As per the quick estimates released by the Ministry of Commerce, India’s exports of Textile & Apparel during Apr’24-Feb’25 stands at about US$ 33.2 bn which is about 7.2% higher than growth rate of similar period of last year.
Based on this, it is estimated that India’s T&A exports are likely to reach about US$ 37-39 bn for the year 2024-25.
To achieve the ambitious target of US$ 100 billion in exports by 2030 from present level, India’s T&A sector must register a compound annual growth rate (CAGR) of approximately 18% for the period 2025-2030. While we are falling short of this target, on the contrary, our T&A exports have been stagnated at the 2015 level (US$ 37.15 billion)
The Government of India is actively working for the growth of the Indian T&A industry. Favourable conclusion of the on-going trade negotiations with the world’s largest markets, like EU-27 & USA, combined with the schemes like PLI and PM MITRA may catalyze the growth of the Indian T&A industry towards achieving the desired market size.
However, to capitalize on these opportunities and to meet the required growth rate to achieve the desired target, it is necessary to address the current challenges being faced by the industry and affecting its growth.
Based the deliberations at the National Committee on Textiles and Clothing (NCTC) meeting held on 18th May 2024, several suggestions had emerged for attaining the requisite growth of the industry (Annex 1), major 5 of which are given below:
Ensure enough availability of raw materials of all types, including cotton, MMF and specialized fiber/filaments/yarns, at internationally competitive prices. For the same, Government may remove all import restrictions and barriers on all types of raw materials, especially those that are not available domestically in terms of required quality or quantity.
Remove 10% import duty from cotton fibres of all varieties to enhance the cost competitiveness of the entire cotton value chain. The latest estimate of the cotton balance sheet by the government shows a demand-supply gap of about 38 lakh bales for the current year, and hence there is a dire need to allow duty-free imports.
Announce an incentivization scheme with a mix of an upfront capital subsidy and a performance-based incentive to catalyze investment across the value chain. A special focus may be put on the processing sector in this regard.
Fast track the implementation of the PM MITRA parks
Expedite FTAs with markets like the EU and the USA, which will provide Indian exporters a level playing field with its competitors.
Apart from the above, there should not be a further increase in GST rates for ready-made garment products.
By focusing on these priority areas, India’s T&A industry will be well-positioned to overcome current challenges, leverage emerging global opportunities, and realize its long-term growth potential.
CREDITS: Citi India–The Confederation of Indian Textile Industry.