Textiles including Readymade Garments Presentation by:
Role of T&C Industry in Indian Economy• Textile and Clothing (T&C) Industry constitutes 4% of India’s GDP, 14% of Industrial Production and 14% of total exports of goods.• Second largest employer after agriculture : Provides direct employment to over 35 Million people and indirect employment to 45 Million.• T&C sales generated US $ 55 Billion in 2008-09: US $ 33.4billion from domestic market and US $ 21.6 billionfrom exports. 2
Strong Fundamentals• Strong and diverse raw material base• Globally competitive spinning industry• Strong presence in textile value chain from raw material tofinished goods• Unique blend of tradition and technology• Flexible production system and strong entrepreneurial skills• Diverse design base 3
Fibre Production % Share Strong and Diverse Raw Fibres Production in Rank Category during 2008Material Base - worldThe largest producer of Jute Jute (Jute, Kenaf 1.7 and allied 56% 1 Billion Kgs2nd largest producer of Cotton fibres)2nd largest for Silk Cotton 5.0 22% 2 Billion Kgs (china-30%)2nd position for Cellulosic 17 2fiber/yarn Silk 13% (china-82%) Million Kgs 4th largest producer of Cellulosic 0.33 2synthetic fiber /filaments 12% Fibre/Yarns Billion Kgs (china-45%) Synthetic 2.4 4 6% Fibres/Yarns Billion Kgs (china-48%) Bracket figures are % share in the world by first rank country Source: CITI estimates 4
In Bracket first rank country Source: TMF report 2008
Readymade garments accounts for half oftextile exports India is projected to secure a 7% share in global textile trade. India’s total textile exports for 2008-09 stood at ` 963 bn, up more than 11% as compared to the textile exports of 2006-07. During the same period, export of readymade garments grew more than 25% to ` 471 bn. Exports of cotton textiles — including yarn, fabric and made-ups – account for more than 22.6% of total textile exports.
Basic facts: Indian textiles and clothing (T&C) exports• India’s share in global T&C trade: 4% in textiles and 2.8% in clothing• India’s rank in world trade: 7th in textiles and 6th in clothing• Share in the country’s total exports basket: 12%• Readymade garments share: nearly 50% of total textile exports• India’s textiles products are exported to over 100 countries• Two-third of India’s textiles are exported to the US and EU• Other major export destinations include Canada, UAE, Japan, Saudi Arabia, Republic of Korea, Bangladesh and Turkey.
International Demand Drivers•Dismantling of quotas•Increase in sourcing of textiles by developed marketsfrom developing countries.• Apparel spending remains significant in life styleproducts category in developed world. 10
Global Projections (2015) Textile Trade Textile Trade US$ 240 US$ 338 Billion (40%) Billion (35%) Total Global Total Global Textile and Textile andClothing Trade Clothing Trade US$ 590 Apparel Trade Apparel Trade US$ 938 Billion US$ 350 US$ 600 Billion Billion (60%) Billion (65%) 12
Emerging Challenges• Competition in Domestic Market With market opening and FTAs, industry to face competition from increased imports.• Regional Alliances Trade Blocs play a significant role in global trade. Concessional tariffs to make global trade unequal• Ecological and Social Issues Compliance problems to intensify 13
Global Trade in Textile and Clothing World trade in textiles and clothing amounted to US $ 385 billion in 2003, of which textiles accounted for 43 percent (US $ 169 bn) and the remaining 57 percent (US $ 226 bn) for clothing. Developed countries accounted for little over one-third of world exports in textiles and clothing. The shares of developed countries in textiles and clothing trade were estimated to be 47 percent (US $ 79 bn) and 29 percent, (US $ 61 bn) respectively.
Import Trends in USA MFA countries contributed as much as 87 percent (US $ 29.3 bn) of total US textile and clothing imports. whereas Caribbean Basin Initiative (CBI), North American Free Trade Area (NAFTA), Africa Growth and Opportunity Act (AGOA) and ANDEAN countries together contributed 13 percent (US $ 4.4 bn). The composition of imports of clothing and textiles by USA in 2003 was 80 percent (US $ 71 bn) and 20 percent (US $ 18 bn), respectively. In most of the quota products imported by USA, India was one of the leading suppliers of readymade garments in USA
Import Trends in EU . Intra-EU trade accounted for about 40 percent (US $ 40 bn) of total clothing imports and 62 percent (US $ 32.5 bn) of total textile imports by EU. Asia dominates EU market in both clothing and textiles, with 30 percent (US $ 30 bn) and 17 percent (US $ 8 bn) share, respectively. Central and East European countries hold a market share of 11 percent (US $ 11.3 bn) in clothing and 7.5 percent (US $ 4 bn) in textiles imports of EU. In the EU market also, India is a leading supplier for many of the textile products.
Import Trends in Canada Amongst the leading suppliers of textiles and clothing to Canada, USA had the highest share of over 31 percent (US $ 8.4 bn), followed by China (21% - US $ 1.8 bn) and EU (8% - US $ 0.6 bn). India was ranked at fourth position and was ahead of other exporters like Mexico, Bangladesh and Turkey, with a market share of 5.2 percent (US $ 0.45 bn).
Potential Gains Estimated Gains in USA and EU For China and India (US $ Billion) Textiles Clothing TotalMarkets Present Future Present Future (2014) 2014 (2003) (2014) (2003)Gains in Chin China India India China India China India China India aUSA 3.6 1.5 13.0 5.0 12.0 2.3 67 13 80 18 (20) (8.4) (32) (13.5) (16.9) (3.2) (42) (8) (40) (9)EU 2.8 1.9 12 8 12.3 3.0 60 16 72 24 (5.3) (3.2) (12) (8) (12.2) (3.0) (30) (8) (24) (8)
Textiles and Garments Exports from India The share of textiles and garments exports in India’s total exports in the year 2003-04 stood at about 20 percent, amounting to US $ 12.5 billion. The quota countries, USA, EU and Canada accounted for nearly 70 percent of India’s garments exports and 44 percent of India’s textile exports. Amongst non-quota countries, UAE is the largest market for Indian textiles and garments; UAE accounted for 7 percent of India’s total textile exports and 10 percent of India’s garments exports.
Continued.. In terms of products, cotton yarn, fabrics and made-ups are the leading export items in the textile category. In the clothing category, the major item of exports was cotton readymade garments and accessories.