Export Market of Apparel in India - Know the Size - Trends - Government Initiatievs

People worldwide like clothes made in India because they are made with great care and skill. India is famous for making clothes from materials like cotton, silk, and denim, which are loved worldwide.

In India, a lot of cotton is grown, more than anywhere else in the world. The textile and clothing industry in India is huge and has many different parts. Some parts make clothes in traditional ways using handlooms and handicrafts, while others use modern machines.

The clothing industry in India keeps getting bigger. In 2022, it was worth about US$ 172.3 billion, and by 2028, it's expected to be worth about US$ 387.3 billion! This industry is really important for India's economy. It helps make about 2% of the money India makes (its GDP), which is about US$ 70 billion.

Lots of people work in the clothing industry in India, making it the second biggest employer after farming. About 45 million people have jobs directly making clothes, and about 100 million people work in jobs related to making clothes.

In India, some states are especially good at making clothes. These include Andhra Pradesh, Telangana, Haryana, Jharkhand, and Gujarat. They make a lot of the clothes that India sells around the world.

India's Textile and Apparel Exports

Global Position: India is the fifth largest exporter of textiles and clothes in the world.
Export Share: Textiles and apparel make up 8.0% of India's total exports, contributing to 5% of global trade in this sector.
Record-breaking Exports: Despite challenges with logistics, India achieved its highest-ever exports of textiles and apparel, including handicrafts, reaching US$ 35.58 billion in the fiscal year 2022-23.
Export Trends: In July 2023, textile exports were worth US$ 1.66 billion, slightly lower than July 2022. Apparel exports also declined from US$ 1.38 billion in July 2022 to US$ 1.14 billion in July 2023.
Ready-made Garments (RMG): RMG exports in FY23 reached US$ 16.19 billion, showing a 1.1% growth compared to the previous year.

Product Category Analysis

Declines and Growth: Cotton textiles saw a decline of -28.45%, while man-made textiles declined by -11.86%. Ready-made garments (RMG) experienced a modest growth of 1.10%, while handicrafts declined by -19.13%.
Cotton Fabrics and Madeups: Exports of cotton fabrics and madeups totaled US$ 2.75 billion during April-August 2023.

Government's Targets

Vision: The Narendra Modi government aims to achieve US$ 250 billion in textiles production and US$ 100 billion in exports by 2030.
Strategic Discussions: Mr. Piyush Goyal, Union Minister for Textiles, Consumer Affairs, Food and Public Distribution, and Commerce and Industry, discussed the roadmap to achieve these targets at the Chintan Shivir organized by the Ministry of Textiles.

Global Reach of Indian Textile and Apparel Exports

Export Diversity: India's textile and apparel products, including handlooms and handicrafts, reach over 100 countries worldwide.
Key Export Destinations: Major export destinations for Indian textiles and apparel include the USA, Bangladesh, UK, UAE, and Germany.
Dominance of the USA: The USA stands out as the largest importer of Indian textile and apparel products, accounting for approximately one-fourth of India's total exports.

Export Trends and Agreements

USA as Top Destination: In 2022-23, the USA remained the primary export market for Indian textiles and apparel, representing 29% of total exports, up from 24% in 2019-20.
Free Trade Agreement (FTA) with UAE: India and UAE implemented a Free Trade Agreement (FTA) on May 1, 2022, aimed at enhancing trade relations and potentially boosting textile and apparel exports.
Negotiating FTAs: India is in the process of negotiating FTAs with various countries and regions, including the EU, Australia, UK, Canada, Israel, among others. These agreements could provide India a competitive advantage in the global market.
Foreign Direct Investment (FDI) Policy: India's FDI policy allows 100% FDI in single-brand product retail trading and up to 51% FDI in multi-brand retail trading, attracting international retailers to source garments and home textiles from India.

Source : Brand Equity

Impact and Future Prospects

Attracting International Retailers: India's FDI policy attracts leading international retailers to source products from India, fostering interest from new export destinations.
Potential Growth: With ongoing trade agreements and favorable FDI policies, Indian textile and apparel exports are poised for growth and expansion into new markets globally.

Government Regulatory Body -AEPC

The Apparel Export Promotion Council (AEPC) was established in 1978 as the official body representing apparel exporters in India. Since its inception, AEPC has played a pivotal role in promoting and advancing the interests of the Indian apparel industry on the global stage.

Mission of AEPC

AEPC's mission is to promote, advance, increase, and develop the export of all types of ready-made garments manufactured in India. Through its initiatives and support mechanisms, AEPC aims to foster the growth and competitiveness of the Indian apparel sector while facilitating sustainable development and prosperity for all stakeholders.

Vision of AEPC

AEPC envisions a vibrant and globally competitive Indian apparel industry that is recognized for its quality, innovation, and reliability. The council strives to position India as a leading hub for garment manufacturing and exports, contributing significantly to the country's economic growth and global trade relations.

Functions of AEPC

Policy Advocacy: AEPC serves as a proactive advocate for the apparel industry, providing research, insights, and inputs on policy matters such as Free Trade Agreements (FTA), Foreign Trade Policy (FTP), and bilateral agreements. It works closely with government bodies to shape policies that facilitate trade and enhance export opportunities for Indian garment manufacturers.
Promotion and Marketing: AEPC undertakes various promotional activities and marketing campaigns to showcase the capabilities and strengths of the Indian apparel industry to international buyers and stakeholders. It organizes trade shows, exhibitions, and buyer-seller meets to facilitate business interactions and promote Indian garment exports.
Skill Development and Training: AEPC is committed to enhancing the skill and capabilities of individuals working in the apparel sector. It provides training programs, workshops, and capacity-building initiatives aimed at improving technical know-how, productivity, and efficiency across the industry value chain.
Market Intelligence and Research: AEPC conducts market research and analysis to identify emerging trends, consumer preferences, and market opportunities in key export destinations. It disseminates relevant information and insights to industry stakeholders, enabling them to make informed decisions and adapt to changing market dynamics effectively.
Trade Facilitation: AEPC facilitates trade transactions and resolves trade-related issues faced by exporters through its dedicated support services. It offers guidance on export procedures, documentation requirements, customs regulations, and trade finance options, thereby streamlining the export process and reducing transactional barriers.

Government schemes For the textile Industry:

The Indian government has introduced various schemes to boost the textile industry:

ATUFS: Supports technology upgrades for enhanced competitiveness.
AA Scheme: Facilitates duty-free import of raw materials for exporters.
PLI Scheme: Incentivizes production of technical textiles for domestic and export markets.
PM MITRA Parks: Establishes textile manufacturing hubs with modern infrastructure.
TCDS: Promotes development and modernization of textile clusters.
RoSCTL Scheme: Provides tax rebates to enhance export competitiveness.
Removal of ADD: Eliminates anti-dumping duties on key textile inputs to stimulate exports.

These initiatives foster growth, modernization, and competitiveness in the textile sector, contributing to India's economic development and trade expansion.

In conclusion, the Indian government has made significant strides in bolstering the export potential of the apparel industry. Through targeted initiatives and strategic reforms, India is actively fostering an environment conducive to the growth and global competitiveness of its apparel exports. Measures such as the removal of anti-dumping duties and the implementation of export-friendly policies underscore the government's commitment to facilitating a robust export ecosystem. These efforts are pivotal in propelling India's apparel exports onto the global stage, contributing substantially to economic prosperity and trade expansion endeavours.

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