In September 2014, India experienced “Make in India trade“, one of the most important “events” in the history of the industry. About 1,000 companies and delegates from about 60 countries participate in this week-long program. The aim of this campaign is to create jobs and improve skills in 25 financial sectors. To achieve this goal, 100% of FDI in these sectors has been declared.
The textile and clothing industry is one of 25 sectors with multi-year growth potential and also benefits from 100% foreign direct investment. India has the natural advantages of high cotton production and affordable labor and therefore has a long and rich textile history. However, due to frequent changes in tax policies and inappropriate customs structures, other ASEAN countries such as Bangladesh take precedence over India.
India’s textile and clothing industry accounts for about 59% of the global market share in this category. Moreover, India is the largest cotton producer and also ranks first in the world production of jute. After agriculture, the textile industry is the second largest source of employment, providing employment to skilled and unskilled workers in the country.
India, in particular, has the second largest textile production capacity in the world. This sector represents 13% of the country’s total export earnings. The approval of 100% FDI in this sector means that foreign investors can now freely invest in this sector. With similar policy changes, Indian companies can now also benefit from free trade agreements with many countries.
According to a report, the Indian textile industry is expected to reach $141 billion by 2021 and more than $500 billion over the next 10 years. Following the announcement of 100% FDI, several international producers have invested in the country.
This move has placed the Indian textile and clothing market at the forefront of “fashion news”. Another textile subsector that plays an important role in the development of this industry is hand weaving. Although several international brands are active in this craft sector, this hand-woven Indian heritage has not been fully exploited.
The “Make In India trade” plan also offers the opportunity to highlight original fabrics. Governments and top designers such as Anita Dongre, Ritu Kumar and many others strive to breathe new life into fabrics such as Ikkats and Uppada. It is one of the most popular varieties of Banarasi and Khadi. These designers made this Banarasi Silk, great design. They also work with weavers from different states who teach them to mix traditional crafts with modern blends to increase their commercial viability.
The Indian hand weaving industry has great potential. Active advertising, tax breaks and additional funding can help the industry take the world’s best craftsmen to the top.
India has a labor force, affordable raw materials, constant development of textile technology and positive changes in political reform. All these factors make India not only a choice but also a great destination for foreign investment in the textile and clothing industry.