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India’s textile sector set for huge growth in next two years

India’s textile sector is likely to touch $250 billion in the next two years. Right now it is worth $150 billion. The textile and apparel sector is the second largest employment provider in the country and employed nearly 51 million people directly and 68 million people indirectly in 2015-16. The sector accounts for 10 per cent of the country’s manufacturing production, five per cent of its GDP and 13 per cent of export earnings.

However, demonetization and GST have hit smaller players hard. The number of workers affected due to closure of cotton and manmade fiber textile units (bigger units that comprise the non-SSI segment of the industry) during 2016-17 was 4,356 on account of the closure of 18 units.

During the previous two years, the numbers were 7,938 workers affected by the closure of 27 units in 2015-16 and 5,384 workers affected from the closure of 21 units in 2014- 15, taking the cumulative figure to over 17,600 workers impacted by the closure of 67 units in the last three years.

GST has hit small and medium players in textile hubs such as Surat, Bhiwadi and Ichalkaranji. Moreover capital goods firms are struggling as most of the downstream sectors are saddled with excess capacity and low demand.