well positioned to gain a higher share of the global
home textiles industry in the post-quota scenario.
While China is the supplier of first choice, India
has the potential to emerge as the second-largest
However, for this opportunity to materialize,
suppliers in the country have to overcome numerous
challenges such as a fragmented textile supply
chain, low technology levels in the weaving and
processing sectors, stringent labor laws and growing
competition from developing countries such as
Pakistan and China.
Over 85 percent of home textiles exported from
India are made of cotton. Bed, table and kitchen
linen, and towels are the main product categories.
Together, the US and the EU absorb more than 80
percent of India's home textile exports.
In the financial year 2004-05, the country
exported around US$1.2 billion worth of home
textiles. Export revenue is projected to grow at a
compound annual growth rate of 15 percent for the
next five years.
One of India's competitive strengths is its
cotton textiles supply. The country has a 12 percent
share in global trade of cotton textiles, second to
China. Cotton textile exports have grown at 6
percent annually for the past five years, compared
to the world average of 2 percent. The country is
also the third-largest producer of raw cotton after
China and the US.
Robust R&D capability is another advantage
companies in India have. Some manufacturers even
view design capability as a marketing tool, as it
allows them to work closer with buyers in upstream
product development activities. Many suppliers are
deploying CAD technology to improve turnaround
times, while a few are tying up with designers in
Europe and the US in a bid to enhance their product
The availability of skilled labor for carrying
out handwork embellishments such as embroidery and
embellishments such as patchwork, threadwork and
decorative accents also gives makers an edge. This
niche is especially significant in view of the fact
that India suppliers do not have the high volume
capacity that is China's forte.
Impediments to export growth
A number of factors are slowing India's home
textiles export growth. Firstly, the diverse
textiles industry, which is the country's key
strength, has also been a bottleneck. This is
because the industry is as fragmented as it is
diversified. The fragmented nature is an outcome of
government policies that have until now promoted a
decentralized manufacturing environment favoring
small-sized operations. This fueled the emergence of
thousands of power loom and handloom units, which
have formed discrete production clusters peppered
across the country.
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