20-05-2025
India's $100-bn textile export target hinges on MSME: Primus Partners
India's target to hit $100 billion in textile exports in five years revolves largely around how well the country can support and scale its micro, small and medium enterprises (MSMEs), according to a new Primus Partners report, which says textile MSMEs form the backbone of the industry, but are held back now by fragmented value chains, high costs, skill shortages and limited global market access.
India accounts for just 4.6 per cent of global textile exports, while China's share is 48 per cent.
Titled 'Roadmap for $100 Billion Exports in 5 Years', the consulting firm's report asserts that unlocking MSME potential is key to narrowing this gap and placing India among global leaders in textile manufacturing.
India's target to hit $100 billion in textile exports in five years revolves largely around how well the country can support and scale its MSMEs, a Primus Partners report says. Textile MSMEs are held back by fragmented value chains, high costs, skill shortages and limited global market access. RMG and home textiles, accounting for 75 per cent of textile exports, are expected to benefit the most.
While geopolitical shifts offer an opportunity for Indian firms, textile MSMEs must evolve to exploit this, the report points out.
Readymade garments and home textiles, which account for 75 per cent of India's textile exports, are expected to benefit the most. The shift in sourcing patterns by global brands under the 'China Plus One' strategy makes India an increasingly attractive destination—if MSMEs can keep pace.
MSMEs may be aggregated into formal clusters, like farmer producer organisations, enabling them to negotiate better pricing, adopt standardised practices and directly access global buyers, it recommends. These aggregations would also improve creditworthiness and streamline supply chain operations.
However, a major constraint is skills. Only 15 per cent of workers in the textile manufacturing sector have received formal training, according to the National Skill Development Corporation. This contributes to a 20-30 per cent loss in productivity.
Primus Partners suggests setting up dedicated training centres in tier-II and tier-III cities, especially where PM MITRA Parks are coming up, to bridge this gap.
Finance remains another bottleneck. MSMEs often struggle to access affordable credit for modernising machinery or expanding operations. The report recommends expanding operational subsidies and employment-linked incentives to reduce input costs and boost competitiveness.
Infrastructural inefficiencies, particularly in logistics, continue to inflate production costs. India's logistics costs stand at 14 per cent of GDP, compared to the global benchmark of 8-10 per cent. The report urges faster development of integrated supply chain parks and better port connectivity to support textile MSMEs in becoming export-ready.
Trade access is also essential. While competitors like Sri Lanka enjoy duty-free access to Europe under the Generalised Scheme of Preferences (GSP), Indian exporters face tariff disadvantages. The report calls for accelerated negotiations of free trade agreements with the European Union, the United Kingdom, and the United States to make Indian goods more price-competitive.
The report also stresses on the need to integrate textile MSMEs into the growing technical textile segment, projected to reach $274 billion globally by 2027.
Fibre2Fashion News Desk (DS)
