The Indian textile and apparel sector, with $37 billion exports and $85 billion domestic consumption, is one of the largest employers in the country. Every $1 billion additional exports in apparel manufacturing can create 1.5 lakh new jobs. If we capitalise on the current China-plus-One opportunity, Indian exports will grow in double digits for the next several years, which in turn will create millions of jobs.
The Indian apparel sector needs scale, specialisation and competitiveness to capitalise on the emerging post-Covid opportunities in global trade.
Need for scale: Scale is important to bring down the cost of production, improve productivity levels to match global benchmarks and, thereby, cater to large orders from markets like the US. With right scale and technology interventions, India can match the manufacturing costs of competing countries.
Specialisation: India has built a strong ecosystem in cotton apparels, but is lagging in man-made fibre (MMF) apparel manufacturing. Global fashion is moving towards blends. The US annually imports around ₹3-lakh crore worth of MMF apparels. In this mega market, India has a share of just 2.5 per cent. PLI addresses this friction point.
Competitiveness: To compete with low-cost competitors, India needs to be ultra-efficient in pricing. With assured production incentives in the PLI scheme, entrepreneurs with growth aspirations will boldly invest in integrated smart factories. This can help achieve world-class productivity and manufacturing efficiency.
Attracting capital: Only 10 per cent of the Indian textile sector is in the listed space. The textile sector’s (excluding raw-material makers) market cap of around ₹2-lakh crore is hardly 1 per cent of the BSE’s ₹250-lakh crore market cap. Many textile companies in the SME space are not participating in the wealth creation story of the stock market.
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