAGR of 8% in dollar terms.
o As of FY14, ready-made garments were the largest segment in terms of export contribution, accounting for 46% of the total export earnings. Cotton textiles were next, with a contribution of 31%. Manmade textiles were the third largest segment with a contribution of 14%. Together, these three segments accounted for 91% of India's textile exports as of FY15.
o According to UN Comtrade, India became the second largest textile exporter in the world just behind China in 2013. India also saw the highest growth (21% y/y) among the top five markets. Meanwhile, world textile exports grew by 5% y/y in the same period.
o In FY15, the sector export earnings grew by 16% y/y in USD terms, recording a second year of strong recovery after the decline in FY13.
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