The domestic demand appears steady and could pick up in months ahead on firm undertone in economic growth. Production trends are slightly mixed though. The index of industrial production for textiles stood at 105.80 in February 2024, up 3.76% compared to February 2023. However, it marked a dip of nearly 5% on a monthly basis, falling for second month. At 105.80, the output index is at lowest in three months.

The textile manufacturing industry is a vital sector of the Indian economy, with a rich history dating back centuries. The Indian textile manufacturing industry is a significant market, contributing to India’s GDP and employment. It is one of the largest employers in the country, generating jobs across the entire value chain, from cotton farming and spinning to weaving, dyeing, printing, and garment manufacturing.

According to the Confederation of Indian Industry (CII), India is the world’s second-largest producer of textiles and garments. It is also the sixth-largest exporter of textiles spanning apparel, home and technical products. India has a 4% share of the global trade in textiles and apparel. The textiles and apparel industry contribute 2.3% to the country’s GDP, 13% to industrial production and 12% to exports.

The textile industry has around 45 million of workers employed in the sector, including 3.5 million handloom workers. Total textile exports are expected to reach US$ 65 billion by FY26. The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26. The Indian apparel market stood at USS 40 billion in 2020 and is expected to reach US$ 135 billion by 2025. The Rs. 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major boost for the textile manufacturers.

Domestic Cotton production is expected to be 6% lower

The Cotton Association of India (CAI) has revised its cotton production estimates upwards to 309.70 lakh bales of 170 kg for the current season, 2023-24. In October 2023, the production was estimated at 294.1 lakh bales. Last year, CAI estimated production at 318 lakh bales. CAI noted in a statement that the total availability of cotton is projected at 359 lakh bales. This figure includes the balance stock from last season and imports, which is higher than the 355.40 lakh bales available in the 2022-23 season. The opening stock for the current season was 28.90 lakh bales, compared to 24 lakh bales in the previous season. The cotton imports this season have increased to 20.40 lakh bales, up from 12.50 lakh bales last year.

Outlook:

The global economic outlook is steady and that should support the trend in cotton exports from India. Meanwhile, local textile industry is also eagerly looking forward to the early signing of the Indo-United Kingdom and India – European Union Free Trade Agreement in coming months which will further boost exports. Prices are turning lower with the wholesale price index for manufacture of textiles standing at 134.50 in March 2024, down 1.68% on year and down marginally on month as well.