Make in India: Why the textile and garment sector
‘Make in India’ campaign covering 25 sectors, including the textile and garment industry, has been launched by Prime Minister Narendra Modi in the presence of Who’s Who of the corporate world from India and abroad at a ceremony in New Delhi.
At the launch of the ambitious ‘Make in India’ project to make India a manufacturing hub, Prime Minister Modi promised effective and easy governance to help achieve high growth and creation of jobs.
The ‘Make in India’ scheme also puts in place the logistics and systems to address in a timely manner queries of potential investors. The scheme has been unveiled along with a logo, a web portal, and brochures on 25 identified growth sectors.
Home to 24 percent of the world’s spindles, and 8 percent of the world’s rotors, India is the world’s second largest producer of cotton and silk, and also the second largest textile manufacturer. Besides this, India enjoys a comparative advantage in terms of skilled manpower and cost of production over other major textile producers, which makes the country a preferred destination for investment.
In the coming years, increased penetration of organised retail, favourable demographics and rising income levels are expected to drive textile demand. Further, pointed and favourable policies instituted by the Government will give the industry a fillip.
Moreover, the Government of India allows 100 percent foreign direct investment (FDI) under the automatic route in the textile sector, subject to all applicable regulations and laws, which effectively backs the Make in India programme for the textile and garment industry.
Already several foreign companies have invested in India. These include textile machinery manufacturers Rieter and Trutzschler; and apparel retailers like Zara and Mango (both from Spain), Promod (France), Benetton (Italy), Esprit, Levi’s and Forever 21 (all from the US).
Under the Make in India initiative, investment opportunities for foreign companies and entrepreneurs are available across the entire value chain of synthetics, value-added and special fabrics, fabric processing set-ups for all kinds of natural and synthetic textiles, technical textiles, garments, and retail brands. India is also home to a huge resource of skilled manpower in textiles and garments. The relative lower cost of production compared to competing countries, also offers investment benefits in the country.
India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 15 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The textile industry has two broad segments, first, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.
The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralized power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.
Make in India: The growth of textile and garment sector
The garment and textile sector seems to be a huge affirmation to the achievements of Make in India campaign. The favourable policies under the Indian Government’s initiative are leading the sector towards growth.
In the brief span since the launch of Make in India, the garment sector showed a record escalation of exports to its largest market, the US, in 2014. The excellence in the US market can be attributed to the growth of domestic cotton supplies in India. India is coming up as the world’s largest cotton grower surpassing China. Certain global factors like stabilisation of US economy also worked for the apparel industry.
A couple of years ago, 65 percent of the garments exported to the US and Europe was from China. Now China is facing stiff competition from India in this sector. India has taken over 25-30 percent of the garment and textile export market, bringing China’s exports down to 40 percent.
Increase in availability of raw materials for fabric is also becoming a major driver for apparel manufacturing that has a direct impact on exports.
India with its advantage of manufacturing costs and better labour conditions, has a positive path ahead. Based on the current scenario the trade pundits have forecasted a favourable upward trend for the Indian garment and textile sector.
‘Textiles and garment’ is the only sector that offers the promise and potential to preserve and promote India’s cultural identity. It is a sector that allows the possibility of mapping culture and history to context, which is very critical in today’s era of rapid industrialisation, says Mahesh Subramaniam, the founder of Craftisan.in, an e-commerce business that celebrates the philosophy of handwork through India’s finest crafts and craftsmanship.
The Indian fashion industry is not far behind in rallying the cause of handmade textiles. As a show of support, top Indian fashion designers like Ritu Kumar, Anita Dongre, Rohit Bal, Manish Malhotra and Sabyasachi Mukherjee have created spectacular collections based entirely on Benarasi handwoven silks.
Sunil Sethi, the craft-loving president of the Fashion Design Council of India has orchestrated fashion shows in historic textile hubs, including Ahmedabad and Banaras, with catchy titles like “Huts to High Street”” to “Born in Banaras — Crafts of India”. He has also harnessed the star power of leading Bollywood names like Sonam Kapoor and Salman Khan appeared on the runway in indigenous fabrics, taking the textile conversation from grassroots to glamour.
It is a tour de force in the textile sector, providing the perfect context for a meaningful discourse. It narrates a universal tale of how a handmade fabric can find soul-stirring reference in today’s fast paced milieu.
The vision behind this initiative is to recreate the inherent talent of Indian weavers which has been dying out and forefront, trickling down to everyday wear. Today, India’s credibility is stronger than ever. There is visible momentum, energy and optimism. Make in India is opening investment doors. Multiple enterprises are adopting its mantra. The world’s largest democracy is well on its way to becoming the world’s most powerful economy.