India has the largest number of looms in place to weave fabrics, accounting for 64 percent of the globally installed looms. After independence, weaving industry was seen both as an employment provider in large parts of rural India and a vehicle to protect cultural heritage. Indian weaving Industry has traditionally been one of the most prominent sectors of mass employment after agriculture and is the second largest provider of work force. There is a huge availability of raw materials, continuous supply of economically affordable labour force and a huge domestic market to cater to, so what is it that the industry needs to fulfil the US$ 500 billion dream of the Indian textile industry?
The weaving industry in India was traditionally made up of handloom weavers which supported the numerous types of costumes for men and women, saris and blouse and other clothing.
Indian textile industry is highly fragmented as about 95% of the industry is unorganized. The predominance of Micro, Small and Medium Enterprises (MSMEs) are under pressure to modernize, expand and cut cost as there is increasing internal competition as well as from outside which is forcing individual units to look for economies of scale. A large number of units therefore are coming together either in the form of strategic alliances or become a part of the common workshed and cluster.
The organized Loom sector contributes only 5% to the total production, while the decentralized powerlooms produce three fourth of the total woven fabrics, while the rest is made by the handloom sector. With an annual production of 49 bn. Sqm., India is among the world leaders in woven fabric manufacturing. Moreover, there has been a significant increase in the shuttleless looms in the country due to liberal government policy for power loom sector. This has propelled the woven fabric exports of India to worth US$ 3.45 bn. in 2017-18.
Clusters have been in existence in India for centuries and are known for their products at the national and international level. These can be classified as industrial, handloom, and handicraft clusters. Textile and apparel manufacturing is spread across India largely in cluster format, mostly in the form of natural clusters. India has more than 6400 clusters, of which around 50 clusters account for the majority of the fabric production in India. The major weaving states in India are Gujarat, Maharashtra, Madhya Pradesh, Uttar Pradesh and Tamil Nadu.
The presence of a strong textile manufacturing base in India puts India among the leading fabric producing countries in the world and sets up a perfect base for the industry to grow further. Also, various other factors have further contributed in supporting and increasing the demand of woven fabric in India, which include:
The most important component in making of any product is the raw material. India’s woven fabric production data signals at a clear domination of cotton based fabrics with a 50% share in the total woven fabric production, followed by Synthetic fabrics and other fabrics with a 30% and 20% share, respectively.
Table: India’s Fabric Production (million sq. m)
| Fabric – Mn Sq. m | 2012-13Production | Production2017-18 | % Share in 2017-18 | CAGR2012-18 (%) |
| Cotton woven | 21,878 | 24,467 | 50% | 2% |
| Synthetic woven | 18,086 | 14,460 | 30% | -4% |
| Other woven | 7,444 | 9,918 | 20% | 6% |
| Total woven fabric | 47,408 | 48,845 | 1% |
Source: Office of Textile Commissioner, Govt. of India
Cotton being the most abundant raw material in India is indispensable and accounts for around 73% of the total fibre consumption in India. Cotton is cultivated on more than 37% of the total cultivable land in India, which has enabled India to become the largest manufacturer as well as exporter of Cotton in the world. Also, India has a significant share in the global yarn spinning and is second only to China in production. It is considered the most modern segment of the entire textile and apparel value chain in India. The total production of spun yarn this year was estimated to be around 5,676 mn. Kg. with cotton occupying nearly 73% of the share. Indian manufacturers have the capabilities to produce all kinds of spun yarns including blended and MMF yarns.
Apparel: India’s domestic textile and apparel market is estimated at US$ 100 billion in 2018-19 and has grown at a healthy CAGR of 10% since 2005-06. The market is further expected to reach US$ 220 billion by the year 2025-26, growing at an even stronger CAGR of 12%.
Data Source: Ministry of Textiles & Wazir Analysis * Estimated
Growth in Income: India’s Per Capita Income has seen a significant growth in the last decade. India’s per capita GDP has grown at rate of CAGR 4.5% since 1980. However, the growth since 2008 has been fairly rapid at 5.4% CAGR. Also since 2006, the number of households in India which earn $2,300- $7,700 has increased significantly from 89 million households to 121 million households in 2016. For the apparel industry this translates to increase in the spending capacity of the consumers along with an increase in the customer base.
