India’s textiles and apparel industry can become a global leader and job creator with bold reforms, argues India’s G20 Sherpa and ex-NITI Aayog CEO. Key steps include removing duties on MMF and cotton imports, scrapping non-tariff barriers, boosting manufacturing through PM-MITRA parks, enhancing cotton productivity, and fostering technical textiles. Collaboration with leading firms can replicate the success of mobile manufacturing, creating 10 million jobs by 2030. Strategic policy action is vital to triple textile exports to ₹9L crore and secure global competitiveness.
Credit: India’s G20 Sherpa and former CEO of NITI Aayog and Times of India
With Trumpʼs return to White House, we are undergoing geopolitical reconfiguration. Trade-wise, his administration is doubling down on tariffs and economic nationalism. While this poses challenges, it is also a massive opportunity for India – if we get our policies right. If we deliver a manufacturing liftoff by implementing bold policy reforms in sectors such as textiles & apparel, food processing, and cleantech.
The textiles & garments industry, in particular, has the potential to add tens of millions of manufacturing jobs in India. Unlike capital-intensive sectors such as auto or pharma, it has relatively low barriers to entry. It also provides a platform for small- and medium-sized enterprises to flourish, thereby promoting inclusive growth. However, India has not been able to harness its potential fully.
Globally, 70% of the textiles & garments market comprises manmade fibres (MMF), and the rest 30% consists of cotton. In India, it’s the other way around. Raw material for MMF, and the rest 30% consists of cotton. In India, it’s the other way around. Raw material for MMF is either polyester fibre or viscose fibre, both produced by just two large Indian conglomerates. Fibre is turned into yarn, yarn into fabric. This fabric is processed, then garments created for the domestic market or exported.
We are the world’s sixth-largest exporter of textiles & apparel, with our textile exports reaching ₹3L cr. As PM said at Bharat Tex 2025, our ambitious goal is to triple this figure to ₹9L cr by 2030. However, this will not be possible without concerted policy action.
* First, we must address our lack of competitiveness at the raw material stage, especially in the MMF market. Raw materials, polyester and viscose, are subjected to high import duties. Earlier, they were also subjected to high anti-dumping duty removed after concerted efforts. But this duty has now been superseded by quality control orders (QCOs).
These have the same effect, restricting the import of cheaper, critical raw materials. Raw materials for MMF are about 20% more expensive in the domestic market, as compared to our competitors. This cost disadvantage gets compounded as we move down the value chain. To make our MMF industry globally competitive, all import duties must be brought down to zero and QCOs scrapped.
* Second, we must address the source of the lack of scale. Prime Minister Mega Integrated Textile Region and Apparel (PM-MITRA) Parks Scheme was launched to address this lack of scale. Seven such parks have been announced, with an outlay of ₹4,500cr, and they’re expected to bring in investments of ₹10,000cr each. Development of these parks must be accelerated, ensuring that the entire value chain for the garments & textiles industry is consolidated here. Similarly, a Production Linked Incentive (PLI) was announced, with an outlay of $1bn.
* Third, we must raise the productivity of cotton. India is one of the biggest producers of cotton in the world. But per World Cotton Statistics, cotton yield in India is around 450 kg/hectare while the global average is 812 kg/ha. In countries like Brazil and Australia, cotton productivity ranges from 1,500 to 2,200 kg/ha.
Union Budget 2025-26 announced a five-year Mission for Cotton Productivity. This must be implemented speedily. Cotton imports in India are also subject to 10% import duty, which must be removed to make cotton garments more competitive. Pricing in the cotton import market must be market-determined rather than govt-determined. Despite being the largest producer of cotton, China still allows cotton imports.
* Fourth, we must unlock the potential of technical textiles. Their applications span agriculture, construction, automobiles, healthcare etc. The National Technical Textiles Mission was launched to promote the technical textiles sector in India. However, their penetration in our markets remains well below international standards. Strengthening domestic manufacturing, fostering sustainability through recycling initiatives, and building global branding will be key.
* Fifth, we must work with leading firms to develop the domestic manufacturing value chain. Strategic policy measures can lead to significant strides in our manufacturing sector. We have witnessed India’s triumph in mobile manufacturing. From a mere $0.2bn worth of exports in 2014-15, we are now exporting over $15bn worth of mobile phones. From negligible levels in 2017, nearly 15% of all iPhones are now made in India. The recent news of domestically produced components of Apple products being exported to countries such as Vietnam and China is a testament to our potential. Just as we have done in the case of mobile phones and electronics, we must initiate policy changes to create vast number of jobs in the textile sector.
India’s garments industry has the potential to become a global leader and the biggest job creator, but bold reforms are essential. To recap, first, import duties on raw materials for MMF and cotton must be eliminated entirely. Second, all non-tariff barriers, in the form of QCOs, must be scrapped. Third, manufacturing scale must be achieved by consolidating the value chain and leveraging PM-MITRA. Fourth, cotton productivity must be raised, and cotton pricing must be made market-based. Fifth, we must work with and invite lead firms to set up manufacturing in India, as we have done in the case of mobile manufacturing.
The success of mobile manufacturing demonstrates that India can compete on the global stage with the right policies in place. We must target the creation of 10mn new jobs in this sector. It is time to act decisively and establish India as the world’s textile and apparel leader.
The writer is India’s G20 Sherpa and former CEO of NITI Aayog.
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