India hopes to triple its textile and apparel exports by 2024-25. The country now has a five per cent market share globally and the target is to reach 15 per cent. The textile and apparel industry contributes 2.3 per cent to India’s GDP and accounts for 13 per cent of industrial production and 12 per cent of the country’s export earnings. It is the second largest employer in the country providing employment to 45 million people at present, and this number is expected to rise to 55 million people by the end of 2020. India is the largest producer of cotton and jute in the world, and the second largest producer of polyester, silk and fiber.
Indian exports are not competitive. Textiles from India are around ten per cent costlier than textiles from other countries. Also Bangladesh, Sri Lanka and Vietnam have low production costs and their exporters enjoy preferential duty access to key markets. In comparison Indian exporters face higher trade barriers in the US and the European Union. Bangladesh’s exports to the EU face zero per cent tariff and exports to the US face 3.9 per cent tariff. Indian textile exports face six per cent tariff in the EU and 6.2 per cent tariff in the US.