Prospects for the Textile and Clothing Industry in India

摘要

India ranks as the world's second largest producer of textiles and clothing after China. The industry is extensive and wide ranging, and has contributed enormously to the country's economic development. It fulfils a vital role as an employer and a generator of foreign earnings and therefore receives extensive help and support from the Indian government. In 2011 as many as 35 mn people were employed directly in the sector, and it is estimated that a similar number were employed indirectly. Textile and clothing exports were valued at US$25 bn in 2010/11. This represented 11% of the country's total exports in the same year and made India the world's fifth largest supplier of textiles and clothing to international markets.India also has a huge and growing domestic market-as might be expected given its population of just over 1.2 bn people. In 2010 this market was valued at US$52 bn but by 2020 it is expected to be worth US$140 bn as the population increases in size and as consumers become wealthier with India's continuing economic growth. Such an increase would provide significant opportunities for foreign exporters and investors, as well as for the Indian textile and clothing industry itself.However, there are some serious concerns which have the potential to affect the sector's development. Taking a broad view, Indian textile and clothing manufacturers are dependent on foreign markets and on the European market in particular, Consequently, they are likely to be badly affected by the growing turmoil in the eurozone and the dismal economic outlook for Europe as a whole.Closer to home, the Indian government has caused alarm among foreign investors by introducing a retrospective tax on previous investments. Already, there are indications that foreign businesses are shelving plans for expansion in India until the position is clarified. In the meantime, the loss of trust is an unwelcome development at a time when the Indian textile and clothing industry needs to attract significant funding if it is to take full advantage of the opportunities for exploiting domestic and export markets.