How The Cotton & Handloom Industry Is Booming
Business Of Fashion|August 2021
The handloom industry is a very critical component of the Indian economy due to its noncapital intensive nature, great potential for exports, the attraction of foreign currency and direct ties with the rural economy.
Nidhi Yadav, Founder, AKS Clothings

India is not only the second-largest manufacturer of textiles and garments in the world but is also the fifth-largest textile exporter including apparel, technical products and home use fabrics. This industry contributes ~2.3 per cent to the GDP of India, ~12 per cent to national exports and ~13 per cent to the total industrial production of the country. The success and vastness of the Indian textile industry mean that it provides employment to a large number of people. According to the India Brand Equity Foundation (IBEF), 45 million workers are employed by the textile industry and 3.5 million of them are handloom workers.

The 4th All India Handloom Census of 2019-20 suggests that a large majority of the handloom workers are women and they belong to the age group of 18-35 years. Many of them are engaged in pre-loom and post-loom activities and do it for an additional source of income apart from doing household chores. A large chunk of the handloom workforce hails from underprivileged backgrounds and was therefore severely impacted by the arrival of the pandemic last year. The effect is only temporary.

The handloom industry is a very critical component of the Indian economy due to its non-capital intensive nature, great potential for exports, the attraction of foreign currency and direct ties with the rural economy. Moreover, other sectors such as logistics, finance and marketing also benefit significantly from the operations of the textile industry.

The sector is creating more jobs not just in the rural areas but also in the urban and semi-urban parts of India. With ~95 per cent of the total global production of handwoven fabric being exported from India, our strong dominance has been long established. In FY20, Indian textile and apparel export value stood at USD 33.8 billion and is expected to double by FY26.

~15 per cent of the cloth production in the country is attributable to the handloom sector. Major importers of Indian fabrics include UK, Germany and Italy. The Indian apparel market was valued at USD 40 billion in 2020 and is set to grow to a whopping USD 135 billion by 2025. India’s textile and apparel industry is poised to grow to a valuation of USD 190 billion by FY26. (Source – IBEF)

Cotton Production is on the Rise: India is the largest producer of cotton in the world with cotton production for 2020-21 touching ~360 lakh bales (According to The Cotton Association of India or CAI) which is ~26 per cent of the total cotton production in the world. This growth was driven by an increased output of 150,000 bales from northern parts of India. Higher international prices of cotton as compared to that in India are expected to improve the exports to ~60 lakh bales this season.

In the calendar year 2020 (CY2020), the Cotton Corporation of India (CCI) reached a record procurement number of ~151 lakh bales under the Minimum Support Price (MSP) operations. This is a massive 290 per cent jump over the 38.43 lakh bales procured during the same time last year! Cotton yarn, which is a major segment in FY2020, constituted over 54 per cent share in the total yarn production.

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