Insights into the Textile and Apparel Market Growth and Challenges
Domestic and global textile and apparel market trends suggest significant growth opportunities in the coming years, driven by increasing disposable income and changing consumption patterns. However, challenges such as low market share in MMF exports and competition from other countries need to be addressed. A proposed Focus Product Incentive Scheme aims to boost the MMF apparel and technical textiles sectors, fostering innovation and global competitiveness. The implementation of the scheme is anticipated in the fiscal year 2020-21 for a duration of five years.
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MARKET SCENARIO (DOMESTIC & GLOBAL) Domestic Textile and Apparel market including export is around US$ 140 billion in 2018-19. With growth in disposable income - domestic consumption including exports of T&A is likely to increase at 12% CAGR to reach US$ 280 billion by 2025 MMF will contribute about 84% of total fibre mill consumption between 2015- 2030 (source: PCI Wood Mackenzie,). International Cotton Advisory Committee (ICAC) estimate about 80% of fibre consumption will be contributed by non-cotton segment by 2025.
CHALLENGES Export Product T&A MMF (All lines) Global (2019) USD 821 bn USD 330 bn India (2019) USD 35.5 bn (4.3%) USD 9.3 bn (2.8%) India s mill fibre consumption ratio of Cotton Vs MMF is 60:34. On the contrary, global mill fibre consumption ratio of Cotton Vs MMF is 30:70. Cotton products are low value products Cotton products are summer products, used for only 4 months in a year India is competing with the poorest nations viz- Bangladesh, Indonesia, Vietnam, Cambodia etc. in cotton sector
BOTTLENECKS Our share, currently 2.8% in global MMF exports in all lines. MMF products are high value products and mainly winter wear Global exports in 40MMF identified lines: US$140bn India s export share at identified 40 MMF apparel lines: 0.77% (USD 1.08 billion out of US$ 140bn) Share of globally traded top 10 technical textiles lines (USD 82 bn) Whereas India s aggregate share is: 0.85%. Share in Textiles & Apparel Exports 2019 (% terms) China India Vietnam MMF 49.7% 26.0% 48.6% Cotton 28.4% 49.1% 35.2%
PROPOSED FOCUS PRODUCT INCENTIVE SCHEME (FPIS) OUTLINE FPIS is conceived to remove disabilities and to create global champions in MMF apparel and technical textiles sectors; Incentive proposed to industry for achieving intended incremental turnover Turnover ratio of MSME has been raised recently. This scheme will help MSME sector. This scheme aims to create 50-60 world class global champion company in these segments. Invite investment in the sector and generate additional employment.
Implementation of Scheme FPIS The scheme is expected to be announced during FY 2020-21 Scheme will be for 5 years from 2021-22 to 2025-26 Late incumbent joining the scheme will get lesser incentives for lesser period because scheme is for 5 years only.
40 MMF Apparel Lines exports in 2019 (US$ in Mn) and share in % Product label Global India Product code Bangladesh Vietnam India's share in global export Bangladesh's share in global export Vietnam's share in global export 611030Jerseys, pullovers, cardigans, waistcoats and similar articles 620193Men's or boys' anoraks, windcheaters, wind jackets and similar articles 26125.37 70.10 2613.675 1929.398 0.3% 10.0% 7.4% 10828.58 5.19 575.469 1915.618 0.0% 5.3% 17.7% 620293Women's or girls' anoraks, windcheaters, wind jackets and similar articles 620343Men's or boys' trousers, bib and brace overalls, breeches and shorts 610463Women's or girls' trousers, bib and brace overalls, breeches and shorts 620463Women's or girls' trousers, bib and brace overalls, breeches and shorts 620213Women's or girls' overcoats, raincoats, car coats, capes, cloaks 610443Women's or girls' dresses of synthetic fibres, knitted or crocheted 611596Full-length or knee-length stockings, socks and other hosiery, incl. footwear 620433Women's or girls' jackets and blazers of synthetic fibres 610343Men's or boys' trousers, bib and brace overalls, breeches and shorts 611241Women's or girls' swimwear of synthetic fibres, knitted or crocheted 611430Special garments for professional, sporting or other purposes, 10362.39 4.44 423.342 1519.182 0.0% 4.1% 14.7% 8056.63 99.75 733.252 1436.879 1.2% 9.1% 17.8% 7974.81 23.03 260.903 1056.146 0.3% 3.3% 13.2% 6736.06 137.49 365.354 972.898 2.0% 5.4% 14.4% 5153.92 4.24 109.584 374.432 0.1% 2.1% 7.3% 5050.64 86.86 124.906 455.85 1.7% 2.5% 9.0% 4306.64 28.82 2.305 81.59 0.7% 0.1% 1.9% 4086.95 29.13 81.978 301.681 0.7% 2.0% 7.4% 3996.61 48.45 161.397 584.799 1.2% 4.0% 14.6% 3879.49 0.19 87.886 315.728 0.0% 2.3% 8.1% 3825.56 66.72 121.355 344.76 1.7% 3.2% 9.0%
