Key Issues Faced by Indian Textile and Apparel Industry in Global Market
The textile sector of India is one of the oldest sectors in its economy.The Indian apparel exports data shows that textile exports have a dominant share of 43% of the total Indian exports. Though India has a large textile manufacturing set up and has production facilities across all levels of manufacturing chain, there are still some challenges faced by the Indian textile and apparel sector while competing in the global market. On comparing the export share of the world’s largest exporter, China (boasting 40% of total global textile exports), India captures only 5%.
Other countries like Bangladesh, Germany, and PERFORMANCE FABRIC Italy, which are smaller nations in comparison to India, have a similar share of around 5%. This reveals that India has not realised its potential even after having a complete value chain and an abundant supply of cheap and skilled labour.
Here are some of the key issues faced by the second-largest sector in the Indian economy:
High Input Cost: The higher cost of the initial capital in India affects the production cost and thus impacts its competitiveness among the other competing countries. Currently, the lending rate is around 11-12.5% wherein other countries have it around 5-7%. Other than this, the cost of power is also very high in India.
Poor Technology: The textile and apparel sector is very dynamic and versatile and evolves every day. While considering the cost and speed of production, brands and manufacturers have to consider quality, compliance, and capacity to survive globally. The use of outdated technology in this sector is the major hurdle in this regard. The textile companies spend very less on R&D and product development. As a result, the country has a very nominal presence in the high value-added and technical textile segments.
The textile sector of India is one of the oldest sectors in its economy.The Indian apparel exports data shows that textile exports have a dominant share of 43% of the total Indian exports. Though India has a large textile manufacturing set up and has production facilities across all levels of manufacturing chain, there are still some challenges faced by the Indian textile and apparel sector while competing in the global market. On comparing the export share of the world’s largest exporter, China (boasting 40% of total global textile exports), India captures only 5%. Other countries like Bangladesh, Germany, and PERFORMANCE FABRIC Italy, which are smaller nations in comparison to India, have a similar share of around 5%. This reveals that India has not realised its potential even after having a complete value chain and an abundant supply of cheap and skilled labour. Here are some of the key issues faced by the second-largest sector in the Indian economy: High Input Cost: The higher cost of the initial capital in India affects the production cost and thus impacts its competitiveness among the other competing countries. Currently, the lending rate is around 11-12.5% wherein other countries have it around 5-7%. Other than this, the cost of power is also very high in India. Poor Technology: The textile and apparel sector is very dynamic and versatile and evolves every day. While considering the cost and speed of production, brands and manufacturers have to consider quality, compliance, and capacity to survive globally. The use of outdated technology in this sector is the major hurdle in this regard. The textile companies spend very less on R&D and product development. As a result, the country has a very nominal presence in the high value-added and technical textile segments.