Context

• Prime Minister in his Mann Ki Baat Programme remarked that Textile Sector has became a strength of the Countries Economy.

About the News

• He mentioned that over 3,000 textile start-ups are now active in India, many of which are promoting India’s handloom identity on a global scale.
• The Prime Minister pointed out that this year marks the 10th anniversary of National Handloom Day.

About Textile Sector in India

• Cotton Production and Employment
• India is the second-largest cotton producer globally, contributing 24% of global production. 
• Cotton farming involves around 60 lakh farmers, primarily in Gujarat, Maharashtra, and Telangana. 
• The cotton textile value chain, from fibre processing to garment manufacturing, employs over 4.5 crore people.

Man-Made Fibre (MMF) Industry

• India is also the second-largest producer of MMF, with Reliance Industries leading in polyester and Grasim Industries being the sole domestic producer of viscose. 
• However, MMF consumption in India remains low at 3.1 kg per capita, compared to 12 kg in China and 22.5 kg in North America. 
• Overall fibre consumption, including natural and synthetic fibres, is 5.5 kg per capita, below the global average of 11.2 kg.

MSME Clusters and Specialisations

• Around 80% of India’s textile value chain operates within MSME clusters, each specializing in different textiles:
• Bhiwandi (Maharashtra) – Fabric production
• Tiruppur (Tamil Nadu) – T-shirts and undergarments
• Surat (Gujarat) – Polyester and nylon fabrics
• Ludhiana (Punjab) – Woolen garments.

Other Facets of the Sector

• Contribution: The textile and apparel industry contributes 2.3% to our GDP, 13% to industrial production, and 12% to exports. 
• Export Basket: India exported textile items worth US$ 34.4 billion in 2023-24, with apparel constituting 42%, followed by raw materials/semi-finished materials at 34% and finished non-apparel goods at 30%. 
• Employment: It is the second largest employment generator, after agriculture, with over 45 million people employed directly.
  • Nearly 80% of its capacity is spread across Micro, Small and Medium Enterprises (MSME) clusters in the country.
• Future Projections: Indian textile market currently ranks fifth globally, and the government is actively working to accelerate this growth to a rate of 15-20% over the next five years.

Challenges Faced by the Sector

• Fragmented Structure: Predominantly unorganised and decentralised, especially in the powerloom and handloom sectors.
• Outdated machinery in many units leads to: Low productivity, poor quality output and higher operational costs compared to global competitors (e.g., China, Bangladesh).
• Inadequate Infrastructure: Poor logistics, power shortages, and high cost of electricity.
• Environmental Concerns: Textile processing is water- and chemical-intensive.
• Non-compliance with environmental norms leads to factory closures and export bans.
• India trails China, Vietnam, and Bangladesh in textile exports due to higher production costs and a fragmented supply chain. 
• In contrast, Vietnam exported $40 billion worth of apparel in 2023, benefiting from vertically integrated supply chains that lower manufacturing costs.
• India’s man-made fibre (MMF) sector suffers from high raw material costs. 
• Quality control orders (QCOs) restrict imports of polyester and viscose fibres, forcing domestic yarn makers to rely on costlier local alternatives.

Government Initiatives for the Sector

• The Make in India initiative has catalyzed textile manufacturing and exports through key policy interventions, enhanced infrastructure, and incentives. 
• Production Linked Incentive (PLI) Scheme for Textiles: To increase manufacturing in man-made fibre (MMF) and technical textiles.
• Financial incentives for large-scale textile manufacturers.
• PM MITRA (Mega Integrated Textile Region and Apparel) Parks: For developing integrated large scale and modern industrial infrastructure facilities for the total value-chain of the textile industry like spinning, weaving, processing, garmenting, textile manufacturing, processing & textile machinery industry.
• Current Status: A total of 7 Parks established in states of Gujarat, Maharashtra, Madhya Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, and Telangana.
• Amended Technology Upgradation Fund Scheme (ATUFS): It provides capital subsidies for technology upgradation.
• Samarth (Scheme for Capacity Building in Textile Sector): To provide skill training to workers in the textile industry, in partnership with the Ministry of Skill Development & Entrepreneurship.
• Textile Cluster Development Scheme (TCDS): To create an integrated workspace and linkages-based ecosystem for existing as well as potential textile units/clusters to make them operationally and financially viable.