Indian Textile Industry Faces Modernization Hurdles Despite Growth Potential: CRISIL

ENA Sectors 2024-11-21 15:42:26 New Delhi, Nov 21 (KNN) The Indian textile industry, a critical pillar of the countrys economy driven predominantly by micro, small, and medium enterprises (MSMEs), is grappling with structural challenges that hinder modernisation and growth, according to Crisil Ratings' latest India Progress report. The fragmented nature of the industry limits MSMEs ability to diversify into new product categories, impacting competitiveness. Crisil highlights significant constraints, including limited funding, outdated technology, and low innovation, which result in inefficiencies and restricted productivity. Labour issues compound these problems, with poor awareness of rights leading to challenging working conditions. Furthermore, the absence of robust infrastructure—such as efficient transport networks, ecommerce facilities, certification centers, and stable power supply—poses significant hurdles for smaller players. Government initiatives like the PM MITRA Parks scheme aim to address these gaps by providing plug-and-play infrastructure and bridging knowledge deficits to enable MSMEs to compete globally. Despite these challenges, the Indian textile industry is poised for growth. Domestic demand is expected to rise, driven by an expanding middle class, increased discretionary spending, and growing consumer interest in workwear and athleisure. On the global front, the market, valued at USD 165 billion in 2022, is projected to grow to USD 350 billion by 2030. Exports, which reached USD 44 billion in fiscal 2022, are targeted to hit USD 100 billion by 2030, supported by government efforts to improve competitiveness and market penetration. India remains a leading player in cotton production and yarn exports but lags in high-value segments like ready-made garments (RMG), where its global market share is just 3 per cent. Competitors such as Bangladesh and Vietnam, with better trade agreements and cost advantages, have outpaced India in exports. The report emphasises the urgency for India to secure free trade agreements (FTAs) with key markets and pivot toward synthetic fibres, which account for 60 per cent of global textile consumption. Encouragingly, the FTA with Australia has doubled Indias RMG exports to that market. To achieve its ambitious export goals and global competitiveness, India must modernise its textile sector, expand its synthetic fibre footprint, and enhance labour conditions while leveraging government initiatives to boost infrastructure and innovation. These steps are crucial for capitalising on opportunities in the evolving global textile landscape. (KNN Bureau) 39987 https://knnindia.co.in/news/newsdetails/sectors/indian-textile-industry-faces-modernization-hurdles-despite-growth-potential-crisil 2024-11-21 15:42:26 knnindia.co.in Indian Textile Industry Faces Modernization Hurdles Despite Growth Potential: CRISIL