According to data, the Indian textile industry had a passive reaction to the economic imbalance witnessed during the COVID-19 pandemic.

By Vidyashree S

23rd November, 2021

The Indian textile and apparel industry is one of the oldest and largest sectors in the Indian economy which is extremely varied, from hand-spun and hand-woven textiles to the capital-intensive sophisticated mills' sector. The industry which is closely linked to the agriculture sector for raw materials like cotton had a passive reaction to the economic imbalance witnessed during the COVID-19 pandemic.

According to Invest India data, India is the sixth-largest exporter of textiles and apparel in the world and it contributes 5% to the country’s GDP, 7% of industry output in value terms, and 12% of the country’s export earnings.

In the lead-up to the first-ever Republic 'India Economic Summit', which will see the most influential names in the industry and the economic world come together to put the world's fastest-growing major economy under the microscope, Republic World is taking an in-depth look into some of its key drivers. Here’s a look into how India’s textile industry held firm across the entire value chain from fiber, yarn, fabric to apparel amid the COVID pandemic. 

India's Textile Industry: The COVID scenario

Initially, the COVID-19 pandemic tore into the textile industry of India as the garment factories were forced to shut down or work at half capacity to curb the Coronavirus infections. But, when the country re-opened, India exported textile products worth Rs 1.77 lakh crore between January and July 2021, IBEF (India Brand Equity Foundation) informed. It is to be noted that the industry exported 52.6% more than the same period last year and 13.7% more than the pre-pandemic market of 2019. 

One of the factors that kept the industry alive amid the pandemic was the export of textile products to the US. 

According to an analysis of US International Trade Commission data by the Peterson Institute for International Economics, “India makes up about 16 percent of textile imports to the U.S. and about 5 percent of apparel and accessories”.

Textile industry market growth rate

As per the National Investment Promotion & Facilitation Agency, “In 2019-20, the domestic textiles and apparel industry stood at $108.5 bn of which $75 bn was domestically consumed while the remaining portion worth $28.4 bn was exported to the world market”. 

From April 2016 to March 2021, the highest contributors to FDI in India's textile sector were Japan, Mauritius, Italy, and Belgium. According to the data, about 5.8 million farmers rely on cotton production while 40-50 million people depend on allied sectors. 

Export of cotton yarn, fabrics, made-ups, handloom products and others was valued at $33.28 bn in August 2021 with a positive growth of 45.76% over exports of $22.83 bn in August 2020.

Future of Indian textile industry

For the past five years, the textile industry has seen a rise in investment as it attracted Foreign Direct Investment (FDI) worth $3.75 billion from April 2000 to March 2021. To further boost manufacturing, increase exports and attract investments to the sector, the production-linked incentive (PLI) scheme for man-made fiber and technical textiles is available under the Aatmanirbhar Bharat package. 

Owing to the pandemic, the demand for technical textiles in the form of PPE suits and other equipment has increased and so the country has begun to work on various initiatives to boost its technical textile industry. Government and top players in the sector plan to support the industry through funding and by manufacturing textiles using recyclable materials. 

With strong domestic consumption and export demand, the future of the Indian textile and apparel industry looks promising. Also, in the past decade, the retail sector witnessed rapid growth with the entry of many international players including Marks & Spencer, Guess, and Next into the Indian market. (Source: