Sustainable Textiles & Sectoral Diversification: Way Forward for Indian Exporters

India’s cotton textile exports witnessed a 54% YoY growth in FY 22, surpassing the RMG segment. This helped India’s textile exports reach US$ 43.44 billion, recording a 41% YoY growth in the same year. This is attributed to a high pent-up demand worldwide post-COVID and the easing of the supply chain crisis, apart from other factors.

Pushkar Mukewar, Founder & CEO, Drip Capital highlights key strategies for textile exporters to incorporate these emerging trends and opportunities.


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India is the sixth largest exporter of textiles and apparel in the world, but with a mere 4% share of the global market as against China’s massive 30%. Till FY 2021, India’s export basket primarily constituted ready-made garments (RMG) followed by cotton and man-made textiles. However, in FY 2022, cotton textile exports witnessed a 54% YoY growth, surpassing the RMG segment. This helped India’s textile exports reach US$ 43.44 billion, recording a 41% YoY growth in the same year.

Drip Capital’s analysis pegs this rise to a high pent-up demand worldwide post-COVID and the easing of the supply chain crisis. Other factors contributing to the increase could be a push from several government schemes and India’s strategic advantage in terms of abundant raw materials, low labour costs, etc.

Although textiles are currently in low demand, with consumers cutting down on discretionary spending, exporters can incorporate these emerging trends and opportunities in their long-term business strategies.

Capturing China’s declining market share

China’s share in the global apparel export market decreased from 35.15% in 2016 to 29.91% in H1 2021 and is expected to decline further. With manufacturing becoming costlier in China and businesses looking for alternate sourcing hubs to reduce dependency on China, new manufacturing units might crop up across India, opening doors for textile exporters.

Bangladesh and Vietnam have been quick to capitalize on this trend as they have duty-free access to major export markets like the EU, UK, and Canada. India must pick up the pace of closing deals with significant trading partners and create attractive government incentives/sops for companies wanting to shift their supply chains to India. This will help India become a global manufacturing and export hub, providing export businesses with many untapped opportunities and access to newer markets.

Sustainable textiles trend

Lately, there has been an increasing focus on sustainability, especially in Europe, where brands and end-consumers are more conscious about the environment. Adopting eco-friendly practices, using non-hazardous chemicals/dyes, leveraging green modes of shipping, focusing on recycling, and using renewable materials, are some measures businesses can consider to retain their hold in vital markets. Highlighting this sustainability factor to international buyers can help exporters position themselves differently from the competition and gain customers’ goodwill in the long run.

FTAs to boost Indian textiles

Textile is a sector where margins are significant to become competitive. Hence, the recently signed FTAs with Australia and UAE are even more crucial as they would give Indian textiles duty-free access to their markets. Moreover, for India, UAE is a gateway to the entire African continent, many gulf nations, and Europe. Given its vast Indian diaspora, these hubs could be a massive market for the MSME-dominated textile sector.

As India eyes achieving $100Bn in textiles exports by 2030, the government hopes the two FTAs will give a much-needed boost to man-made fibre exports, which currently have a limited presence in exports, thus providing opportunities for diversification.

Schemes in favour of the industry

The textile industry has been blessed with several promising schemes, with the policy tank constantly innovating and working to improve the sector. For instance, the government has extended the well-received Rebate of State and Central Taxes and Levies (RoSCTL) scheme to March 2024 to boost the export competitiveness of Indian apparel and made-ups. Besides this, it has approved a PLI scheme to promote the production of man-made fibre (MMF) apparel, MMF fabrics, and technical textiles products.

Moreover, the plan to develop seven mega textile parks under the PM-MITRA scheme aims to integrate the textile value chain. This is a step in the right direction to attract investments, R&D, and employment. For export promotion, the Market Access Initiative scheme provides financial aid to trade bodies/export promotion councils to set up exhibitions, trade fairs, etc., to help exporters connect with buyers and showcase their products on global platforms.

The article is authored by Pushkar Mukewar, CEO/Co-Founder of Drip Capital.

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