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Trade Competitiveness of India’s Textile and Apparel Sector
An analysis of the trade competitiveness of India’s man-made fibre-based textile and apparel sector, based on the Index of Revealed Comparative Advantage, Trade Intensity Index, and Export Similarity Index, for the period 2010–19, revealed that India has a significant advantage in man-made yarns, fibres and technical textiles. A survey of the top 10 export markets indicates that India enjoys a comparative advantage in 53 of 319 products. India has a high trade intensity with the United States and United Kingdom in fabric, apparels, made-ups (including carpets), and technical textiles (including non-woven). Further, India does not face high export competition in this sector.
Textile and apparel manufacturing is heterogeneous in nature and involves a complex value chain from the production of fibre to finished products. The dynamism in sectoral manufacturing and the growing change in consumer preference and demand pattern across the globe plays a crucial role in influencing manufacturing activities. The global textile and apparel market was worth $1,500 billion in 2017, expected to grow at 4% compound annual growth rate (CAGR) in the next eight years owing to the growth in population and disposable incomes (ITC Trademap). The rapid change in fashion and the rise in development gains of countries across the world have engendered structural changes in the textile value chain on the one hand and an ever increased demand for textile and apparel on the other.
The global production and trade of textiles is primarily dominated by two major fibre-based products, namely cotton and man-made fibre (MMF)-based products. Historically, the textile and apparel production chain was dominated by natural fibre-based products, including cotton, But in the last few decades, MMF-based products have begun dominating global production and trade. This is attributed to range-bound growth in the production of natural fibre on the one hand and the availability of MMFs and its close affiliation to fashion-oriented products on the other. The emergence of technical textiles as an important segment and its positive correlation to MMF has further strengthened the domination of MMF as a key ingredient for growth of the textile and apparel industry in the future. The favourable demand condition and growing preference pattern along with high performance characteristics of MMF-based products have also helped this segment to increase its share in the global production and trade of textiles from 32% in 1970 to 72% in 2017 (ITC Trademap). It is expected that the production and trade of MMF-based textiles will further grow in the world and act as a major driving force for the industry in the future. Countries having a robust manufacturing base in MMF textiles are expected to excel and strengthen their position in the global market as compared to other or natural fibre-based products.
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