Investment Opportunities in the Indian Textile and Garment Sector

The textile industry is one of the most prominent industries in India. The sector contributes about 14% to the total industrial production and is a source of employment for nearly 35 million people. Thanks to healthy policies undertaken by the Government of India, investment opportunities have increased manifold in the sector.

Investment Opportunities in India

It is a well-known fact that Indian PERFORMANCE FABRIC textile and garments are held in high esteem in both domestic and foreign markets. Low manufacturing costs and availability of cheap labor have enticed several foreign firms to establish base in India. In the Union Budget 2013-14, Government of India announced a slew of measures including tax exemptions for the textile and garments industry.

The new excise regime proposed in the budget would ease the cost pressure within the industry. The budget removes excise duty on branded garments. This would not only lower manufacturing costs, but also attract foreign investments. The sector expects a 5-7% increase in FDI by the next financial year.

The Government of India’s announcement to continue with the Technology Upgradation Fund Scheme (TUFS) in the 12th five year plan (2012-17) will leverage investments in technology upgradation in the textile industry. In the current market scenario, it is extremely important for Indian textile and garment manufacturers to be technologically competitive. In the recent five year plan, Government of India plans to invest nearly US$ 9.1 billion on textiles as against US$ 4 billion in the previous plan.