Ashok Gulati, Ritika Juneja & Sulakshana Rao, Respectively distinguished professor, research fellow, & senior fellow, ICRIER
India has set an ambitious target to elevate its textile and apparel (T&A) exports from $34.8 billion in FY24 to an eye-popping $100 billion by 2030. This raises a critical question: Is this lofty ambition grounded in reality? India’s T&A exports have grown steadily from $11.5 billion in FY01 to $34.8 billion in FY24, accounting for only 4% share in global exports worth $774.4 billion.
At this pace, achieving the $100-billion target by 2030 seems a tall order unless dramatic, game-changing reforms are introduced.The apparel segment (Harmonised System of Nomenclature codes 61 and 62) within the overall T&A exports contributes about 42%. It rose from $5.5 billion in FY01 to $14.5 billion in FY24. Its share in global apparel exports has remained stubbornly around 3% over this entire period.
Meanwhile, competitors like Bangladesh and Vietnam have surged ahead. Bangladesh’s global share has grown from 2.2% to 9.6%, while Vietnam’s share jumped from 1% to 5.8% from 2000 to 2023 (see graphic). A significant portion of this shift occurred post-2010 when China’s share slipped from 34.8% to 29.8%, partly due to its trade war with the US.
So, what is preventing India from seizing this opportunity to expand its apparel exports and capture the market space left by China? In fact, India should focus on the entire T&A exports if it aims to achieve its $100 billion target. Let us dig into the challenges ahead in the textile value chain.
At the farm level, former Prime Minister Atal Bihari Vajpayee took a bold decision to introduce genetically modified (GM) Bt cotton hybrids in 2002. As a result, India’s cotton production surged from 13.6 million bales in 2002-03 to 39.8 million bales by 2013-14, a 193% increase. This “gene revolution” increased productivity by 87%, from 302 kg/hectare in FY03 to 566 kg/hectare in FY14.
The area under cotton cultivation also expanded by 56%. However, since 2014, production has been gradually declining, with output projected to fall to 30 million bales in FY25, the lowest in 15 years. India is likely to become a net importer of cotton, with imports reaching 2.6 million bales and surpassing exports of just 1.5 million bales in marketing year 2024-25 — a significant decline from the peak of 11.7 million bales in FY14.
This has largely been caused by not allowing the next generation, herbicide tolerant, of Bt seeds to come to India despite clearance by the apex Genetic Engineering Appraisal Committee under the ministry of environment, forest, and climate change. While India’s textile industry uses a variety of fibres, cotton-to-man-made fibre (MMF) ratio (60:40) contrasts with the global average of 30:70, highlighting a shift towards MMF fibres. India has over one lakh garment factories, but about 80% of them are in the decentralised sector.
Exports are way below their potential. Slow adoption of modern technology and weak value chain integration are key barriers. The global apparel market is expected to reach $2.37 trillion by 2030, presenting a major opportunity. While the Pradhan Mantri Mega Integrated Textile Region and Apparel (PM-MITRA) scheme aims to develop integrated textile parks, high land requirements exclude micro, small, and medium enterprises (MSMEs), limiting its reach.
To overcome the challenges and achieve the target for T&A exports by 2030, India must adopt a strategic approach and implement bold policy reforms. First, its garment sector needs to transition into a fashion-driven industry. To support this, it is crucial to incentivise and invest in MMF-based apparel while removing non-tariff barriers such as the quality control orders on MMF.
In 2024, raw materials for MMFs were costlier in India by about 20% (according to Amitabh Kant) compared to our competitors like Bangladesh, China, and Vietnam. Second, the PM-MITRA scheme must be fast-tracked to create integrated textile hubs which will enhance scalability and efficiency in fabric and garment manufacturing.
Third, negotiating free trade agreements (FTAs) with the European Union (EU) and the US — which account for nearly 66% of India’s apparel exports — could offer a substantial boost. Currently, these markets impose tariff rates of 9.7% and 11.47% respectively on Indian apparel. In contrast, the EU offers zero-duty access to Bangladesh under the Generalised System of Preferences Everything but Arms arrangement (signed in 2001) and imposes 1.66% tariff on Vietnam’s apparel exports under the EU-Vietnam FTA (2020). This creates a competitive disadvantage for Indian exports. So, fast-tracking trade negotiations is essential.
Additionally, India should explore emerging markets like Japan, Russia, Brazil, and South Korea which offer significant opportunities for products like women’s western wear, intimate wear, swimwear, and outerwear. Fourth, improving cotton productivity and fibre quality is critical. India’s advantage lies in its strong base of natural fibre production, particularly cotton, which it is underutilising. Streamlining the approval process for GM crops and establishing a single-window clearance system will speed up the adoption of high-yield, pest-resistant, next-generation cotton varieties.
Furthermore, expanding irrigation, promoting high-density planting techniques, and investing in precision farming will help India bridge the productivity gap (435 kg/hectare) with global leaders like China (1,945 kg/hectare) and Brazil (1,839 kg/hectare).By addressing these critical areas, India may position itself for a much-needed leap in T&A exports, moving slightly closer to its ambitious target. But this is feasible only if the Modi government embraces these bold reforms — else, it will remain a pipe dream.
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