India has arrived. The global economy’s perception towards the country has changed dramatically over the last thirty years, and rather drastically in the last five. In the 90s, when Rajiv Gandhi unleashed the Liberalisation, Privatization and Globalization policies under the guidance of the then Finance Minister and former Indian Prime Minister, Manmohan Singh, it was evident that the country was looking for some serious FDI. In the last five years, the perception changed further as more and more Indians appeared on the boards of successful startups, artists got global recognition and the small and medium sized service sector began to meet global standards and, more importantly, expectations. In spite of such a searing performance, the country continues to languish when it comes to the most important prerequisite for a healthy economy, a strong manufacturing sector.
Today, the transformation has begun in full throttle. The new government brings hopes of a manufacturing revival with a rather brave campaign that advocates consumption of products made in India. At the heart of this campaign lies an assurance that this is perhaps the best time to invest and manufacture in the country. The Make in India campaign is therefore one of the most ambitious yet logical strategy that aims and promises to boost manufacturing in the country. It is clear that the thrust will be on the small and medium scale companies while there will be significant efforts to make the atmosphere m ore manufacturing friendly.
What this means for apparel manufacturing
The textile industry in India has witnessed a number of ups and downs in the last ten years. In spite of the high demand being directly proportional to the population growth, the growing dispensable incomes, rapid westernization of tier II and tier III regions and the fact that India is one of the largest growers of cotton in the world, there appeared several cracks within the industry that required government intervention and significant debt restructuring. Without digging deep, it is evident that the only possible reason for the sector to not thrive in spite of the positive conditions is that the manufacturing segment might have been struggling due to the highly regulated and unfriendly environment. With Make in India, the new government has taken several initiatives that address the issues faced by manufacturing at its very root.
The scope, opportunity and initiative
Estimates published on the Make in India website indicate strong growth opportunities and significantly fast growth rate in terms of total fabric production, fiber production and export. The total size of the industry is expected to grow to $100 billion by 2016-17 from the present $67 billion. Textile and apparel exports are expected to rise by a strong $25 billion by 2016-17 from the present $40 billion. The total fabric production is also expected to close to double in the period with the present figures at 64 billion square meters and 2016-17 numbers expected to be around 112 billion square meters. Total fiber production is expected to grow from $7 billion in 2013-14 to $10 billion in 2016-17.
The recent Annual Budget saw the government take several measures to boost the textile and garment sector. Not only were new budgets allocated but there were also several infrastructure development initiatives that will be critical to the growth of the textile and garments sector in India.