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The domestic textile prices are witnessing tepid movement. The wholesale price index for manufacture of textiles stood at 134.60 in February 2024, down 1.90% compared to February 2023. The index edged up marginally by 0.45% on a monthly basis. The demand from overseas is lukewarm amid global economic uncertainty and disruptions in the Red Sea. India's textile exports contracted 4.2% year-on-year in the first 11 months of the current financial year, according to the commerce ministry data. India exported textiles worth $30.96 billion during April 2023-February 2024, down from $32.33 billion in the corresponding period of the previous fiscal year. The export of ready-made garments fell to $13.05 billion from $14.73 billion in the corresponding months of the previous fiscal year, down around 11%. The domestic demand appears steady and could pick up in months ahead on firm undertone in economic growth. Meanwhile, the domestic textile production jumped on annual basis at the start of the year 2024. The index of industrial production for textiles stood at 111.20 in January 2024, up 3% compared to January 2023. However, it showed a dip of 1.16% on a monthly basis. There has been a stiff incline in output trends in recent months and that could weigh on the prices in near term.
Domestic Cotton production is expected to be 6% lower
Cotton production during 2023-2024 cotton season is expected to be 6% lesser than the season that ended on September 30. The Committee on Cotton Production and Consumption, which met on November 6, estimated cotton production in the current season (October 2023 to September 2024) to be 316.57 lakh bales (170 kg each) as against 336.60 lakh bales in 2022-2023. The total consumption by textile mills is expected to be 294 lakh bales compared with 295 lakh bales last season. Exports are likely to be 25 lakh bales and imports 12 lakh bales. The committee projects production to be lower in the central (Gujarat, Maharashtra, and Madhya Pradesh) and southern zones (Telangana, Andhra Pradesh, Karnataka and Tamil Nadu).
Outlook:
The PLI scheme, along with the PM Mega Integrated Textile Region and Apparel (MITRA) schemes, are expected to bolster India's presence in the global apparel trade and offer a good support to the productivity. The long term narrative for the textile sector is supported following excellent demographic profile and sustained economic growth. India will strive to become the largest cotton producer globally, Minister for Textiles, Commerce and Industry, PiyushGoyal, said recently while inaugurating an annual global meeting of a UN recognized body of cotton producing and consuming nations. At the 81st plenary session of the International Cotton Advisory Committee (ICAC), the Minister said India has the largest area under cotton cultivation and is the second largest producer. The market for Indian textiles and apparel manufacturers may touch $ 350 billion mark by 2030 on the back of long-term positive outlook for the Indian economy and a strong focus on emerging areas like technical textiles, home furnishing, specialised fabrics and fashion apparels, according to a report. The report released by FICCI-Wazir Advisors noted that Indian textile and apparel market size was around $ 165 bn in 2022, including the domestic market of $ 125 bn and exports of $ 40 bn. Given the long-term positive outlook, the market size is projected to grow at a 10% CAGR to reach $ 350 billion by 2030.
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