Product code Product label Global India Bangladesh Vietnam India's share in global export Bangladesh's share in global export Vietnam's share in global export 0.4% 6.0% 9.8% 610822 Women's or girls' briefs and panties of man- made fibres, knitted or crocheted 620333 Men's or boys' jackets and blazers of synthetic fibres (excluding knitted or crocheted, and ... 621133 Men's or boys' tracksuits and other garments, n.e.s. of man-made fibres 620113 Men's or boys' overcoats, raincoats, car coats, capes, cloaks and similar articles 3193.13 12.23 190.761 312.601 0.9% 3.1% 9.4% 3171.02 28.20 98.768 296.725 1.3% 2.0% 16.7% 2715.21 34.23 54.487 454.712 0.1% 2.9% 9.3% 2332.83 3.05 67.549 216.228 4.3% 2.3% 5.7% 620453 Women's or girls' skirts and divided skirts of synthetic fibres (excluding knitted or crocheted 2282.97 98.37 51.731 130.198 0.0% 4.6% 12.7% 610230 Women's or girls' overcoats, car coats, capes, cloaks, anoraks, incl. ski jackets, windcheaters, 620530 Men's or boys' shirts of man-made fibres 2218.70 0.49 102.039 281.854 3.3% 16.5% 12.7% 2144.86 71.55 354.018 273.344 0.8% 3.4% 4.2% 610832 Women's or girls' nightdresses and pyjamas of man-made fibres, knitted or crocheted 610620 Women's or girls' blouses, shirts and shirt- blouses of man-made fibres, knitted or crocheted ... 610444 Women's or girls' dresses of artificial fibres, knitted or crocheted (excluding petticoats) 610433 Women's or girls' jackets and blazers of synthetic fibres, knitted or crocheted 621430 Shawls, scarves, mufflers, mantillas, veils and similar articles of synthetic fibres (excluding ... 610892 Women's or girls' n glig s, bathrobes, dressing gowns, housejackets 611521 Pantyhose and tights of synthetic fibres, knitted 2032.00 15.47 68.08 85.616 1.1% 4.9% 12.2% 1948.35 22.16 95.395 237.238 0.5% 7.0% 6.4% 1837.57 8.76 128.724 117.351 0.4% 1.6% 2.7% 1696.91 6.78 27.837 45.477 3.2% 0.1% 0.2% 1579.38 50.68 1.492 3.649 0.4% 2.2% 6.3% 1495.22 5.28 32.383 94.085 1392.82 0.24 2.285 2.82 0.0% 0.2% 0.2%
Product code Product label Global India Bangladesh Vietnam India's share in global export Bangladesh's share in global export Vietnam's share in global export 610130 Overcoats, car coats, capes, cloaks, anoraks, incl. ski jackets, windcheaters, wind-jackets 610712 Men's or boys' underpants and briefs of man-made fibres, knitted or crocheted 611693 Gloves, mittens and mitts, of synthetic fibres, knitted or crocheted 610453 Women's or girls' skirts and divided skirts of synthetic fibres, knitted or crocheted 1388.40 1.22 83.594 215.31 0.1% 6.0% 15.5% 1372.34 24.50 52.217 222.473 1.8% 3.8% 16.2% 1317.70 11.15 8.547 93.411 0.8% 0.6% 7.1% 1043.77 7.62 26.414 68.4 0.7% 2.5% 6.6% 621111 Men's or boys' swimwear (excluding knitted or crocheted) 620312 Men's or boys' suits of synthetic fibres (excluding knitted or crocheted, tracksuits, 611212 Track-suits of synthetic fibres, knitted or crocheted 620930 Babies' garments and clothing accessories of synthetic fibres 620892 Women's or girls' singlets and other vests, briefs, panties, n glig s, bathrobes, 676.38 0.93 76.438 69.733 0.1% 11.3% 10.3% 642.19 5.97 18.12 39.659 0.9% 2.8% 6.2% 621.83 1.97 38.445 59.688 0.3% 6.2% 9.6% 561.08 24.72 33.205 48.819 4.4% 5.9% 8.7% 527.55 25.54 7.356 32.149 4.8% 1.4% 6.1% 611522 Pantyhose and tights of synthetic fibres, knitted or crocheted 610722 Men's or boys' nightshirts and pyjamas of man-made fibres, knitted or crocheted 500.28 0.96 9.097 17.732 0.2% 1.8% 3.5% 442.84 12.11 13.554 13.079 2.7% 3.1% 3.0% 611231 Men's or boys' swimwear of synthetic fibres, knitted or crocheted 621112 Women's or girls' swimwear (excluding knitted or crocheted) Total 354.97 0.26 7.092 29.144 0.1% 2.0% 8.2% 284.29 6.25 11.429 19.856 2.2% 4.0% 7.0% 140158.21 1085.09 7322.46 14770.31 0.77% 5.2% 10.5%
