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India’s textile sector faces challenges

India’s share in the global apparel trade is unlikely to increase significantly over the long term. Structural challenges which constrain the industry need to be addressed.

The fragmented nature of the industry, low levels of modernisation, high costs of production and a limited presence in man-made fiber apparels are the main factors which have constrained the growth in India’s apparel exports.

The share of India in the global apparel trade is just four per cent despite the fact that India is one of the world’s largest cotton producers with the world’s second largest spinning and weaving capacity. Countries with benefits of economies of scale and abundant availability of cheap labor, such as China, Bangladesh and Vietnam, have been able to garner a larger share in global apparel exports over the last decade.

India is the world’s sixth largest apparel exporter after China, Bangladesh, Italy, Germany and Vietnam. Downstream sectors in the textile industry like weaving, processing and garmenting have not been able to derive benefits from the government’s Technology Upgradation Fund Scheme.

When it comes to yarn, most spinning mills are facing a working capital crunch since they have yet to get subsidies and incentives under the focus market scheme have been withdrawn.

 
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