Textiles: The Indian advantage
The Indian textiles industry, which already has an overwhelming presence in the economic life of the country, has been given a further thrust with the scrapping of quotas in world trade of textiles and clothing. 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 per cent to industrial production, 4 per cent to the GDP and around 17 per cent 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. And with continuing growth momentum, its role in the Indian economy is bound to increase.
India Advantage
India has certain natural advantages which has propelled the growth of its textiles industry.
Exports
Textiles exports, which were growing at a moderate pace till 2004-05, registered a sharp growth of 21.77 per cent in 2005-06 to touch US$ 17 billion from US4 14 billion in 2004-05, due to the scrapping of quotas. The growth has continued with total exports increasing to US$ 19.62 billion in 2006-07. Currently India has a 3.5-4 per cent share in world export of textiles and 3 per cent in clothing exports.
While Europe continues to be India's major export market with 22 per cent share in textiles and 43 per cent in apparel, the US is the single largest buyer of Indian textiles and apparel with 10 per cent and 32.6 per cent share respectively. Other significant countries in the export list include the UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan.
Readymade garments (RMG) are the largest export segment, accounting for 45 per cent of total textile exports and 8.2 per cent of India's total exports. This segment has benefitted 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 per cent, 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, showing a growth rate of 42.23 per cent. During April-October 2007, carpet exports totalled US$ 404.74 million. This makes India the world leader in carpet exports with 36 per cent of the global market share.
The Indian textiles industry, which already has an overwhelming presence in the economic life of the country, has been given a further thrust with the scrapping of quotas in world trade of textiles and clothing. 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 per cent to industrial production, 4 per cent to the GDP and around 17 per cent 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. And with continuing growth momentum, its role in the Indian economy is bound to increase.
India Advantage
India has certain natural advantages which has propelled the growth of its textiles industry.
- India is the third largest producer of cotton in the world and second largest producer of cotton yarn and textiles.
- It accounts for 61 per cent of global loomage.
- It has 22 per cent of the global spindleage.
- It accounts for 12 per cent of the world's production of textile fibres and yarn.
- India also has 25 per cent share in the total world trade in cotton yarn.
Exports
Textiles exports, which were growing at a moderate pace till 2004-05, registered a sharp growth of 21.77 per cent in 2005-06 to touch US$ 17 billion from US4 14 billion in 2004-05, due to the scrapping of quotas. The growth has continued with total exports increasing to US$ 19.62 billion in 2006-07. Currently India has a 3.5-4 per cent share in world export of textiles and 3 per cent in clothing exports.
While Europe continues to be India's major export market with 22 per cent share in textiles and 43 per cent in apparel, the US is the single largest buyer of Indian textiles and apparel with 10 per cent and 32.6 per cent share respectively. Other significant countries in the export list include the UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan.
Readymade garments (RMG) are the largest export segment, accounting for 45 per cent of total textile exports and 8.2 per cent of India's total exports. This segment has benefitted 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 per cent, 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, showing a growth rate of 42.23 per cent. During April-October 2007, carpet exports totalled US$ 404.74 million. This makes India the world leader in carpet exports with 36 per cent of the global market share.