Can India’s Textile Industry Compete with China & Bangladesh? Key Insights

India’s Textile Sector: A Pillar of the Economy with Untapped Potential
India’s textile and apparel (T&A) industry is a vital economic driver, yet it faces hurdles in scaling globally. Here’s a breakdown of its current state:

Key Strengths of India’s Textile Sector
Employs 4.5 crore people, from cotton farmers to garment workers.
Contributes 2.3% to GDP and 12% to total exports.
India is the world’s largest cotton producer, accounting for 24% of global output.
Home to a diverse textile ecosystem—handlooms, power looms, and modern factories.

Why Is India Falling Behind in Global Trade?
Despite its strengths, India’s textile exports remain stagnant at $37.8 billion (4.2% global share), lagging behind China and Bangladesh. Here’s why:
1. Fragmented MSME Dominance
80% of apparel units are small-scale, lacking the capacity to handle bulk international orders.
Disorganized supply chains lead to inefficiencies in production and delivery.
2. Stagnant Apparel Exports
India’s apparel exports have remained at $15.7 billion (3% global share) for two decades.
Meanwhile, Bangladesh’s exports are double India’s, and China dominates with 30%+ global share.
3. Infrastructure & Cost Challenges
High power costs, poor logistics, and complex labor laws reduce competitiveness.
Vietnam and Bangladesh offer faster turnaround times and lower production costs.
4. Overdependence on Cotton
Man-made fibers (MMF) dominate 70% of global demand, but India focuses mostly on cotton.
Countries like China and Vietnam lead in synthetic textile manufacturing.


Government Initiatives to Boost the Textile Sector
To address these challenges, the government has introduced key schemes:
1. Production Linked Incentive (PLI) Scheme
₹19,000 crore allocated to promote MMF apparel and technical textiles.
Aims to attract 60-70 large manufacturers and generate 7.5 lakh new jobs.
2. PM MITRA (Mega Integrated Textile Regions and Apparel) Parks
7 mega textile parks with plug-and-play infrastructure (₹4,445 crore investment).
Designed to cluster small units, improving efficiency and export readiness.
3. Amended Technology Upgradation Fund Scheme (ATUFS)
Provides subsidies for machinery upgrades in weaving, processing, and garment units.
4. Samarth Scheme for Skill Development
Trains workers to enhance productivity and match global standards.
Projected Growth: Can India Reach $40B in Exports by 2030?
Current trends suggest apparel exports may only reach $21 billion.
Success depends on scaling MSMEs, adopting MMF, and improving logistics.


The Way Forward: Strategies for Growth
1. Consolidate MSMEs Through PM MITRA Parks
Clustering small units will improve bulk order handling and reduce costs.
2. Shift Focus to Man-Made Fibers (MMF)
Synthetic textiles are the future—India must increase MMF production.
3. Enhance Skill Development & Automation
Training workers in advanced manufacturing techniques can boost efficiency.
4. Improve Logistics & Reduce Compliance Burden
Faster shipping, lower power costs, and easier regulations will attract global buyers.
5. Leverage Free Trade Agreements (FTAs)
Negotiating better trade deals with the EU and USA can reduce tariff disadvantages.

5 Sample Questions & Answers for Competitive Exams
Q1. (GS III: Economy)
What percentage of India’s industrial production comes from the textile sector?
A: 13% (as per Index of Industrial Production data).
Q2. (SSC General Awareness)
Which scheme aims to develop 7 mega textile parks with plug-and-play infrastructure?
A: PM MITRA (Mega Integrated Textile Regions and Apparel) Scheme.
Q3. (PSC: Employment Trends)
How many people are employed in India’s cotton value chain?
A: Over 4.5 crore (from farming to garment manufacturing).
Q4. (UPSC: Government Schemes)
What is the primary objective of the PLI Scheme for textiles?
A: To boost production of man-made fibre (MMF) apparel and technical textiles with ₹19,000 crore investment.
Q5. (NIFT/NID: Industry Analysis)
Why does Bangladesh outperform India in garment exports?
A: Due to lower labor costs, EU tariff benefits, and consolidated large-scale factories.