INTRODUCTION

Indias textiles sector is one of the mainstays of the national economy. India has the second largest manufacturing capacity globally after China. With direct linkages to the rural economy and the agriculture sector, it has been estimated that one of every six households in the country depends on this sector, either directly or indirectly, for its livelihood. The close linkage of the Industry to agriculture and the ancient culture, and traditions of the country make the Indian textiles sector unique in comparison to the textiles industry of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country. A strong raw material production base, a vast pool of skilled and unskilled personnel, cheap labour, good export potential and low import content are some of the salient features of the Indian textile industry. On the other hand, the favourable demography (increasing share of working women, urban population and young people) along with shift in preference to branded products and increasing penetration of organized retail is expected to act as a key growth factor for the Indian textile and apparel industry. The textile industry complements the growth of several industries and institutions such as the defense forces, railways and government hospitals which are key institutional buyers of technical textiles. India is major exporting country as far as textile sector is concerned and not dependent on import. Majority of import takes place for re-export or special requirement in both textile and clothing segment. This is a traditional, robust, well-established industry, enjoying considerable demand in the domestic as well as global markets. The sector contributes 14% to industrial production, 4% to Indias GDP and constitutes 11% of the countrys export earnings[footnoteRef:2] in 2013-14. With over 45 million people employed, the industry is second largest source of employment generation in the country after agriculture. It contributes to about 5% in the US $ 1.88 trillion Indian economy.[footnoteRef:3] India is the third largest exporter of textile and apparel goods after China and European Union with a global trade share of approximately 5%. Exports in textiles and apparel from India are expected to increase to US $ 65 Billion by 2016-17 from US $ 40 Billion in 2013-14.[footnoteRef:4] [2: http://www.ibef.org/industry/textiles.aspx] [3: http://www.ibef.org/industry/textiles.aspx] [4: http://www.makeinindia.com/sector/textiles-garments/]

India textile industry largely depends upon the textile manufacturing and export. The Indian textiles industry, currently estimated at around US $108 billion, is expected to reach US $ 141 billion by 2021.[footnoteRef:5] The current industry size comprises domestic market of US$ 68 billion and exports of US$ 40 billion. The domestic textile and apparel industry in India is estimated to reach USD 100 Billion by 2016-17 from USD 68 Billion in 2013-14. The yearly growth in the size of industry over past few years is shown in the below Table 1. As per index of Industrial Production (IIP), textiles industry registered a growth of 6.8% in March, 2015 over 2014 and wearing apparel, dressing and drying of fur shown a growth of 9.0% during same period. During April-March 2014-15, textiles registered growth of 2.6% while wearing apparel, dressing and drying of fur had shown a negative growth of 5.4%. [5: http://www.makeinindia.com/sector/textiles-garments/]

Table 1: Yearly growth rate in size of Textile and Clothing Industry

YearGrowth rate (%)

2008-09-5.7

2009-104.8

2010-115.8

2011-12-3.6

2012-137.3

2013-1411.0

Feb, 2014-157.0

Source: http://www.ibef.org/industry/textiles.aspx

The Indian textiles industry is extremely varied, with the hand-spun and handwoven sector at one end of the spectrum, and the capital intensive sophisticated mill sector at the other. The textile industry has two broad segments, namely handloom, handicrafts, sericulture, power looms in the unorganized sector and spinning, apparel, garmenting, made ups in the organized sector. The decentralized power looms/ hosiery and knitting sector form the largest section of the Textiles Sector. The major sub-sectors that comprise the textiles sector include the organized Cotton/Man-Made Fibre Textiles Mill Industry, the Man-Made Fibre/Filament Yarn Industry, the Wool and Woollen Textiles Industry, the Sericulture and Silk Textiles Industry, Handlooms, Handicrafts, the Jute and Jute Textiles Industry, and Textiles Exports. India is the world's second-largest producer of textiles and garments. The Indian textile industry accounts for about 22% of the world's spindle capacity and 8% of global rotor capacity.[footnoteRef:6] [6: http://www.ibef.org/industry/textiles.aspx]

TheMinistry of Textilesis responsible for the formulation of policy, planning, development, export promotion and regulation of thetextile industry in India. This includes all natural, artificial, and cellulosic fibers that go into the making of textiles, clothing and Handicrafts. Many public sector undertakings were established to develop the markets for textiles in India and abroad like National Textile Corporation Ltd. (NTC), British India Corporation Ltd. (BIC), Cotton Corporation of India Ltd. (CCI), Jute Corporation of India (JCI), Handicrafts and Handlooms Export Corporation (HHEC), Central Cottage Industries Corporation (CCIC), National Handloom Development Corporation Ltd. Apart from this, some statutory bodies are also set up serving the same purpose like Jute Manufacturers Development Council, Central Silk Board and Textile Committee. In addition to this, some export councils such as Handloom Export Promotion Council (HEPC), Apparel Export Promotion Council (AEPC), Cotton Textile Export Promotion Council (TEXPROCIL), The Synthetic and Rayon Textile Export Promotion Council (SRTEPC), Indian Silk Export Promotion Council (ISEPC), Wool & Woolen Export Promotion Council (WWEPC), Carpet Export Promotion Council (CEPC), Export Promotion Council for Handicrafts (EPCH), Powerloom Development & Export Promotion Council (PDEXCIL), Wool Industry Export Promotion Council work in globalization of Indian textile and clothing industry. Due to policy measures taken by the Government in the recent past, the Indian textile and clothing industry is in a stronger position than it was in the last six decades. The industry which was growing at 3-4% CAGR during last six decades has now accelerated to an annual growth rate of 8-9% in value terms. 100% FDI is allowed under the automatic route in the textile sector investment being subjected to all applicable regulations and laws.This report deals with analysis of textile and clothing industry in India and in the context of current trends in the global textile and clothing industry, Indias competitive position in the world, current status of Indias trade in this sector, its position in the key markets and recent developments with challenges, opportunities and strategies for furthering the growth and development of textile and clothing industry in India.