Celebrating Independence Day 2024: The Evolution of India’s Textile Industry from Handlooms to Global Powerhouse

The Indian textile industry is an important segment of Indian industry and reflects the country’s diverse socio-economic and cultural heritage. The industry has a rich history that is more than 5,000 years old. The industry has undergone significant developments, starting from its modest beginnings as handlooms in villages to large-scale modern-day textile mills.

Historical Transformation

Since India got independence in 1947, the textile sector has evolved remarkably. Initially, the industry focused on traditional handlooms and weaving practices. The textile sector in India faced challenges due to outdated technology and limited capital, which hindered its growth. However, the 1980s and 1990s marked a turning point with the introduction of modernisation initiatives and liberalisation policies. The government implemented the Technology Upgradation Fund Scheme (TUFS) and encouraged foreign investments, which led to an influx of modern machinery and global best practices.

By the early 2000s, the textile industry in India began to gain momentum, driven by demand in the domestic market and rising exports. In 2016-17, India accounted for 95% of the world’s handloom fabric exports. As of 2023, the sector was a crucial part of the economy, contributing approximately 2.3% to GDP and 13% to export earnings. In FY24, textile and apparel exports, including accessories, reached US$ 14.23 billion. During the same period (April-January 2024), India’s textile and apparel exports, including handicrafts, totalled US$ 28.72 billion.

Here’s a table to help you understand the textile trade in India.

Note: Imports include textile yarn fabric and made-up articles. Exports include readymade garments of all textiles, cotton yarn, fabrics, made-ups, handloom products, man-made yarn or fabrics, and handicrafts, excluding handmade carpets, carpets, and jute manufacturing, including floor coverings.

Government Support 

Government initiatives have been instrumental in revitalising the sector. The Production Linked Incentive (PLI) Scheme, with an allocation of ₹10,683 crore (US$ 1.44 billion), supports the man-made fibre and technical textiles segments. Additionally, the PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks Scheme was launched to develop robust textile infrastructure, inspired by the 5F vision: Farm to Fibre to Factory to Fashion to Foreign.

The Kasturi Cotton Bharat programme by the Ministry of Textiles is a pioneering branding, traceability, and certification initiative. This program, a collaboration between the Government of India, trade bodies, and industry, aims to promote India’s cotton production on the global stage.

Top Textile Sector Stocks

Even top companies also added their value to the sector’s growth. As of August 7, 2024, leading companies like KPR Mill Ltd, Trident Ltd, and Swan Energy Ltd have recorded impressive 5-year CAGR of 54.29%, 47.24%, and 44.54%, respectively, underscoring their significant contributions to the industry’s expansion.

KPR Mill Ltd has been contributing by promoting economic growth, sustainability, and community development through its 15 advanced manufacturing units. These facilities boast a production capacity of 1,00,000 MT of cotton yarn, 10,000 MT of viscose vortex yarn, 40,000 MT of fabrics, and 157 million ready-made knitted garments annually, positioning KPR Mill as one of India’s largest garment producers.

Future Outlook

The market for Indian textiles and apparel is projected to grow at a 10% CAGR, reaching US$ 350 billion by 2030, with exports anticipated to hit US$ 100 billion. In June 2022, Minister of Textiles, Commerce and Industry, Consumer Affairs & Food and Public Distribution, Mr Piyush Goyal, stated that the Indian government wants to establish 75 textile hubs in the country. The Indian textile industry aims to export products worth US$ 40 to $100 billion within 2027.

Conclusion

Since independence, India’s textile sector has evolved from traditional handlooms to a global industry powerhouse. With continued innovation, government support, and strategic investments, it is poised for even greater transformation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.