India has set an ambitious target to elevate its textile and apparel (T&A) exports from $34.8 billion in 2023-24 to an eye-popping $100 billion by 2030. This raises a critical question — is this lofty ambition grounded in reality or is it just a daydream? If we look at the long-term trends, India’s T&A exports have grown steadily from $11.5 billion in FY2001 to $34.8 billion in FY24, accounting for only a 4 per cent share in global exports of $774.4 billion. At this pace, achieving the $100 billion target by 2030 seems a tall order unless dramatic, game-changing reforms are introduced.
Delving deeper into the numbers, the apparel segment (HSN codes 61 and 62) within overall T&A exports comprises about 42 per cent. It rose from $5.5 billion in FY2001 to $14.5 billion in FY24. Its share in global apparel exports has remained stubbornly around 3 per cent over this entire period. Meanwhile, competitors like Bangladesh and Vietnam have surged ahead. Bangladesh’s global share has grown from 2.2 per cent to 9.6 per cent, while Vietnam’s share jumped from 1 per cent to 5.8 per cent between 2000 and 2023 (see infographics). A significant portion of this shift occurred post-2010 when China’s global market share slipped from 34.8 per cent to 29.8 per cent, partly due to its trade war with the US. So, what is preventing India from seizing this opportunity to expand its apparel exports and capture the market space left behind by China? India should not only focus on apparel exports, but the exports of the entire T&A sector if it is to achieve its target of $100 billion . For this, let us dig into the challenges that lie ahead in the textile value chain — from farm to foreign.
At the farm level, what we know is that Prime Minister Atal Bihari Vajpayee took a bold decision to introduce genetically modified (GM) Bt cotton hybrids in 2002. As a result of this policy change, India’s cotton production surged from 13.6 million bales in 2002-03 to 39.8 million bales by 2013-14, a 193 per cent increase. This “gene revolution” increased productivity by 87 per cent — from 302 kg/hectare in 2002-03 to 566 kg/hectare in 2013-14. The area under cotton cultivation also expanded by 56 per cent. However, since 2014, cotton production has been gradually declining, with output projected to fall to 30 million bales in 2024-25, the lowest in 15 years! India is likely to become a net importer of cotton, with imports reaching 2.6 million bales, surpassing exports of just 1.5 million bales in the marketing year 2024-25. This marks a significant decline from peak exports of 11.7 million bales in FY14. This debacle is largely caused by not allowing the next-generation herbicide tolerant (Ht) Bt seeds to come into India, despite clearance by the apex Genetic Engineering Appraisal Committee (GEAC) under the Ministry of Environment, Forest and Climate Change.
While India’s textile industry uses a variety of fibres, cotton-to-man-made fibre (MMF) ratio (60:40) contrasts with the global average of 30:70, highlighting a shift towards man-made fibres. India has over 1 lakh garment factories, but most of them (about 80 per cent) are in the decentralised sector. Its exports are way below its potential. Slow adoption of modern technology and weak value chain integration are key barriers. The global apparel market is expected to reach $2.37 trillion by 2030, presenting a major opportunity. While the Pradhan Mantri Mega Integrated Textile Region and Apparel (PM-MITRA) scheme aims to develop integrated textile parks, high land requirements exclude MSMEs, limiting its reach.
To overcome the challenges and achieve the ambitious target of T&A exports by 2030, India must adopt a strategic approach and implement bold policy reforms.
First, India’s garment sector needs to transition into a fashion-driven industry. To support this transformation, it is crucial to incentivise and invest in MMF-based apparel while removing non-tariff barriers, such as the quality control orders on MMF. In 2024, raw materials for MMFs — such as polyester and viscose — were significantly costlier in India by about 20 percent compared to our competitors like Bangladesh, China and Vietnam.
Second, the PM-MITRA scheme must be fast-tracked to create integrated textile hubs, which will enhance scalability and efficiency in fabric and garment manufacturing.
Third, negotiating Free Trade Agreements (FTAs) with the EU and the US — key markets that account for nearly 66 percent of India’s apparel exports — could offer a substantial boost. Currently, these markets impose tariff rates of 9.7 per cent and 11.47 per cent, respectively, on Indian apparel. In contrast, the EU offers zero-duty access to Bangladesh under the “GSP Everything but Arms” arrangement (signed in 2001) and imposes a 1.66 per cent tariff on Vietnam’s apparel exports under the “EU-Vietnam FTA” (2020). This creates a competitive disadvantage for Indian exports. So, fast-tracking trade negotiations is essential. Additionally, India should explore emerging markets like Japan, Russia, Brazil, and South Korea, which offer significant opportunities for products like women’s western wear, intimate wear, swimwear, and outerwear.
Fourth, improving cotton productivity and fibre quality is a critical step. India’s significant advantage lies in its strong base of natural fibre production, particularly cotton, which is underutilised. Streamlining the approval process for GM crops and establishing a single-window clearance system will speed up the adoption of high-yield, pest-resistant, next-generation cotton varieties. Furthermore, expanding irrigation, promoting high-density planting techniques, and investing in precision farming will help India bridge the productivity gap (435 kg/hectare) with global leaders like China (1,945 kg/hectare) and Brazil (1,839 kg/hectare).
By addressing these critical areas, India may position itself for a much-needed leap in T&A exports, moving slightly closer to its ambitious target of $100 billion by 2030. But, this is feasible only if the Modi government embraces these bold reforms. Else, it will remain a daydream.
Gulati is distinguished professor, Juneja is research fellow and Rao is senior fellow, ICRIER. Views are personal
