Indian textile industry is the second largest in the countrywith regards to employment generation, next to agriculture. It contributessignificantly to national output, employment, and exports of the country. Apartfrom China, the country's textile sector is matchless in size, andcompetitiveness. Textile sector in India is expected to reach $110 billion by2015. This includes a $45 billion of exports. Growth rate of the textile sectoris estimated to be around 8% per annum. To sustain its growth ratio, Indian textileindustry requires an investment of $24 billion by 2015. This comprises of thedomestic investment of $18 billion, and FDI of $6 billion.


The reasons of this vibrant growth are manifold. The countryhas a complete supply chain starting from raw material supply to superiorquality of finished products. Availability of skilled and cheap labor isabundant. The industry encompasses experienced entrepreneurship, and designskills, which are tough for the competing countries to match.


Textile ministry aims to improve foreign investment. Germany, France, and Switzerland are identified as prospective countries ideal for investing in India. The Government is now exploring investment opportunities in potential countries like Japan. A trade delegation is proposed to explore the potential opportunitiesin Italy, Turkey, and Switzerland. Textile Minister Mr. Dayanidhi Maran hasexpressed positive hopes of attracting 20% of the expected $6 billion FDIduring 2009-10.


India has been and is liberal and transparent with regards to its FDIpolicies. Investment in textile units by foreign countries does not require anyprior approval either by the Government or by the Reserve Bank of India. The FDI cell set up by the Ministry of Textiles assists the investing countries byproviding assistance and advisory support with other organizations. It monitorsdata relating to domestic textile production, and foreign investments. It aidsthe foreign companies in solving their operational problems, and assists themin locating joint venture partners.


With the advent of recession, there was a drastic fall inthe export figures during the last fiscal. With possible opportunities for FDI,textile ministry is trying to explore new and profitable investmentopportunities. Investments are expected in fabric manufacturing, textilemachineries, technical textiles, and man made yarn and fibers. Renownedinternational brands are eyeing opportunities in India comparatively over itscounterparts. Brands such as Carrefour, Decathlon, H&M, JC Penney, Gap,Levi Strauss, Metro Group, Nike, Target, Tommy Hilfiger, Tesco, Marks areSpencer, and Wal-Mart are a few to name. These key international players arepredicted by industry analysts to look towards India for their sourcingrequirements.


Textiles and handicrafts made in India are exported to morethan 100 countries worldwide. Ready made garment sector is the largest in thecountry, comprising 41% of the total textile exports of the country. Domestic,organized retailing in India showed a growth rate of 13-14% for the year endedMarch 2009. Apparel is the second largest retail sector in India. Domestic apparel retailing is estimated to be around $2.7 billion USD. With positiveforeign investments, the textile and apparel sector can see a skyrocketinggrowth.


Presently Government polices have changes a lot regardinginvestment opportunities. With the country opening its doors to the outsideworld, foreign direct investment opportunities can be transformed intoprofitable opportunities.


References:

  1. &sec=article&uinfo=<%=server.URLEncode(2185)%>" target="_blank">http://iitrade.ac.in
  2. &sec=article&uinfo=<%=server.URLEncode(2185)%>" target="_blank">http://www.business-standard.com
  3. &sec=article&uinfo=<%=server.URLEncode(2185)%>" target="_blank">http://texmin.nic.in
  4. &sec=article&uinfo=<%=server.URLEncode(2185)%>" target="_blank">http://www.dnaindia.com