The textile and apparel (T&A) sector remains central to India's economy, contributing significantly to the Gross Domestic Product (2.3%), industrial production (13%), and exports (12%). It directly employs around 45 million people, providing livelihoods across rural and urban areas, and creates jobs for unskilled, semi-skilled, and female workers.
However, despite this potential, India's T&A sector accounted for only 4.8% of global exports in 2023. The country's strength lies in its raw materials, particularly cotton, where it holds 14% of global exports.
As it prepares for the future, India’s T&A industry will need to penetrate the growing Man-Made Fibre (MMF) segment, which now accounts for approximately half of global apparel trade and will continue to grow. The global apparel industry is extremely competitive and characterised by low margins. Buyers frequently switch suppliers to secure better prices, creating a high-pressure environment for manufacturers.
This dynamic is particularly challenging for Indian firms, most of which are relatively small compared to their counterparts in Bangladesh and Vietnam, where firms tend to be larger and more consolidated. India in general finds it difficult to compete on costs with these countries, which then drives a need to develop competitive advantages based on other factors, such as quality, innovation, or sustainability. Market access further handicaps Indian exporters.
Bangladesh, for instance, enjoys preferential trade agreeme.
