Thread by @alphaspotcap

Indian Textile Industry :
It’s Looking Good!

Here’s an analysis of what’s happening in this sector.

A thread 🧵🧵🧵👇🏻

#investing #Textile
@caniravkaria

1) About the sector:

a. The Indian textile industry is the second largest producer of man-made fibre(MMF) after China.

b. The textiles and apparel (T&A) industry contribute 2.3% to the country’s GDP, 12% to exports.

c. It is the second largest employment generating sector in the country after Agriculture.

d. It provides direct employment to more than 4.5Cr people and over 10Cr people indirectly.

e. Indian readymade garments (RMG) industry is the largest segment of the Indian T&A sector.

2) Let’s look at the fastest growing sector in the textile industry : Technical Textile

They are defined as textile materials and products used primarily for their technical performance and functional properties rather than their aesthetic or decorative characteristics.

There are 12 Segments in Technical Textiles, their import export performance is given below:

The bottlenecks:

a.Impact of COVID-19

b. High tariffs faced by Indian exporters in key markets, such as the European Union, compared with zero duty access given to competing nations like Bangladesh, Sri Lanka, Pakistan, and Turkey.

c. Logistics is one of the major constraints with Indian exporters. For comparative purposes, the turnaround time (TAT) (from order to delivery) is 50 days for Bangladesh and 63 days for India, whereas the time taken to reach port is one day for Bangladesh and 7-10 days for India

Turnaround in Technical Textiles:

a. India has transitioned from being a net importer of technical textiles ( by Rs 1,058 crore) in FY20 to a net exporter of the same (by Rs 2,998 crore) in FY21.
says the report.

b. To increase the export of technical textiles to 5x in 3yrs

c. The govt approved the proposal for the creation of National Technical Textiles Mission (NTTM) for a period of 4 years (2020-21 to 2023-24) with an outlay of Rs 1,480 crore.

d. Indian technical textiles could grow at 7.6% to reach $23.3 bn in 2027, up from $14 bn now.

Key Drivers:

1) Rising demand for the textile exports.

2) Rising FDI Into the Indian Textiles Sector

3) Growing middle class population driving demand for textiles

4) Rising demand for casual wear amid the COVID-19 pandemic

5) Increasing demand for cotton yarn and fabric

Government Schemes:

a. Scheme for Integrated Textile Parks (SITP)

b. Mega Integrated Textile Region and Apparel (MITRA) Park

c. Rebate of State and Central Taxes and Levies (RoSCTL) scheme

d. Scheme for Capacity Building in Textile Sector (Samarth)

OPPORTUNITIES FOR THE TEXTILES SECTOR VIA THE PLI SCHEME

a. Man-made and Technical textiles account for 2/3rd % of all international trade. In line with this, the govt approved the PLI scheme to improve India’s share to the global trade of fabrics and garments made from MMF.

b. India's MMF garment industry is positioned for rapid expansion in the coming years owing to the ease of doing business reforms and increased investor confidence.

CONCLUSION

a. The Indian govt aims to boost the domestic production of the textiles sector to $250bn and increase exports to $100bn at the earliest.

b. The Govt announced talks with several countries to expedite FTAs /PTAs and establish a loyal customer base

Key players in the Indian texles industry are actively focusing on leveraging the PLI scheme for numerous opportunies.
Eg. Indo Rama Synthecs (India) Ltd., a leading textile players, is expected to establish an additional capacity unit to leverage benefits under the PLI scheme

The PLI scheme is expected to boost competitiveness for large as well as medium and small suppliers across the value chain.
The scheme is here to augment India’s manufacturing capabilities, contributing to the exports, boosting our position to become a leading textile exporter.

Happy Reading! 🙂