India Has Opportunities Aplenty For Global Export Of MMF Based Products

There are enough opportunities for the Indian T&A industry especially in the MMF based product categories. What is needed are concerted team efforts by all the value chain constituents of the industry and the government in creating a clear roadmap and action plan to increase India’s share in global textile trade through the MMF route, avers Dr Gurudas Aras

I was recently called in Surat by the Textile Association of India, South Gujarat chapter, to deliver a lecture on the opportunities for MMF based products in exports. In this seminar, which was attended by over 170 people from the industry, I presented an analysis of the data of global MMF textile trade and the exports by various countries, including India. This analysis gave me a clear perspective about which MMF based product categories offer the best opportunities for the Indian manufacturers. The following article is based on my presentation made at the seminar.
 
The dominance of MMF in the global fibre consumption
If we look at the global fibre production, we see overall dominance of MMF and that too more of polyester fibre. The global fibre production data of 2023 shows total fibre production of 124 million tonnes, out of which 67% (83.8 tonnes) has been synthetic fibres, 25% (31.4 tonnes) plant-based fibres, 6% (7.9 tonnes) manmade cellulosic fibres and 1% (1.3 tonnes) are animal fibres. Within the synthetic fibres, the polyester share is 85% (71.1 tonnes) which shows the overall dominance of polyester in total fibre consumption.

In value terms, the global polyester fibre market is estimated to be valued at USD 103.33 bn in 2024 and is expected to reach USD 174.32 bn by 2031, exhibiting a compound annual growth rate (CAGR) of 7.8% from 2024 to 2031.

India’s dilemma in apparel exports
India’s apparel exports have shown degrowth for the last couple of years mainly due to its larger dependence on cotton, while major global trade happens in man made fibre (MMF) based apparel. The global apparel trade has been majorly dominated by China over the last few decades, but in the last few years Vietnam and Bangladesh have also increased their share considerably. Of late, there has been awareness at industry level as well as government level about the need to accelerate production of MMF and its products. This has resulted in the declaration of PLI schemes for the MMF based products manufacturing and technical textiles. Despite the PLI scheme, not much capacity creation has happened in MMF based apparel and India continues to lack required capacities in MMF apparel manufacturing.

The globally top traded MMF based knitted commodities
Following are the globally most traded knitted products from the MMF basket:

• Outerwear (jerseys, pullovers, cardigans, waistcoats, etc)
• Women’s/girls’ trousers
• Women’s/girls’ dresses
• Men’s/boys’ trousers
• Women’s/girls’ briefs, panties and swimwear
• Men’s/boys’ shirts

In all these categories, China is dominating with around 35% to 45% share followed by Vietnam (7 to 18%) and Turkey (4 to 7%). Sadly, India has a meagre 0.1% to 1% share in these categories. This shows the immense opportunity India has in MMF based knitted products.

The globally top traded MMF based woven commodities
Following are the globally most traded woven products from the MMF basket:

• Women’s/girls’ outerwear (overcoats, raincoats, capes, etc.)
• Men’s/boys’ outerwear (overcoats, raincoats, capes, etc.)
• Brassieres
• Men’s/boys’ trousers
• Women’s/girls’ dresses
• Women’s/girls’ shirts, trousers and blouses

In all the above categories, China is dominating with around 35% to 40% share, followed by Vietnam (6 to 14%) and Germany (7%). Sadly, India has 01% to 1% share in most of these categories, except 7% in women’s/girls’ dresses and blouses. This shows immense opportunity India has in MMF based woven products as well.

Global opportunities in different MMF product categories
If we analyse the global MMF products market data in further detail going up to individual product categories, it shows a clear picture about the opportunities India has in MMF based products. (In brackets is India’s % share in the global market in respective product category)

• Man made filament & fabrics (3.30%)
• Man made staple fibres, yarns, fabrics (4.76%)
• Warp knitted or crocheted fabrics (1.83%)
• Knitted apparel (1.76%)
• Woven apparel (3.47%)
• Man made nonwoven, wadding, rope (1.83%)
• Home textile products (5.70%)
• Flooring products & others (1.59%)

In all the above categories, there is a scope to increase India’s share in global trade by another 25% to 30% from the existing share by year 2030.

Changed import dynamics of the US T&A trade due to new tariffs

• Total US imports in T&A are USD 120 billion (Rs 10.32 lakh crore)
• China’s T&A exports to US are USD 30 billion (Rs 2.58 lakh crore), constituting 25% share of US imports
• Post Trump administration’s reciprocal tariff order for textile exporting nations, the dynamics of global trade have changed completely
• The new US tariffs for China are (initially 145% but now settled) at 30%, Cambodia 49%, Sri Lanka 44%, Bangladesh 37%, Thailand 36%, Pakistan 29%, India 27%, Turkey 10%, Morocco 10%, North Americas 10%. This gives a clear advantage to Turkey, North Americas, Morocco and then to India and China due to lower tariffs
• India’s present exports to US are USD 10 billion, which are nearly 28% of India’s total T&A exports of USD 36 billion.     

