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The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country. Currently, it contributes about 14 per cent to industrial production, 4 per cent to the GDP, and 13.50 per cent to the country's export earnings. It provides direct employment to over 35 million people, which includes a substantial number of SC/ST, and women. The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.

Due to policy measures initiated by the Government in the recent past, the Indian textiles industry is in a stronger position than it was in the last six decades. The industry which was growing at 3-4 percent during the last six decades has now accelerated to an annual growth rate of 8-9 percent in value terms. The catalyst for this exponential growth is a buoyant domestic economy, substantial increase in cotton production, a conducive policy environment provided by the Government, and the end of the Multi Fibre Arrangement (MFA), on December 31, 2004. The rationalization of fiscal duties undertaken during the last few years, has also provided a level playing field in all segments of the industry, resulting in the holistic growth of the industry. A strong foundation for industry has been laid on which world class manufacturing units can realize their full potential and make a mark in the international economy.

The growth manifests through a consistent increase in production of fabric and investments. During 2008-09, the production of fabric was 55 billion sq meters, as compared to 45.38 billion sq meters in 2004-05. The textiles sector has witnessed a spurt in investment during the last five years, increasing from Rs.7,349 crore in 2004-05 to Rs.15,032 crore in 2005-06 to Rs.66, 233 crore in 2006-07, to Rs.19,917 crore in 2007-08 and Rs.42,807 crore in 2008-09. It is expected that investments will touch Rs.1,50,600 crore by 2012. This enhanced investment will generate 17.37 million jobs (comprising 12.02 million direct and 5.35 million indirect jobs) by 2012.


The Indian textiles and clothing industry is the cornerstone of the national economy and it contributes 13.50% to the country's merchandise exports. After the coming to end of Multi Fibre Arrangement (MFA), the industry started scaling up, improving efficiencies and modernizing technologies. Within one year of the MFA regime coming to a close on December 31, 2004, Indian exports grew at a rate of 22%. The exports of textiles and clothing during 2004-5, 2005-06 and 2006-07 were US$ 14 billion, US$ 17.52 billion and US$ 18.73 billion respectively. India's textiles and clothing export has observed ups and downs in recent times, initially due to appreciation of Indian Rupee in 2007-08 and subsequently on account of global meltdown. During 2007-08, textiles exports from India were US$ 22.13 billion against the target of US$ 25.06 billion. In 2008-09, textiles exports have reached US$ 18.51 billion (April-February of financial year 2008-09) against US$ 19.55 billion in the corresponding period of 2007-08.

Apparel & Clothing

The Clothing sector is an export intensive sub-sector and contributes about 40-45% to total textiles exports. It is a low investment and highly labour intensive industry: an investment of Rs.1.00 lakh in the sub-sector creates 6-8 jobs.

The growth of the garment industry had been hamstrung by the reservation of garment manufacture for the small-scale industry. As a result, garment units could neither attain optimal economies of scale, nor produce international quality garments.

Keeping in view the changed situation, the Government de-reserved the woven apparel sector in 2002-03, and the knit-wear sector in 2005-06. The industry picked up momentum during the Xth Five Year Plan. It initially grew at 15-16 per cent and, during 2005-06, the growth increased to about 20-22 per cent. The catalyst for this accelerated growth rate was the end of the quota regime in the international market, growth in organized retailing, growing consumerism in the domestic market, and a favourable policy regime.

During the Xth Five Year Plan, exports of readymade garments increased at the annualised rate of growth of 13.72%. Major change was witnessed in 2005-06 when it increased by 28 percent. The investment requirement of this sub-sector by 2012 will be Rs.21.800.00 crores, and will create incremental employment for a 56.40 lakh workforce, of which 28.25 lakh will be semi-skilled, and 11.30 lakh un-skilled. Seeing employment and export potential in apparel and clothing sub-sector, the Government will give priority to ensure its development and expansion. Efforts will be made to reform rigid labour Laws, and Brand promotion through the Public Private Partnership route. Fashion hubs will be set-up to provide Common Data, and marketing outlets to the industry.

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Source: National Portal Content Management Team, Reviewed on: 11-01-2011