Fast Fashion: The modern fashion trends like fast fashion have led to an increased demand of economical apparel with high fashion content, which in turn has led to an increase in the frequency of apparel purchase. In the coming years, similar trends are expected to continue governing the apparel industry.
Hospitality Business: Hospitality industry is a major consumer of woven products, with the use of products ranging from bed sheets and coverings to towels and curtains. India in the last two decades has seen a huge growth in the number of hospitals and hotels, which in turn has led to an increase in demand of woven textiles.
Diversification: The consumption of apparel in India has not just grown in basic categories, but has led to a diversification of products into newer categories. Product categories like loungewear, evening wear, sportswear and activewear. An average Indian wears at least 2-3 different pairs of apparel throughout a day, which is another major growth driver for the industry.
India’s apparel production has seen a growth trend in the last 5 years. Since 2012-13, India’s apparel production has grown from 13.5 billion pieces to 20 billion pieces, at a CAGR of 8%.
Table: India’s Apparel and Made-up Production
| Production2012-13 | Production2017-18 | CAGR2012-18 | |
| Apparel (Mn pcs) | 13,500 | 20,000 | 8% |
| Made-ups (Mn kg) | 1,800 | 2,100 | 3% |
Data Source: Office of Textile Commissioner
Fabric Exports: India’s woven fabric exports stood at US$ 3,447 million in 2017-18, which has grown at 1% CAGR since 2012-13. Cotton and Synthetic woven fabrics accounted for a comparable share of ~37% each in the exports, which signifies the competitiveness of Indian fabrics irrespective of the raw material. The Indian weaving industry looks not only to support the growing domestic demand, but also grow in the exports.
Table: India’s Woven Fabric Exports (US$ million)
| Fabric- US$ Mn | Exports2012-13 | Exports2017-18 | Share(2017-18) (%) | CAGR 2012-18 (%) |
| Cotton woven | 1,637 | 1,708 | 37% | 1% |
| Synthetic woven) | 1,939 | 1,751 | 38% | -2% |
| Other woven | 644 | 797 | 17% | 4% |
| Total woven fabric | 3,248 | 3,447 | 17% | 1% |
Data Source: DGCI&S and Wazir analysis
Apparel Exports: India’s apparel exports have also seen a growth trend in the 5 years in lieu of reduction of China’s increasing focus on its domestic market. Moreover, the cost of production in countries like Bangladesh and Vietnam have increased significantly in the recent years as compared to India. This has presented India as a more economic sourcing destination for international buyers and has resulted in an increase of apparel exports.
Table: India’s Apparel Exports (US$ million)
| Apparel | Exports2012-13 | Exports2017-18 | Share(2017-18) (%) | CAGR2012-18 (%) |
| Cotton apparel | 7,838 | 8,001 | 48% | 0% |
| Synthetic apparel | 2,301 | 4,463 | 27% | 14% |
| MMF Woven apparel | 2,823 | 4,258 | 25% | 9% |
| Total apparel | 12,9628 | 16,722 | 5% | |
| Made-ups | 4,498 | 5,174 | 3% |
Data Source: DGCI&S and Wazir analysis
Home Textile Exports: The emergence of home textiles category has led to a growth of their exports from India reaching US$ 5 billion in the year 2017-18. Moreover, the home textiles exports are expected to reach US$ 14 billion by 2015-26, growing at a CAGR of 14%.
Table: India’s Home Textiles Exports (US$ billion)
| Year | Exports2005-06 | Exports2017-18 | CAGR2005-2017 (%) | Exports2025-26 (P) | CAGR2017-2025 (%) |
| Home Textiles | 3 | 8,001 | 4% | 14 | 14% |
Data Source: DGCI&S and Wazir analysis
However, there are a few shortcomings or the weaknesses of the industry.
