The Textile and Apparel Industry in India

Introduction

The Multi-Fibre Agreement (MFA), that had governed the extent of textile trade between nations

since 1962, expired on 1 January, 2005. It is expected that, post-MFA, most tariff distortions

would gradually disappear and firms with robust capabilities will gain in the global trade of

textile and apparel. The prize is the $360 bn market which is expected to grow to about $600 bn

by the year 2010 – barely five years after the expiry of MFA. An important question facing

Indian firms is whether their capabilities and their diverse supply chain are aligned to benefit

from the opening up of global textile market?

The history of textiles in India dates back to the use of mordant dyes and printing blocks around

3000 BC. The diversity of fibres found in India, intricate weaving on its state-of-art manual

looms and its organic dyes attracted buyers from all over the world for centuries. The British

colonization of India and its industrial policies destroyed the innovative eco-system and left it

technologically impoverished. Independent India saw the building up of textile capabilities,

diversification of its product base, and its emergence, once again, as an important global player.

Today, the textile and apparel sector employs 35.0 mn people (and is the 2

generates 1/5

it the largest industrial sector of the country. This textile economy is worth US $37 bn and its

share of the global market is about 5.90 per cent. The sector aspires to grow its revenue to US

$85bn, its export value to US $50bn and employment to 12 million by the year 2010 (Texmin

2005).

nd largest employer),th of the total export earnings and contributes 4 per cent to the GDP thereby making