The global textile sector has undergone a significant metamorphosis in recent times. China’s long-standing hegemony is coming under more and more pressure from newcomers like Bangladesh and Vietnam. These nations have successfully altered the competitive landscape of the sector by capturing sizable market share via the strategic placement and cost-effective labor force use. This change has not only left a void, but also presented India with a fantastic chance to seize the initiative and restore its place in textile history. But in order to realise this potential, India has to confront its own structural problems and inefficiencies head-on. Through assiduously analyzing China’s achievements and historical errors, India may reposition itself to become a dominant player in the world textile market. It is impossible to exaggerate how urgent the situation is; we must act now, decisively, and quickly.
The Ascent and Peak of China’s Dominance in Textiles
It is necessary to first look at China’s path in order to comprehend the current opportunities. The phrase “Made in China” has long been used to describe the excellence of global production, particularly in the textile industry. China positioned itself as the global center of manufacturing when economic reforms started in the 1970s, with textiles playing a key part in this endeavor. By 2000, this action had created 83 million factory jobs and lifted an incredible 800 million people out of severe poverty, making it a game-changer. More than 700 million Chinese people have entered the middle class by 2018, demonstrating the effectiveness of industrial strategy and economic planning.
But China’s sheer prosperity has brought out new difficulties. The fast development of textile manufacturing areas attracted more young people to higher education. China graduated 11.58 million people from college in 2023 alone, up 800,000 over 2022. Due to this generational transition, there is a labor shortage in the textile industry since fewer young Chinese people are ready to work on factory floors.
India’s Present Situation: A Story of Lost Chances
It seems sense that India would step in to fill the hole left by China’s collapsing textile sector. Ultimately, the textile industry supports 100 million jobs in related industries and employs 45 million people directly, making it the second biggest employer in the nation after agriculture. But the actual world depicts a different image.
According to a recent Global Trade Research Initiative (GTRI) report7, India’s textile exports have actually dropped, falling 7.87 percent from $37.16 billion in 2018 to $34.24 billion in 2023. India lags well behind China ($114 billion), the EU ($94.4 billion), Vietnam ($81.6 billion), and even Bangladesh ($43.8 billion) in terms of garment exports, with a meagre $14.5 billion in 2023.
There is no shortage of potential causing this stagnation. With 1.4 billion people living there, India offers a sizable labor force as well as a sizable home market. However, smaller countries like Bangladesh and Vietnam, whose garment exports increased by 69.6% and 81.6%, respectively, between 2013 and 2023, are outpacing the nation. According to the GTRI research, India’s growth over the same time was a pitiful 4.6%.
Identifying the Obstacles: Principal Concerns Impeding India’s Textile Sector
It is imperative to solve a number of underlying issues that have long dogged India’s textile industry in order to properly take advantage of the new prospects in the global textile market. The primary concerns that need immediate action are outlined in the following points:
- The Synthetic Apparel Gap: Despite industrialized nations’ evident preference for synthetic materials, less than 40% of Indian textile exports are made of them. The nation’s textile sector is no longer linked to rapidly evolving global value chains due to this mismatch.
- Fragmented Weaving and Processing: Small, unorganized businesses with little resources in terms of size, technology and experience dominate India’s weaving and processing industries. Indian plants struggle with fewer than 20,000 meters of fabric per day, but Chinese ones can handle 10 lakh meters.
- The Fast Fashion Industry (FFI) is non-compliant; of the factories required to compete worldwide, only 1,200 are located in India and fulfill FFI requirements. Efficiency measures like the standard allowable minute (SAM), which are essential for obtaining orders from large merchants, are a source of frustration for the business.
- Strict Labor Laws: Present laws make it difficult for manufacturers employing more than 300 people to change the composition of their workforce, which deters the development of large-scale operations that are essential for high production volumes and constant quality.
- Limited Market Access: India’s textiles are less competitive globally because, as an emerging market rather than a least developed nation, it is subject to import levies that Bangladesh and Sri Lanka are not.
- Weak Contract Enforcement: This problem discourages prospective partners and investors and impedes the expansion of the business.
- Insufficient Attention to Sustainability: India has not yet completely tapped into its potential for environmentally friendly manufacture in the field of ethical and sustainable apparel, despite a growing demand for such products worldwide.
