The global apparel consumption in 2021 is estimated to be around $1.5 trillion. India’s textile and apparel market has the potential to swell to $250 billion by 2025-26, up from an estimated size of $ 153 billion in 2021, says a report by Federation of Indian Chambers of Commerce & Industry and retail consultancy Wazir Advisors
Global Apparel Market
The global apparel consumption in 2021 is estimated to be around $1.5 trillion. The market recovered by approx. 16% compared to 2020. It is estimated to reach $2 trillion by 2025 growing at a CAGR of 4% from 2019. In 2021, the US was the largest apparel consumer market, worth $257 billion with a growing CAGR of 5%. EU-27 has declined at a CAGR of 11% in 2021 post-Covid impact and stood at $211 billion. China, the 3rd largest market in the world, grew marginally from 2019, due to pandemic, however, is expected to grow with 11% CAGR (highest among all markets) and becomes the largest apparel market, worth $340 billion by 2025. Other major markets include Japan, India, Brazil and Canada.
The report, titled Building a Roadmap for $ 250 Billion Sustainable Textile Industry, indicates that that growing economies such as China, India are growing at much higher rates then developed regions owing to the growing domestic market and increasing disposable income. Together these market account for 59% of the total apparel market while rest of the world accounts for remaining 41% share.
Global T&A Trade
According to the report, the global textile and apparel (T&A) trade in 2021 was $869 billion. The trade showed a significant recovery of 22% post-Covid and a 2% growth over 2019. Apparel was the largest traded segment accounted for 57% of the total trade and stood at $492 billion, followed by fabric with 13% share. The trade is projected to grow at CAGR 3% and reach $ 1000 billion by 2025 with apparel being the largest traded category, worth $573 billion.
China is the largest supplier of T&A in the world with 37% share followed by Bangladesh with 5% share. India is the 4th largest supplier in the world with 5% share and exports worth $42 billion. Vietnam and Poland have registered the highest CAGR of 10% each followed by Bangladesh with CAGR8% since 2010. India on the other hand is growing moderately at CAGR 4%. Since, 2010, China has lost 4% share in the global apparel trade whereas Bangladesh and Vietnam have gained 3% share each. India’s share remained stagnant during the same period.
Focus on Sustainability
The report claims that sustainability has grown from being just a buzzword to a crucial factor in shaping the industry. The global textile industry is amongst the most polluting industries and the environmental concerns facing the textile sector are significant. However, to counter and control the negative effect, textile companies worldwide are taking significant corrective measures with the ultimate aim of becoming a green and sustainable industry. These measures include controlled use of natural resources like water and energy in production processes, using raw materials which are sustainable in the long run, proper handling of hazardous chemicals used in dyeing and coating, proper waste disposal, treatment of water before discharge, using recycled products and adherence to certain guidelines to eliminate health risks of workers, consumers as well as the environment.
Supply Chain Digitalization
As compliance getting stringent, transparency in the supply chain has become an unavoidable factor, the finding indicates. Post-Covid the world has discovered the digital way of conducting business and this digital transformation is changing supply chain relations of buyer and supplier across the globe. Digitalization has enabled buyers to find suitable supplier from any corner in the world. Suppliers who are able to deliver better, transparent and more efficient business have become first choice of buyers. The trend in the textile supply chain has had a huge impact on aspects, such as sourcing approach, supply chain visibility, partner collaboration, information sharing and analysis.
The Xinjiang Impact
Following the Xinjiang cotton ban by the US, buyers become more conscious about their sourcing and began focusing on reducing dependency on China for sourcing requirement. However, this action opened up opportunities for other manufacturing nations such as Bangladesh, Vietnam, and India to increase their share in the global textile and apparel market and boost exports. The ban opened up huge market, especially for Indian cotton-based products on global level. It suggests that taking advantage of the production-capacity shift in the labor-intensive industry away from China over the past few years, countries in South Asia have been steadily increasing their market shares in terms of textile exports to the US.
The comfort wear factor
As people were pushed to stay home to contain the spread of Covid19, a need to be in comfortable clothing arose and gave boost to comfort wear clothing. Comfortable clothing, which is mainly made using stretchable fabrics, further increased demand of cotton-spandex, polyester and nylon spandex raw materials. Induced by Covid19, increased interest in comfortability for the past couple of years, gave boost to athleisure category.
Growing share of Manmade Fibre
The manmade fibre (MMF) segment accounts for 70% share in the global fibre consumption with the majority of share held by polyester fibre. The global fibre consumption has increased from 87 million tons in 2014 to 103 million tons in 2022. Polyester has replaced cotton to become the largest and the fastest-growing category in the world with current global consumption of 57 million tons. The demand for manmade fibre is growing significantly across the world.
There are several reasons behind this trend. Low cost, the demand-supply gap in cotton, and versatility in design and application are some of the key reasons. Realizing the potential of the synthetic Industry, the government of India has also taken the initiative to promote synthetic textile manufacturing in India and launched dedicated schemes like PLI and MITRA. Approximately, 49% i.e. $427 billion of the global trade comes from man-made fibers and is growing at a CAGR of 3.7% since 2010. In 2021, MMF-based apparel stood at $237 billion growing at a CAGR of 4.6% while cotton-based apparel stood at $207 billion MMF-based fabrics being the second largest category stood at $69 billion growing at a CAGR of 3.4% during the same period.
Indian T&A Market is expected to touch $250 billion
Indian textile and apparel market is estimated at $153 billion, 70% of which is domestic consumption while exports constitute the rest 30%. The overall domestic market of India stood at $110 billion in 2021. Within this, apparel retail contributes $80 billion, technical textiles contribute $22 billion and home textiles contribute $8 billion. The report says that the domestic market is further estimated to reach $190 billion by 2025-26 growing at a CAGR of 10%. Domestic home textile market is estimated to grow at a CAGR of and reach $13 billion, whereas technical textile market is estimated to grow at CAGR % and reach $42 billion during the same period.
India’s Rising Exports Share
In terms of global ranking, India is ranked 2nd in textile export with 7% share and 6th in apparel export with 3% share. Overall, India holds 4th position with 5% share of global exports. India’s T&A exports were $43 billion in 2021-22 and have grown at 3.7% CAGR since 2010-11. The exports are further estimated to grow at 9% CAGR from 2021 and reach 60 billion by 2025-26.
Apparel is the largest exported category in India’s exports with a dominant share of 36% in 2021. It is followed by the exports of home textile and yarn with 7% share each. Fibre/ȃ lament category has registered the highest growth in India’s export of textile and apparel with a CAGR of 11% over the last decade. USA, UAE and UK are the largest markets for India’s apparel exports with 30%, 14% and 9% share respectively. The other major export markets for India are Germany and France with 6% and 4%share respectively.
India is a growing economy and the T&A market is poised to grow. The market is estimated to reach $ 250 billion by 2025-26, making India as one of the largest producers and consumer of Textile and Apparels.
Achieving the $250 billion by 2025-26
Currently, the textile sector in India accounts for 10 per cent of the country’s manufacturing production, 5 percent of its GDP, and 13 per cent of exports earnings. Post-covid there is also a boost in the demand and the government support in form of attractive schemes such as Production Linked Incentive (PLI), Mega Investment Textile Parks (MITRA) will further drive the way for the $250 billion target, the report suggests. However, a roadmap to achieve the full potential of the industry is what the industry needs to deliver this target in time.