What caused the slump in the Indian textile sector in the last two financial years?
A slowdown in global and domestic demand for textiles.
International tensions and disruptions affected exports.
Increased prices for cotton and man-made fibers (MMF).
A 10% import duty on cotton made Indian cotton less competitive.
What is the status now?
The Indian textile industry was valued at $153 billion in 2021.
Despite being the third-largest exporter in FY22, exports have declined in subsequent years.
Many textile mills, especially in Tamil Nadu, have closed due to reduced demand, leading to significant job losses.
Why did exports slump?
A reduction in demand from key buying countries.
Increased costs of cotton and MMF impacted profitability.
Growing imports of fabrics and garments added to competition.
The import duty on cotton and disruptions from quality control orders on MMF affected material availability and costs.
What are the challenges?
Shift towards e-commerce and direct retailing affecting traditional sales channels.
Global brands are prioritizing sustainability, requiring vendors to adapt.
Increased demand for comfort wear and loungewear reshaping the market.
Shift in shopping preferences, especially in rural and semi-urban areas, with consumers favoring well-known brands.
What is the way forward?
The industry aims for a $100 billion investment to boost production by 2030.
Emphasis on adopting new technologies and improving worker skills to enhance productivity.
Advocating for policies that support lower raw material costs and sustainable practices.
Adjusting to new consumer trends and preferences for efficient sales channels.
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