Textile and Apparel orders stimulate the export surge of India: a huge part of Indian economy- 2021 update

Textile Sector: India, a country which is popular in the world for its export sector. The history of exports go long way back, thank the rich handicraft of our country and the availability of top quality spices in our country. However, the entry of the British into our country completely destroyed our export sector and made our country its colony. The condition improved after the process of globalisation where our export sector started to grow again.

Today, our export sector is one of the strongest pillars of our economy’s growth. In this article, we will be discussing how the export sector, especially the textile and apparel orders which are providing a much-needed boost to the reviving economy, after it was destroyed by the COVID-19 pandemic. 

Textile and Apparel

Our country is very famous for its textile and apparel production across the whole world. The global demand for the textile and apparel sector is much higher than you think. These goods are exported to almost across all the nations as they are rich in quality and better than any other country’s produce.

The largest importer of these textile and apparel goods from our country is the United States and is often considered as the single largest export market as the majority of our export go there. In the year 2021, the exports to the United States have been on the rise, thank the all-time high consumer demand after a very long period of time when lockdowns prevailed across the globe.

exports: Govt rolls back duty benefits to apparel exports as it retains state taxes rebate scheme - The Economic Times

In the first seven months of this year, India’s textile and apparel export were up 55 per cent. This percentage is much bigger than what it sounds like. To give a justification to this statement, this is the fastest pace of growth among the top five countries exporting textiles to the market of the United States.

This is a great news for our economy as the export was nearly zero, at least till the middle of 2020 as lockdowns were imposed across the globe and international borders were closed. 

Not only in the United States, but the performance of our textile and apparel sector in the European Union is also commendable, and is on the rise. A sustained recovery of the export sector and a rise in the demand of the global market for the textile and apparel sector is providing much-needed growth to the overall export sector of the nation.

In the month of August, our country reported growth in the export sector for the sixth month in a row. 

However, the textile and apparel sector is not the only category that has witnessed growth this year. The overall merchandise sector witnessed a spike in the demand and reports suggest that is due to the spike in petroleum exports. Moreover, the gems and jewellery sector and the engineering goods sector also witnessed a recent growth in the value of exports. 

Talking about the high margin global export market for textiles and apparel, the past ten years have not been this good for our country. In the last ten years, India has always been edged out by its export competitors in the textile and apparel sector.

The competitors like Vietnam, Indonesia and Bangladesh have been much faster in supplies to key markets like the US and European Union and therefore were overpowering India for the last ten years. Let’s make you happy.

The trend has been reversed this year and India has performed much better than all of its competitors and therefore the export of India to these major markets have been up 55 per cent in the period of January-July 2021, edging out all its competitors.

Talking about the competitors, the export percentage rise of Vietnam was 18% while the percentage of Bangladesh and China was 29% and 28% respectively. This shows how great India’s export sector has been performing this year. 

What are the causes behind this great performance of the nation?

Apparel parks in India: A look at their current state - The Financial Express

The first and foremost cause was the reportedly high export order books reported by the textile and apparel manufacturers of the nation. The consumer demand was halted last year and therefore resulted in a boost this year.

Along with these, the producers received buoyant orders in the home textile segment too where India has always been a very strong player. 

Moreover, the export hubs of the country, especially the southern states like Tamil Nadu and Karnataka faced less severe restrictions during the second wave of the virus which ensured continued operations of production and avoiding any obstacle in the supply pace to the big export markets. 

However, there is one issue which might affect the growth of exports in the near future

The players in the garments and textile sector have raised their concerns about the delay in the operationalisation of the tax rebate schemes as well as lower than expected benefits of the schemes.

The Ministry of Commerce and Industry have, however, claimed that duty remission schemes such as Remission of Duties and Taxes on Exported products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) have been contributing to free the financial burden from exporters.

Challenges faced by the exporters due to the low availability of containers and all-time high shipping cost has become a matter of concern and might affect the pace of exports if the government does not provide the much-needed support to the exporters. The financial condition of everyone has worsened during the pandemic and therefore it becomes much difficult for the exporters to bear this high cost of shipping. 

What does it indicate? 

The rising growth of the export sector clearly shows a sign of recovery for the ailing Indian economy after its destruction during the first and second waves of the COVID-19 virus. The export sector plays a major role in the development of the nation as it brings great foreign exchange as well as create large scale employment.

The unemployment in the nation has increased since the COVID-19 virus started to spread and therefore this growth of the export sector is very great to reduce the rate of unemployment. 


India’s goods export reached a level of $33.14 billion in the month of August, which is up 45 per cent on the year. Moreover, the reports suggest that this rise in exports will continue for a long period of time, and will therefore help the country’s economy to revive.

Impact of COVID- 19 on Exports of Textile and Apparel Industry in Indian - TEXTILE VALUE CHAIN

However, there are some problems in this path of growth that may hamper the performance of the export sector in the country. The ever-rising freight rates, the growing shortage of containers imposes a threat to this growth. Moreover, the possibility of global central banks putting a stop to their quantitative easing policy will directly affect the consumer demand, which is currently very high.

The country has to overcome all these problems as the economy has been through a lot in the last year and needs recovery. The export sector can provide much-needed recovery to this ailing economy, but it is possible only if the government provides much-needed support to the producers and exporters of the country.

However, our country has overcome a lot of issues and will overcome this too. The much-needed revival of the economy will be achieved and things will get back to normal too. 


Edited by Sanjana Simlai.

Simerleen Kaur

Talk to me about economics, trade, and all things India.

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