India’s Textile Sector: Aiming for $100 Billion in Exports by 2030

The textile industry is a crucial part of India’s economic growth, contributing significantly to employment, value addition, and export earnings. With 45 million people working in this sector, it stands as one of India’s largest employers. Traditional areas such as handlooms, handicrafts, and power looms are significant in rural and semi-urban employment, while SMEs play a major role in providing livelihoods, particularly for women.

Export Ambitions: $100 Billion Target

India aims to increase its textile exports to $100 billion by 2030, a steep rise from $44 billion in fiscal 2022. To achieve this, India must enhance its competitiveness against dominant textile exporters like China and Bangladesh. The country’s value chain spans cotton production to finished goods like ready-made garments (RMG) and home furnishings.

As per the CRISIL report, India contributes 23% to the global output of cotton production. It also contributes significantly to cotton yarn exports, being the largest exporter worldwide and the third-largest exporter of polyester yarn. The market size of the cotton yarn and ready-made garment industry is estimated to have crossed ₹6,000 billion in FY 2024.

However, India lags in weaving, knitting, and processing, where competition from China is strong. The country’s share in global RMG trade is only 3%, far behind other countries like Bangladesh and Vietnam, which have gained ground due to factors like lower costs and better technology.

Government Support: Initiatives and Trade Pacts

To boost exports, India has implemented several initiatives such as the PM MITRA Parks and Production Linked Incentive (PLI) schemes, aimed at modernising infrastructure and encouraging investments in the textile sector. Additionally, trade pacts, particularly with Australia, have proven beneficial by enhancing competitiveness and increasing exports. The duty drawback and RoDTEP schemes, along with labour reforms, also help strengthen India’s textile exports.

Strategic Focus Areas to Boost Exports

India’s export success depends on several key factors, including:

1. Trade Pacts: FTA agreements with countries like Australia offer better market access.
2. Infrastructure Support: Development of specialised textile parks and improved logistics.
3. Diversification: A shift toward technical textiles, catering to industries like automotive, healthcare, and agriculture, could open up new growth avenues.
4. SME Support: Small enterprises need better access to funding, technology, and modern practices to remain competitive.

A growing global demand for sustainable products and a renewed interest in traditional Indian textiles could further enhance India’s export prospects. Luxury and slow fashion sectors are recognizing Indian textiles for their unique designs and cultural value, which could help India move closer to its $100 billion export target.

Prospects and Challenges

The textile sector has significant potential, with India poised to retain its leadership in cotton yarn production. However, challenges such as high tariffs in key markets, reliance on cotton textiles, and competition from low-cost producers persist. Addressing these challenges, including improving labour conditions and modernising MSMEs, will be key to sustaining growth in both domestic and international markets.

India’s textile industry holds immense potential, backed by a strong cotton supply, government support, and opportunities in sustainable and technical textiles. Overcoming challenges related to competitiveness and trade agreements will be essential for achieving the $100 billion export target by 2030.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.