Challenges for India despite global opportunity

• Indian products are more cotton based while more than 70% of global T&A trade happens in MMF based products
• Not enough MMF raw material manufacturing capacity in India (China has 82% of global MMF capacity, India 8%)
• MMF raw material prices in India are higher than the global prices
• Inconsistent quality of local MMF yarns
• Non-availability of functional/technical yarns in India
• Lack of big size capacities in MMF apparel manufacturing (despite PLI scheme for MMF)
• QCO restricting MMF manufacturing value chain growth
• Absence of complete MMF apparel manufacturing ecosystem (supply chain) like Bangladesh
• Lack of good processing/finishing capacity for MMF fabrics
• Absence of culture of in-house product innovations (e.g. Taiwan and S.Korea)
• Stringent sustainability regulations in EU will increase costs and difficulties in exports
• Old mindset of business owners focusing on short term profits
• Absence of textile clusters with modern infrastructure which can compete globally on cost and quality

How can India take advantage of the opportunities?

• Lower US tariffs and bi-lateral trade negotiations with the US are under progress and there is hope of softening of US tariffs for India
• The signing of the India-UK FTA has thrown open huge opportunities for Indian T&A exporters since UK imports clothing worth USD 21 billion each year and India has only 6% share in that. Zero duty access to Indian goods will give level playing field for the Indian suppliers.
• The FTA with EU is at the final stage of discussion (EU is the second largest global importer, but Bangladesh, Vietnam, Pakistan get preferential treatment with zero to lower duty while Indian textiles attract 12-18% import duty)
• Untapped opportunity of the Japanese market: Japan imported textiles worth USD 23.62 billion in 2024. India has only 1% share against China’s 54% (despite India having FTA with Japan since 2013). There is a serious need to orient our manufacturing and quality for the products required by Japan.
• Indian manufacturers have an ability to compete against China in prices, with the use of good technology and sustainable processes which has been successfully done by the Panipat suppliers in polyester bedsheets and blankets
• Indian manufacturers should increase capacities in MMF based knits since there has been an increasing demand for MMF based knit goods globally
• Printed MMF bed linen (HS code 630222) has global export market of USD 1.13 billion while the non-printed bed linen (HS code 630232) has global export market of USD 2.25 billion. In this category, China’s share is 76% followed by Pakistan and Turkey. India’s share is insignificant in this category which gives it a great opportunity for market share gain.
• MMF based activewear and sportswear (HS code 6004) from woven, warp and circular knitted fabrics is another potential category. Global activewear market size is USD 162 billion which is growing at CAGR of 6.5%. This product category also offers a huge opportunity in import substitution (the present imports are USD 140 million)
• Another potential opportunity is in sports shoes fabrics, technical textiles (woven, knitted), non-wovens (personal hygiene products)

MMF product profiles which hold potential for exports to global markets:

• PERFORMANCE FABRICS/COATED FABRICS: Moisture wicking fabrics, breathable textiles, UV protection fabrics, water repellent fabrics, anti-microbial fabrics, fire retardant fabrics, protective textiles, packing fabrics, architectural fabrics (awnings), phase-change fabrics (adjusting to temperatures)
• PERSONAL HYGIENE PRODUCTS: Baby and adult diapers, stretch bands, feminine hygiene products
• HOME TEXTILES: MMF knitted bed linen, curtains with performance coatings, mattresses, carpets
• HEALTHCARE PRODUCTS: Medical gowns, protective gears, PPE kits, face masks, hospital bedsheets and mattresses, hand gloves, wound dressings
• TECHNICAL TEXTILES: Bullet-proof vests, high altitude jackets, composite materials for automobiles, trains and aircrafts, spacecrafts
• ACTIVEWEAR/FITNESS PRODUCTS (polyester, nylon, spandex, lycra based): Track suits, swimwear, sports shoes, yoga mats

          Important factors for manufacturers who want to cater to the global markets

• Investing in state-of-the-art technology without compromise
• Fabric finishing is the most important area to focus on for real value addition
• Proper handling of high Spandex content fabrics during processing
• Special attention to raw material consistency and quality
• Importance of resource and process optimisation for product consistency and cost-optimisation
• Investing in product design, product development and market development
• Adopting sustainable manufacturing processes: Use of lesser resources like energy, water and chemicals, recycle and reuse, avoid hazardous chemicals. Use of renewable energy
• Inculcating ‘Export Culture’ in the manufacturing set up: Zero Defect Initiative
• Focusing on ‘Quality Consistency’
• Importance of maintaining good ‘Factory Hygiene’
• Training of staff and workers on continuous basis for upgrading skills and knowhow
• Cluster approach for cost-competitiveness (shared resources like Boiler, ZLD, Lab etc.)
• Need for change in the mindset of owners (creating a ‘Long Term Roadmap’ instead of looking for short term gains)

Some Industry segments have already shown the way to global success
It is interesting to note that some segments or clusters of the Indian textile industry have achieved global success by beating the global competitors, including China. This should inspire the Indian exporters to venture outside to take on fierce global competition. Following are the examples of such global successes.

• Panipat Cluster: In polyester bedsheets and blankets
• Tirupur Cluster: In cotton knitted garments (Rs 40,000 crore exports)
• Knitted Baby Garments: 33% share of global market
• MMF Bed Nets (mosquito nets): 28% share of global market
• FIBC (Flexible Intermediate Bulk Container) known as Jumbo Bags: 30% share of the global market
• Home Textiles (Terry towels and bedsheets): Indian brands dominating the US market
• Cotton Yarn: 27% share of the global export market

In conclusion, I believe that despite the ever-dynamic global trade posing challenges, there are enough opportunities for the Indian T&A industry especially in the MMF based product categories. What is needed are concerted team efforts by all the value chain constituents of the industry and the government in creating a clear roadmap and action plan to increase India’s share in global textile trade through the MMF route.

References: Global data and statistics taken from ITC Trade Map and United Knowledge Services (UKS)