Choosing a Path for Recovery: Tactical Suggestions
India has to put into action a comprehensive plan in order to reclaim its textile glory and surpass rivals like Bangladesh and Vietnam:
- Adopt Synthetic Apparel: To meet demand worldwide, quickly boost exports and manufacture of synthetic clothing. With this change, factories may remain open all year round, resulting in higher worker pay and productivity.
- Modernize and Expand: Make investments in expansive, high-tech weaving and processing facilities. Establish 10 or more of these units a year, emulating China’s prosperous 1990s model.
- Fast Fashion Compliance: To satisfy FFI criteria, improve efficiency metrics, especially SAM. This entails making investments in cutting-edge technology and competent labor.
- Liberalize Labor Laws: Provide for more latitude in hiring and dismissing while maintaining the necessary protections. Larger units would be encouraged to be established as a result, increasing production in terms of both quantity and quality.
- Simplify Fabric Imports: Take a cue from Bangladesh’s successful import of textiles to create apparel of the highest quality. This can assist get over restrictions on local manufacture, particularly with synthetics.
- Negotiate Better Trade Terms: To level the playing field with rivals, work to eliminate non-tariff trade obstacles in prospective Free Trade Agreements (FTAs) with partners including the EU and the UK.
- Put Sustainability First: To satisfy the growing demand for environment friendly apparel worldwide, take use of India’s natural edge in the manufacture of eco-friendly cotton.
- Make research and development (R&D) investments to keep ahead of global developments in textile technology, sustainable materials and manufacturing techniques.
- Skill Development: Put in place extensive training programs to upskill employees and get them ready for cutting-edge manufacturing methods and technology.
- Upgrade Infrastructure: To save expenses associated with logistics and boost overall effectiveness, invest in improved electricity, transportation, and digital infrastructure.
Increased Budget for the Textile Sector: A Step in the Right Direction, But MSMEs Still Need More Help
Finance Minister Nirmala Sitharaman recently unveiled the 2024 budget, which includes ₹4,417.03 crore for the fiscal year 2024–25, a 28% increase from the previous year. This amount shows a major commitment to reviving India’s textile industry. The National Technical Textile Mission, improved cotton procurement and skill development programs are the three main goals of this additional investment. These actions are much appreciated and a start in the right direction toward strengthening the industry’s basis.
Even while these programs seem promising, the budget does not adequately address the unique requirements of the MSME sector, which accounts for 80% of the nation’s textile industry. It is a noteworthy error that there are no specific incentive programs for MSMEs in the textile industry, especially considering how important they are to the sector. Although the Production Linked Incentive (PLI) scheme’s funding was increased from ₹5 crore to ₹45 crore, this is a great step, but it is insufficient to adequately address the industry’s competitiveness issues.
The government must put in place more comprehensive policies that specifically address the obstacles MSMEs confront if it is to have a really revolutionary effect. To improve their capability, competitiveness, and market access, this entails developing certain incentives and support systems. The textile sector in India can only reach its full potential with focused and strong support.
A Call to Action: Crafting a Novel Narrative of Success
It is essential to keep in mind that the textile business is about more than simply economic data or export-related statistics at this pivotal point. Millions of Indian families have their lives entwined with this industry. It is about recovering India’s history as a global leader in textiles and creating a more promising and sustainable future for future generations.
The world of textiles is evolving quickly. With China’s influence waning, the globe is searching for the next major textile center. India is in a great position to take advantage of this opportunity because of its large workforce, rich textile legacy and developing technical skills.
But time is not on our side. The country has to take immediate action and put big changes and creative plans into action. To compete on the world stage, a culture of quality, efficiency, and sustainability must be promoted. Developing a textile sector that is not just large but also really world-class requires significant investments in people, technology and infrastructure.
Its actions will determine the course of India’s economy. It’s time to weave a brand-new, resilient, inventive and really global success story. “Made in India” ought to be synonymous with excellence, sustainability and development that prioritises people.
It is crucial to keep in mind that every worker matters, every thread counts and every invention has the potential to be the differentiator that puts India at the forefront of the world textile industry as it sets off on its transformative path. Now that the loom is ready, the colors are brilliant, and India is ready to weave its greatest tapestry to date—a thriving, globally dominant textile sector that pays tribute to its history while daringly forging forward.
