Leather & Textiles

Leather & Textiles

Textile

The textile industry contributes about 2.3% to India’s GDP. India is the largest global producer of cotton and jute and the second-largest producer of silk and man-made fibers in the world. The textiles sector has witnessed a spurt in investment during the last five years. It enjoys a comparative advantage in terms of skilled manpower and cost of production relative to major textile producers.

Increased penetration of organised retail, favorable demographics and rising income level are driving demand for textiles. India has abundant availability of raw materials such as cotton, wool, silk and jute. It is also the second-largest employment provider after the agriculture sector. As of 2019, it provided direct employment to 45 million people and 60 million people in the allied industries.

 Market Dynamic and Sector composition:

  • Domestic textiles & apparel market  – US$ 100 billion in FY19. 
  • Production of raw cotton                   –  36.04 million bales in FY20. 
  • Production of fibre                             – 1.60 MT in FY20 (till January 2020) 
  • Production of yarn                             – 4,762 million kgs in FY20 (till January 2020)

The government of India has also allowed 100% FDI in the sector under the automatic route. In effect, it has attracted FDI worth US$ 3.45 billion from April 2000 to June 2020. About 348 technical textile products have been developed according to the Bureau of Indian Standards (BIS) as of 2019.

The industry has contributed about 12% to India’s total export earnings. It is expected to reach exports estimating at US$ 62 billion by 2021. Out of these exports, about 43% are exported to the biggest consuming markets such as Europe and the US. Whereas, about 17% of the exports are to China, UAE and Bangladesh.

India’s export to FDA partner countries:

  • Bangladesh Cotton Yarn             31% Share
  • Indonesia Cotton Textile             48% Share
  • Vietnam Cotton Textile               79% Share
  • South Korea Cotton Yarn            30% Share
  • Japan Apparel                              51% Share                           
  • China Cotton Textile                   82 % Share

The entry of several international players in the retail sector has boosted production in the textile industry. With increasing disposable income and growing domestic demand, the industry will continue to flourish. Owing to the diverse taste and preference of the Indian culture, the textile sector needs to keep iterating to keep up with the growing demand. The industry has a unique linkage to the traditions of the country and thus, it’s capable of producing a wide variety of products suitable for different market segments, both within and outside the Indian market. 

Leather 

The Indian leather industry estimates about 13% of the world’s leather production of hides/skins and employs over US$ 4.42 million people within the nation. India’s domestic leather market accounts for US$ 12 billion. It is the second-largest producer of footwear and leather garments. India is also the second-largest exporter of leather garments and third-largest exporter of saddlery & harnesses. Total leather good exports from India stood at US$ 2.27 billion during April-August, 2019.

The major international market share for Indian Leather & Leather Products are:

USA with share of 17.22%, Germany 11.98%, U.K 10.43%, Italy 6.33%, France 5.94%, Spain 5.01%, Netherlands 3.52%,U.A.E 3.35%,China 2.61%, Hong Kong 2.15%, Belgium 2.21% Poland 2.11%

The major production centres for footwear, leather and leather products in India are located in Tamil Nadu, West Bengal, Uttar Pradesh, Maharashtra, Punjab, Karnataka, Telangana, Haryana, Madhya Pradesh, Kerala, Rajasthan, Jammu & Kashmir. 

Total exports of footwear, leather and leather products from India reached US$ 5.74 billion in the FY 2017-2018 and US$ 5.07 billion in the FY 2019-2020.

  • Footwear US$ 2.6 Billion
  • Leather Garments US$ 429 Million 
  • Finished Leather US$ 524 Million 

Export segmentation:

  • Footwear 51.77%
  • Leather Goods & Accessories 26.44%;
  • Finished Leather 10.34%;
  • Leather Garments 8.46% 
  • Saddlery & Harness 2.99%

The demand growth is primarily fueled by the fashion industry, especially footwear. The furniture and interior design industries are secondary growth drivers. Apart from this, the automotive industry also demands leather for their intermediate consumption. 

India has a strong and eco-sustaining tanning base. It has world-class institutional support for Design & Product Development, HRD and R & D that have led to continuous modernization and technology up-gradation. The ancient presence of the leather products in the European market have also helped drive demand. Its strategic location in the Asian landmass has aided in developing an excellent export system.

Furthermore, India being the second largest employer in the textile industry provides constant human resource development programmes to enhance productivity. Owing to the huge population of India, the skilled/trained manpower is also available at competitive wage levels.

Moreover, India is home to the largest livestock in the world. This translates into the ready availability of raw materials. Therefore, it’s no surprise that India is home to 20% of the world’s cattle and buffalo population and 11% of the world’s goat and sheep population.. With institutional support, huge domestic market and high growth potential for exports, the industry is expected to prosper for a long time.