Top 10 Technical Textiles Lines HS Codes at 6 digit Commodity Global Export in 2019 (USD bn) India's export in 2019 (USD bn) % share of India's export in global market Sanitary towels (pads) and tampons, napkins and napkin liners for babies, and similar articles, ... Plates, sheets, film, foil and strip, of plastics, reinforced, laminated, supported or similarly ... Safety airbags with inflator system and parts thereof, for tractors, motor vehicles for the ... Floor coverings, whether or not self-adhesive, in rolls or in the form of tiles, and wall or ... Articles and equipment for sport and outdoor games n.e.s; swimming and paddling pools 961900 15.75 0.04 0.23% 392190 15.21 0.34 2.23% 870895 11.65 0.05 0.39% 391810 9.25 0.06 0.66% 950699 6.53 0.11 1.63% Textile fabrics impregnated, coated, covered or laminated with polyurethane (excluding wallcoverings ... Sterile surgical catgut, similar sterile suture materials, incl. sterile absorbable surgical ... 590320 5.90 0.00 0.08% 300610 4.99 0.03 0.57% Men's or boys' garments of textile fabrics, rubberised or impregnated, coated, covered or laminated ... 621040 4.28 0.02 0.49% Wadding, gauze, bandages and the like, e.g. dressings, adhesive plasters, poultices, impregnated ... Adhesive dressings and other articles having an adhesive layer, impregnated or covered with ... Total 300590 4.27 0.05 1.17% 300510 4.14 81.96 0.01 0.70 0.17% 0.85%
TURNOVER LINKED SUBSIDY SCHEME (PART 1) Description Eligibility- Minimum turnover between 100 to 500 crore Projected Growth Incentive paid per company in Turnover per unit 150 14 Year 1 Increase turnover of 50% over baseline. (For sake of calculation Rs.300 cr is taken as turnover in base year) Incentive @9% 50% increase over year 1/ Incentive @8% 225 18 Year 2 338 24 Year 3 50% over year 2 - @9% for new companies @ 8% on incremental turnover of new companies/ Incentive @7% 506 30 Year 4 50% over year 3/ Incentive @6% 759 38 Year 5 50% over year 4/ Incentive @5% Note: Calculation is for company having turnover of Rs. 300 crore in the base year
TURNOVER LINKED SUBSIDY SCHEME (PART 2) Description Eligibility- Minimum turnover above 500 crore Projected Growth in Turnover per unit (Rs Crore) Incentive paid per company (Rs Crore) Year 1 Increase turnover of 50% over baseline/ Incentive@7% 25% increase over year 1/ Incentive@6% 250 18 Year 2 313 19 Year 3 25% increase over year 2/ Incentive@5% 391 20 Year 4 25% increase over year 3/ Incentive@4% 488 20 Year 5 25% increase over year 4/ Incentive@3% 610 18 Note: Calculation is for company having turnover of Rs. 500 crore in the base year
TURNOVER LINKED SUBSIDY SCHEME (PART 3) Year Additional incentive on greenfield - Minimum investment Rs. 500 crore Projected Growth in Turnover per unit (Rs Crore) Incentive paid per company (Rs crore) Year 1 Start of production: turnover to investment ratio becomes three (3)/Incentive@11% 165 1500 Year 2 25% increase over year 1/Incentive@10% 1875 188 Year 3 25% over year 2/Incentive@9% 2344 211 Year 4 25% over year 3/Incentive@8% 2930 234 Year 5 25% over year 4/Incentive@7% 3662 256 Note: Calculation for incentive is on the basis of minimum investment of Rs. 500 crore (for greenfield projects) and on achieving turnover 3 times i.e. Rs. 1500crore. Thereafter @ 25% increment
SAMPLE CALCULATION FOR SCHEME-1 Description Eligibility- Minimum turnover between Rs.100 to 500 crore Projected Growth in Turnover per unit Incentive paid per company Year 1 Increase turnover of 50% over baseline to facilitate smaller firms to qualify. (Say Turnover for base year is Rs.300 cr, So in Ist year company has to achieve min Rs.150 cr) 150 13.5 Incentive @9% 50% increase over year 1, Incentive @8% 50% over year 2, Incentive @7% 50% over year 3, Incentive @6% 50% over year 4, Incentive @5% Year 2 225 18.0 Year 3 338 23.6 Year 4 506 30.4 Year 5 759 38.0
