MAGNUM Blog

The textiles and apparel industry in India has strengths across the entire value chain from fiber, yarn, fabric to apparel. It is highly diversified with a wide range of segments ranging from products of traditional handloom, handicrafts, wool and silk products to the organized textile industry. The organized textile industry is characterized by the use of capital-intensive technology for mass production of textile products and includes spinning, weaving, processing, and apparel manufacturing.

The domestic textiles and apparel industry contribute 2.3% to India’s GDP, 7% of the country’s manufacturing production and 13% of the country’s export earnings.

The textiles and apparel industry in India is the second-largest employer in the country providing employment to 45 million people. It is expected that this number will increase to 55 million by 2020.India has also become the second-largest manufacturer of PPE in the world. More than 600 companies in India are certified to produce PPEs today, whose global market worth is expected to be over $92.5 bn by 2025, up from $52.7 bn in 2019.FDI in the textiles and apparel industry has reached up to $3.4 bn during 2020Exports in the textiles and apparel industry are expected to reach $300 bn by 2024-25 resulting in a tripling of Indian market share from 5% to 15%Further, the domestic consumption of $100 bn was divided into apparel at $74 bn, technical textiles at $19 bn and home furnishings at $7 bn. While exports comprised of textile exports at $20.5 bn apparel exports at $16.1 bn and handlooms at $3.8 bn.

Cabinet approves MoU between India and Japan for cooperation in the field of good quality textiles.

GROWTH DRIVERS: ֎ Abundance of raw material ֎ Presence of entire value chains ֎ Competitive manufacturing costs ֎ Availability of skilled manpower ֎ Large and growing domestic market ֎ preferences for brands ֎ Organized retail landscape & e-Commerce ֎ Increased focus on technical textiles due to growth of end-user industries such as automotive, healthcare, infrastructure and oil and petroleum.

Road Ahead

Make in India advantage for companies. The growth in near term would be flat but once the Economy starts normalizing the growth could be expected between 6-7% going forward. Huge opportunity for Exports and domestic consumption, Sustainable outlook for this sector.

BENEFICIARIES : KEI Industries Limited Polycab India Limited Finolex Cables Limited V-Guard Industries Pvt. Ltd. KEC International Limited Havells India Ltd. Sterlite Technologies Ltd.

The growing demand for power, light and communication has kept a high demand for cables and wires, which constitute roughly 40% of India’s electrical industry. Wires and cables play a vital role in every aspect of infrastructural growth and finds extensive usage and applications across a number of industries.

Wire and cables demand directly dependent on the growth of the manufacturing industry and infrastructure in the power, telecommunications, residential and commercial sectors. The government’s initiatives on various fronts like – Renewable power, Housing, Automobile, infrastructure and digitization (Railways, Roadways, Warehousing, Logistic Parks, Smart Cities) are sure to generate a lot of business for the wire and cable industry in foreseeable future.  The Transmission and Distribution sector continues to remain in focus, especially, with the outlay of Rs. 2.6 lakh crore announced by the Government for the five-year period ending FY2022. There is also a sharper focus on high voltage transmission lines along with the Government’s aims to provide 24×7 power, which is opening up opportunities in the sector. DISCOMS which have joined the UDAY scheme are expected to improve their T&D infrastructure through renewed investments. The government’s target of generation of 100 GW of solar energy by 2022 and measures such as excise duty exemption for ferro-silicon magnesium used for manufacturing components for wind-operated electric power generators have augmented the demand for electrical wires and cables.

The Indian power sector has an investment potential of INR 15 trillion (USD 225 billion) in the next 4–5 years. Also, the government is planning to achieve targets of tripling per capita power consumption in India which would require an additional 455 GW of installed capacity along with significant investments and operational improvements in T&D networks.

The Govt. plans to spend INR 850,000 crore in the next five years to modernize Indian Railways. The Cabinet cleared the INR 82,000 crore (USD 12.3 billion) dedicated freight corridor for decongesting existing network. Further, rapid urbanization, is boosting demand for wires and cables in the residential & commercial buildings and power distribution sectors.

Indian automotive sector is one of the world’s biggest. Around 7.1% of the gross domestic product (GDP) in the country is in the sector. India is also a major car exporter and has powerful expectations of export growth in the near future. The rising demand for low-voltage wires in electrical installations of automobiles is another factor adding to the growth of the market.

Road Ahead

The growth going forward can be expected to grow at 13-15% over next 5 years. The Development pace in INDIA to outperform so would this sector benefit from the same.

BENEFICIARIES : KEI Industries Limited Polycab India Limited Finolex Cables Limited V-Guard Industries Pvt. Ltd. KEC International Limited Havells India Ltd. Sterlite Technologies Ltd.