Texcon 2014

Theme Presentation

Role of Indian Textile and Apparel Industry in

Changing Global Supply-Demand Scenario
Prashant Agarwal
Joint Managing Director, Wazir Advisors
15th October 2014

Defining Role of Indian Textile and Apparel Industry

How big is the

global market?

Where does
India stands
today vis--vis
competition?

What are the

emerging
sector trends?

What it means
for Indian
textile sector?

A. Overview of Global Market

Current global consumption of apparel is estimated at US$ 1.15

trillion
Global Apparel Consumption
Canada
US$ 30 bn.

Russia
US$ 45 bn.

EU
US$ 355 bn.

China
US$ 165 bn.
USA
US$ 230 bn.

Japan
US$ 110 bn.

India
US$ 46 bn.

Brazil
US$ 60 bn.

Australia
US$ 25 bn.

Rest of the World

US$ 80 bn.
2013 Market Numbers
4

Source: Wazir Advisors

Global Trade of Textiles & Apparel stands at US$ 781 bn.

From 2008 to 2013, the global textile & apparel trade has grown at a CAGR of 4%

Global Textile & Apparel Trade

Values in US$ Bn.

4% CAGR

643

751

728

2011

2012

781

642
558

2008

Data Source: UN Comtrade

2009

2010

2013

Apparel market size will touch US$ 2.1 trillion by 2025

Projected Apparel Market Size and Break-up
Market share 2025

Values in US$ Bn.

Region

2013

2025

CAGR

EU-27

355

440

2%

USA

230

285

2%

China

165

540

10%

Japan

110

150

2%

Brazil

60

100

5%

India

46

200

12%

Russia

45

105

8%

Canada

30

50

4%

Australia

25

45

5%

Rest of the world

80

195

8%

1,146

2,110

5%

Total

Source: Wazir Advisors

Australia
2%
Canada
Brazil 2%

RoW
9%

China
26%

5%
Russia
5%
Japan
7%
India
9%

EU-27
21%
USA
14%

B. Indias Positioning

India became second largest exporter of textile & apparel in the

world in 2013
India has a share of approx. 5% of global textile and apparel trade.
Indias trade has grown at 9% per annum from 1995 to 2013 while global trade during
this period has grown at 5% per annum.

Global Trade and Indian Exports of Textile & Apparel

Values in US$ Bn.

781

728
642
504
363
304

CAGR: 9%
8
1995

11
2000

17
2005

India Exports
8

Data Source: UN Comtrade

27
2010

Global Trade

33
2012

40
2013

Current Indian domestic consumption of textile and apparel is

estimated at US$ 63 bn.
Indian Domestic
Textile & Apparel
Market
US$ 63 billion

Apparel

Home Textiles

Technical Textiles

US$ 46 billion

US$ 4 billion

US$ 13 billion

Indian Domestic Textile & Apparel Consumption

11% CAGR

34

38

25

27

7
2
2007

8
3
2008

Source: Wazir Advisors

43

31
9
3
2009
Home Textile

49

35
10
4
2010
Technical Textile

55

40

11
4
2011
Apparel

Values in US$ Bn.

61

63

45

46

12
4

13
4

2012
Total

2013

Indias Key Advantages

Market and Manufacturing Ecosystem
Raw Material Availability

Government Support
for Textile Sector

Key
Strengths

Inexpensive Trained
Manpower

Presence of Complete
Textile Value Chain
10

C. Emerging Sector Trends

Higher growth of synthetic fibre based categories

Globally polyester consumption is growing & will continue to grow further
Global Fibre Consumption Trend
37%
36%
27%

43%
36%
21%

2000

59%

44%

46%

48%

36%

35%

33%

20%

2007

19%

2008

2009

Cotton

19%

2010

Polyester

52%

50%

50%
31%

31%

19%

18%

2011

2012

30%

Widening
gap
27%

18%

2020 (P)

14%
2030 (P)

Others

But Indian textile industry is still Cotton focussed

Indian Fibre Consumption Trend
60%

59%

59%

59%

58%

56%

55%

34%

35%

35%

35%

36%

37%

38%

6%

6%

6%

6%

6%

7%

7%

2000

2007

2008

2009

2010

2011

2012

Cotton
12

Data Source: PCI Fibres, Fibre Policy 2011 and Wazir Analysis

Polyester

Others
Continued

Higher growth of synthetic fibre based categories

Indias presence is insignificant in some of the major MMF based product categories
Indian exports needs to be focused on following MMF based product categories, which can give an exponential growth
to the Indias T&A exports.
Indias Trade Share in Top Traded MMF based Apparel Categories (2012)
End user

Type

Total Trade
(US$ Bn.)

