Manufacturing Platform for the Garment Industry | Fast & Sustainable - Fashinza (2023)

India's textile industry has always had a strong presence in the country's economic potential. It is quite important. Apart from providing basic requirements, the textile sector adds to the country's productive capacity, employment generation and trade gains.

From various studies it appears that textile production in India is expanding into sectors such as fiber, textiles and textile industry. There is also an improvement in estimated partial profitability and the increasing trade balance in the global economy. When considering the characteristics of a manufacturer or industry sector, the terms output (the level of output), efficiency (output per unit of input), and efficiency (actual output compared to future output) are commonly used as indicators. Despite their close relationship, these metrics can produce different classifications when it comes to evaluating effectiveness.

Textile exports account for about 30% of India's total exports. As the only industry with significant added value at every stage of production, textiles are self-sufficient, from raw material procurement to finished products.

As India instituted limited liberalization and privatization for economic growth in the early to late 1970s, it knew the importance of trade. From 1948 to 1990, the Indian economy was governed by a socialist/communist planned economic system based on structural adjustment and industrial licensing. India's export growth has been disappointing.

The impact of COVID on the Indian T&A sector
All commercial activities, with the exception of critical goods and services, have come to a screeching halt as a result of the pandemic.

The textile and clothing industries were no different. See how they suffered.

• Shutdown of production

For almost 2-3 months, the industry was immediately shut down, except for a few companies that dedicated their production practices to the manufacture of PPE. However, in the following months, the majority of units operated at unsatisfactory utilization levels.

• Delayed transfer

The pandemic has disrupted transportation and limited exports of goods and services, damaging the entire value stream. India's net trade in April and May 2021 was nearly 50% lower, each week, compared to the previous year. The industry lost orders as a result of market uncertainty, international and domestic buyers canceled or discontinued purchases.

• Poor offline store sales

The shutdown regulations across the country caused a slump in the apparel retail market for at least 4 to 5 months. Additionally, sales during the festive and festive months were greatly affected.

• New consumer trends of the future have emerged.

Due to growing market demand, India's e-commerce merchandise and apparel sales are expected to skyrocket in 2022. Work-from-home opportunities have created a market for casual wear instead of formal wear.

Government initiatives

The national apparel and textile sector in India generates 5% of the country's GDP. 7 percent of the industry contributed in terms of value and volume, and 12 percent in terms of export earnings. India is the sixth largest textile and apparel exporter in the world.

India is a major supplier of linen and jute to the world. India is also the world's leading producer of silk, contributing 95% of all handloom textiles. The Indian tech textile market is estimated to be worth $16 billion, accounting for nearly 6 percent of the global market. Here is a look at some of the steps taken by the government to boost the growth of the textile sector:

• The Indian government has instituted a number of export development programs for the textile industry. It has also allowed 100 percent FDI in the sector through the automated approach. The Rs. 10,683 crores (US$1.44 billion) PLI scheme is projected to provide a significant boost to textile manufacturers. The concept seeks to reward MMF (man-made fiber) garments, MMF fabrics and ten categories of Tech Textiles.
  
• The Indian government has announced a uniform consumption tax rate of 15 per cent on man-made fibers (MMF), MMF yarn, MMF textiles and garments, effective from January 1, 2022.
  
• Mr. Piyush Goyal, Union Minister of Textiles announced the launch of a complex handicraft complex in Manipur as well as a handicraft and handicraft village at Moirang, Bishnupur.
  
• From the financial years 2016 through 2022, the government offered money of Rs. 17,830 crore (US$ 2.2 billion) for the 'Amended Technological Up-gradation Fund Scheme' (A-TUFS) to promote the Indian textile sector and market liberalisation.
  
• Flipkart and Himachal Pradesh State Arts and crafts and Handloom Corporation Ltd. (HPSHHCL) have signed a letter of intent (MoU) in mid-2021 to help government artisans, weavers and artisans showcase their signature items on e-commerce platforms.
  
• Mr. Piyush Goyal - Minister of Textiles, Commerce and Industry, Consumer Affairs, Food and Public Distribution - said that initiatives are needed to increase the production capacity of Indian textile enterprises from Rs. 50,000 crore (US$8.06 billion) to 128,000 crores (US$16.80 billion) in three years. He stated that a three-year target should be created to increase textile sales in India from Rs. 1000 crore (US$ 335.92 million) to Rs. 10,000 crore (US$1.34 billion). He then asked for the formation of a group consisting of all weavers, trainers, device makers, market analysts, as well as other participants to identify ways and methods to achieve these goals and promote the Indian textile sector as a whole.

• The Defense Research and Development Organization (DRDO) is assisting the Indian textile sector in manufacturing fibers to reduce dependence on Chinese as well as other international imports of military wear garments. The Indian military industry has expressed its support for the Indian technological textile industry.
  
• To help the handicrafts and handicrafts industry, significant efforts have been made to register workers in the government e-Marketplace (GeM), which will give them a bigger market and enable them to market their products directly to various authorities and organizations. On the GeM portal, 243,167 weavers/artisans/handicrafts organizations were registered as on 20 March 2022.
  
• As many as 70 firms have appealed for assistance under the Rs 10,600 crore Production Linked Incentive (PLI) scheme for the textile and apparel industry, with outlays totaling around Rs 2.5 million crores.

The benefits will be provided for a period of 5 years under the scheme. It will continue to operate until 2029-30.

There are 2 types of investors who can participate in the scheme. Those who spend at least Rs 300 crore will qualify for a 15% bonus in the first year if their revenue exceeds Rs 600 crore. Another category is those who spend at least 100 crore. They would also get 11% in the first year if their turnover exceeds Rs 200 crore. During the first year, both types of stakeholders should show a 25% annual increase in turnover. However, in both cases, the benefits will decrease by 100 percentage points for each passing year.

The road ahead

India is launching major initiatives to expand its sophisticated manufacturing base. As a result of the coronavirus outbreak, there is an increase in demand for textile materials in the form of uniforms and PPE accessories. The government helps the agencies by providing funding and equipment support.

The Indian textile company's future looks bright, driven by steady domestic consumption as well as terms of trade. With increasing materialism and disposable money, the retail system has seen remarkable expansion in the last decade, thanks to the entry of large multinationals into the Indian market, including H&M, Guess and Next.

The increased discretionary income came from rapid economic expansion. This resulted in increased sales volume, resulting in a huge domestic economy.

Textiles play an important role in the global production chain, with India ranking sixth in the world in terms of apparel, home and technology exports. In the agricultural and manufacturing sectors, almost 40 million people are currently employed in the wool industry.

Achieving the export target of $65 billion - up from $36 billion in 2019 - will require a significant increase in India's commitment to five key sectors: apparel, textiles, home textiles, man-made fibers and yarns, and technological textiles.

To achieve these goals, both the government and the private sector must undertake ambitious projects. And the government is likely to be up to the task. The recent introduction of several schemes like MITRA, PLI and RoDTEP demonstrates the significant attention of the government in this area.

It will be vital for management to vet such initiatives with real integration, and it will be even more important for business participants to successfully use these programs.