Historically, Indian textiles have had massive demand globally. Having traded with the Chinese, Indonesians, Romans, Portuguese, and the British, India became well-known for its raw materials like silk, cotton, jute, wool, design, and craftsmanship.
Consequently, the modern textile manufacturing industry and its offshoot, the retail clothing sector, are no less profitable or in demand with such a strong heritage!
In fact, there is substantial growth predicted. As per reports, even in a pandemic-ridden world, Indian textile manufacturers will likely witness a 20-25% growth in 2021. The strong festive demands coupled with extensive vaccination coverage are factors responsible for this number.
As per 2020 reports, textiles contributed around 2% of the Indian GDP, employing over 45 million people. Moreover, the industry makes a significant contribution of 12% to India’s export earnings. Further, the demand in export was led by the USA. Accounting for 60% of the exports, it is a 14% increase since 2020. Hence, any entry into this market sector with the help of a textile & apparel consulting services firm in India is likely to yield significant dividends.
The Textile Manufacturing Industry in India – A Complete Market Overview
India is the 2nd largest producer of silk globally, and 95% of the world’s hand-woven fabric comes from the country.
Hence, the future and the present look bright for clothing retail industries to enter with the help of any leading business consulting for Indian market entry and expansion. Below are more details on the textiles in India.
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Market Composition and Size
The textile and apparel industry has a market size of USD 150 billion as of 2020. It is also well-known as the second-largest employer after agriculture in the country.
Hence, skilled labour is available for textile manufacturing. The sector-wise composition of Indian textiles until January 2020 is as follows:
- Ready-made garments (37.6%)
- Cotton Yarn / Fabrics / Made-ups / Handloom Products (37.6%)
- Manmade Yarn / Fabrics / Made-ups (14.0%)
- Handicrafts excluding Handmade Carpet (5.0%)
- Carpet (4.7%)
- Jute manufacturing including Floor Covering (1.2%)
India is the second-largest manufacturer of PPE in the world. The global market worth of PPEs is expected to grow to USD 92.5 billion in 2025 from USD 52.7 billion in 2019.
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Textile Hubs in India
Indian states like Andhra Pradesh, Telangana, and Haryana are reputed for the ease of doing business. They also have reputed hubs for textile and apparel manufacturing. Reputed textile consultants in India can guide you to the right textile clusters, such as Ludhiana and Jalandhar in Punjab.
The top 5 clothing and apparel manufacturing the Indian States are:
- Andhra Pradesh
- Telangana
- Haryana
- Jharkhand
- Gujarat
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Apparel Retail – Single Brand / Multi Brand
FDI for single brand and multi-brand vary in India.
- Single brand retailers enjoy 100% FDI under the automatic route.
- Multi-brand retailers enjoy 51% under FDI, which varies across the states.
As per DIPP regulation, India permits only single-brand retailing. Moreover, multi-brand retailers are not allowed to do trade via e-commerce platforms. However, several bodies have been lobbying the Government for changes regarding this policy.
Comprehensive market entry assistance from any business consulting for Indian market entry and expansion will help investors understand the difference between a single brand and multi-brand retail options available for market entrants.
Advantages for Textile Manufacturing Industry and Clothing Retail in India
There are plenty of advantages of setting up Textile Manufacturing and Retail Sector in India. A few of the advantages are:
- There is a wide availability of skilled labour at a low cost. This highly trained and talented workforce provides a competitive edge if trying to embark on new ventures in India.
- Apart from the significant availability of skilled labour, there is an abundance of raw materials for the textile industry. As a result, cotton fibre and synthetic fibre industries have grown considerably in the country.
- Moreover, a new demographic of young India that is aspirational and upwardly mobile exists as a potential market for ready-made garments. A rising income level also bodes favourably for the textile industry in India.
The pandemic has caused a rise in demand for PPE suits and equipment. With the Indian Government getting on board, investors can expect funding and machinery sponsorship.
- There is plenty of policy support from the Indian Government for the textile industry as well. For example, the Government allows 100% FDI, PLI schemes worth USD 1.44 billion, and other schemes.
Government Initiatives in the Textile Manufacturing and Clothing Retail
There is plenty of Government support for the textile industry. The details are as follows:
- The Indian Government allows 100% FDI in textile.
- It also provides Production-linked Incentive (PLI) schemes of USD 4 billion for five years in technical textile and manufactured fibre.
- Further, the Government proposes to open 7 textile parks and in view of this seeks to invest considerably in the sector by 2025-26
Hence, with the help of textile consultants in India, you may successfully enter in Textile Manufacturing and Retail Sector of India as there is widespread Government support.
Achievements Over the Last 4 Years
A few of the achievements of the textile industry over the last 4 years are:
- A Government e-Marketplace is available for weavers, artisans, etc., to directly sell to Government organizations.
- To promote the handloom industry, the Government has also set up a social media campaign #Vocal4handmade. The campaign resulted in increased interest in handlooms of India.
Development of Craft villages in select pockets of the country to attract tourism and inspire interest in handlooms.
The Need for a Textile & Apparel Consulting Services Firm in India
When making an entry into a new country, especially one as diverse as India, with a vastly different work ethic and language, several considerations must be made. A complete India entry strategy must be finalized to avoid losses and unnecessary expenditure.
Moreover, consultancy firms like Tecnova hand-hold companies through the entire process of setting up and beginning operations in India. Consulting firms provide the necessary groundwork and numerous other facilities like helping a company understand and comply with government regulations and helping them get an insight into the competition, etc. Other works performed by a consulting service are:
- Analysing the latest trends in the market sector.
- Providing the client with a look at the demand and supply gap
- Helping in the merger and acquisition of different Indian companies, if the need be.
To wrap up, a textile & apparel consulting services firm in India can help all foreign entrants into the Indian market set up and run their operations.
With this the Textile Manufacturing and Retail Sector in India is expected to double in value in the upcoming years, foreign firms can step onto Indian shores with confidence. Further, the best consulting firms will guide them into complying with the rules and regulations. Moreover, consulting firms also help with the operation set-up, acquiring of the right talent as well as in conducting market research. They provide a comprehensive package regarding any foreign firm’s entry into a local market.
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