Indian Trade
(US$ Bn.)

Share

Knitted

18.05

0.03

0.20%

Overcoats, capes, cloaks, wind-cheaters, etc.

M/B

Woven

6.58

0.001

0.02%

Overcoats, capes, cloaks, wind-cheaters, etc.

W/G

Woven

5.94

0.001

0.02%

Dresses

W/G

Woven

5.1

0.35

6.90%

Trousers, bib and brace overalls, breeches and shorts

M/B

Woven

4.85

0.07

1.40%

Blouses, shirts and shirt-blouses

W/G

Woven

4.3

0.37

8.60%

Dresses

W/G

Knitted

4.07

0.06

1.50%

Category
Jerseys, pullovers, cardigans, waistcoats

Consumption of Polyester based products will increase in domestic market as well

13

Major Trends

Focus Sector

Increasing women participation in workforce

Western office wear

Increasing awareness towards fitness

Active-wear/ sportswear

Awareness of Indian women towards health and hygiene

Women hygiene product

Indias emergence as global automobile manufacturing hub

Technical textile products

Stricter compliance norms towards workers health and safety

Protective wear products

Data Source: UN Comtrade

Note: M/B Mens/Boys; W/G Womens/Girls

Supply base consolidation by buyers

There is clear trend of consolidation in global textile and apparel trade, where fewer
and fewer countries are having share of some significance in total trade.
In US and EU markets also, the concentration of textile and apparel imports has
increased with top 10 supplier countries reaching 78% and 84% respectively in 2013.
China & HK
Italy
Germany
USA
Korea
France
Belgium
UK
Japan
Turkey
India
Others

Countries having more than 3% Share in Global Exports

23%
9%
8%
6%
6%
4%
4%
3%
3%
3%
3%
29%

China & HK
Italy
USA
Germany
Korea
France
Mexico
India
Belgium
Turkey
Others

1995

24%

China & HK

29%

China & HK

38%

China & HK

39%

7%

Italy
Germany
USA
Turkey
India
France
Belgium
Korea
Others

7%

Italy

5%

India

5%

Germany

5%

Italy

5%

India

4%
Germany

4%

6%
5%
5%
3%
3%
3%
3%
3%
38%
2000

5%
4%
4%
3%
3%
3%
3%
39%
2005

USA

4%

Turkey

4%

Turkey

4%

Others

40%

Others

43%

2010

Buyers are now seeking for long term arrangement with fewer suppliers
14

Data Source: UN Comtrade

2013

Trade agreements to play an important role

2nd

2nd

Values in US$ Bn.

Vietnam has emerged as the

largest
apparel supplier to US

Bangladesh has become

largest nonEuropean apparel supplier to EU market

US Apparel Imports from Vietnam

Bangladeshs Apparel Exports to EU-27

After FTA
53%

12,234
8,126

11%
7,819

4,359

Before FTA
19%

3,264

17

48

1995

2001

2007

2013

India trade has also significantly grown

after IJCEPA
Indias Textile and Apparel Exports to Japan
After CEPA
11%

Before CEPA
5%

423

Fabric
308
221

231
85
16
4
19
35
72
2004-05
15

Apparel

145

Fibre
Made Ups

21
4
21
32
84

25
5
42
48
82

2010-11

2013-14

Others
Yarn

2000

4,458

2005

2010

2013

Another FTA on the horizon - TPP

United States is negotiating for Trans Pacific
Partnership (TPP) agreement with 11 other
countries throughout the Asia-Pacific region.
The inclusion of a significant apparel
producer, Vietnam in this free trade
agreement will provide it with great
advantage in markets of Canada, Australia
and Japan.

Total

Data Source: Office of Textile and Apparel (OTEXA), Eurostat and Ministry of Commerce, Govt. of India

D. Way Ahead

Way Ahead
Growing Indian economy will lead to higher domestic demand.
Flexibility and long term partnership with retailers will be new success mantra.
For exports, establishment of larger, integrated set-ups will be required.
Collaboration between SMEs and larger units as their market front end.

Invest big and take advantage of Make in India focus

17

Thank you for your attention!