Fragmented nature of industry, lacking economies of scale: India lacks presence of large fabric manufacturers when compared to China and USA. Also, the average size of weaving units in India falls short of the ones in China.
Low production efficiencies and obsolete technologies: Due to the fragmented nature of the industry, there is a lack of modern manufacturing machinery and worker skill levels which leads to lower yield as compared to other leading manufacturers of fabrics.
Low focus on product and process development and diversification: Indian manufacturers over the years have lacked the focus on product development and innovations. The smaller sizes of units has limited the implementation of proper systems and processes which would yield in lower defects and delays.
India’s weaving industry has the potential to continue growing in size and strength if the above shortcomings are worked upon.
Even though, the Indian spinning industry is considered one of the most modern in the world, the weaving sector lacks the technology and the structure to make it globally competitive. For an industry to be globally competitive, structure of the industry plays a vital role in defining the growth of the industry. As mentioned earlier, only 5% of the weaving industry falls under the organized sector and contributes only 5% to the total production.
Table: Installed Capacities (2016-17)
| Item | Units-06 |
| Looms (Organised Sector) | 69,0003 |
| Powerlooms | 2.86 Mn. |
| Handloom | 2.38 Mn. |
Source: Office of Textile Commissioner
The industry should take the advantage of the lucrative investment policies offered by various Indian states for the expansion of their operations.
The technology level of this sector varies from very basic plain looms to state-of-the-art shuttleless looms. There are approximately 135,000 shuttleless looms in this more advanced sector. There has been significant upgradation in the technology level of the powerloom sector during the last 5-6 years, but the typical scale of operation compared with China (620,000 shuttleless looms) is still seriously lacking. Manufacturers should focus on capacity building and should further invest modern machinery.
Process Development and Product Innovation
India is a destination for low value and traditional fabrics and lacks the technological and design innovations. Countries like China and Taiwan are known for their value added fabrics, manufacturing capability of which India currently lacks. To change this perception, Indian manufacturers need to integrate the role of designers into the manufacturing for Research and Development of newer products, instead of replicating the western designs. Currently, only a few major manufacturers take the services of textile designers while developing their products.
Manufacturing Excellence
Manufacturing Excellence is the process of producing more consistently and reliably than the competition.
Trends that are shaping the manufacturing globally are:
Manufacturing excellence is the most effective solution for Indian woven textile manufacturers to cater to the buyer demand and at the same time adapt to the modern dynamics of the manufacturing industry. With the ever increasing raw material, wages and power costs, a modern approach is required.
Technology focus includes focus on maintenance and introduction of newer technologies for effective cost saving measures. For a weaving unit to function properly, well defined Standard Operating Procedures (SOPs) need to be defined. A proper sustenance of these SOPs could help maximize the bottom lines at no extra cost to the company. Although, weaving doesn’t require much human intervention, a highly trained staff will be efficiently able to deal with breakdowns. A skilled staff will also help in executive preventive maintenance of the machines. Finally, for the tracking of all the systems and processes, a connection between all the entities of the manufacturing system is required. This much needed connection is provided by systems like Management Information Systems (MIS) and Enterprise Resource Planning (ERPs) Software. A proper integration of these systems will enable the management to monitor the production round the clock; return real time production data; systematic data collection and analysis; timely prediction of failures and delays.
Although, the Indian weaving industry faces a few challenges, the solutions to these are basic and structural. The industry is expected to continue growing at a steady pace in the coming years and to support this growth, the industry needs to focus on investing structurally and creating economies of scale. Also, the industry should emphasize on updations of technologies and optimizing systems. Such emphasis could be provided through the adoption of modern practices like manufacturing excellence. Manufacturing excellence is the key to success for existing players and for new companies also producing world class quality with minimum cost of production. Finally, the industry should focus on treating the textile industry alike the service industry. The stakeholders in the industry should go beyond their responsibilities in providing the buyer with a flawless experience, which would help in making Indian weaving industry even more competent globally.
The article has been authored by Sanjay Arora, Business Director and Priyam Pandit, Research Analyst.
It was published in March 2019 in Fibre2Fashion.