Emerging Sectors

Australia’s Textile and Apparel (T&A) industry’s contribution to the national economy was ~ AUD 12 billion (USD 8 billion) in 2017⁴⁷². With the shift in consumer requirements, increased thrust on sustainability in fashion and the trickling down of technology to the fashion sector, Australia has a developed a keen expertise for development of integrated design capabilities and unique fabric development supported by its universities, design education programs and industrial design teams. Australian advanced textiles have varied applications across sectors such as internet of things, healthcare and high- performance apparel. Some examples of advanced textiles include fire-resistant textile technologies (developed by RMIT) and denim dyeing project that reduced water usage by up to 2,000 litres per garment (by Deakin University). Australia’s design schools are at the forefront of the industry’s rapid progression. Australia’s fashion institutes have produced several world- renowned fashion designers that have placed the country on the global fashion map. The country’s institutes are amongst the best in the world, with Royal Melbourne Institute of Technology (RMIT) and Fashion Design Studio ranked 17th and 23rd globally, respectively. Australian textile companies are constantly evolving and spend a lot of time carrying out research to develop textiles that can resolve industry issues. These research activities span across various sectors such as technical textiles for products used in the medical industry, automotive industry, sports, etc. In addition, Australian companies have also collaborated with other countries for developing technical and synthetic fabrics for military purposes. Some successful international Australian fashion brands include Billabong, Rip Curl, Cotton On, Millers, Crossroads and Just Jeans, etc.

Technical textiles, which is an emerging area for investment in India, accounts for around 12% of the Indian textile market. The market size is estimated to be around USD 17.9 billion and is expected to grow to USD 31 billion by 2020-21. India is the second-largest producer of manmade fabrics⁴⁷³ and is the largest producer of cotton in the world (26% of the world cotton production)⁴⁷⁴. India is also a key exporter of textiles to the world. The total textile exports including apparel, linen and other textile articles of India were valued at ~USD 21 billion in 2018, making it one of the top ten exporters of textiles to the world. Given India’s global technical textiles exports, which have increased at 15% CAGR to about 1.7 billion (2016- 17), a huge potential for further market growth exists in India. India benefits from its lower wage costs and therefore can export low cost textiles to the world⁴⁷⁵.

In order to promote integrated value-chains in the textiles sector, the Ministry of Textiles has been supporting various infrastructure projects in this realm in India. Brandix India Apparel City (BIAC), near Visakhapatnam, is a state of the art vertically integrated Textile & Apparel Supply Chain Park. It is one of the largest textile-industry Special Economic Zones in the world, and the only one of the scale and concept in South Asia. The concept of ‘Fibre-to-Store’ integration in the park offers unique advantages to global apparel chain partners. BIAC is a key supplier to international retailers such as Victoria’s Secret, H&M, M&S, etc. At present, an area of ~500 acres is available. The Ministry of Textiles has also established the Integrated Skill
Development Scheme (ISDS) to focus on the development of skilled workforce in the textile industry. Further, India is globally recognized for its diverse and indigenous design forms and patterns such as Bandhani, Patola, Batik, Kalamkari, Madhubani, etc. However, the traditional Indian textile industry lacks the presence/use of modern and smart textile technologies that have reshaped the international fashion market.

Demand for expanded use of smart textile opportunities provides a two-fold collaboration opportunity for Indian textile manufacturers and Australian designers. Indian companies can benefit from access to modern and smart textile technology via such a partnership with Australia. On the other hand, India’s expertise in low-cost manufacturing, coupled with Australia’s advanced and new-age textile technology, can offer Australian textile manufacturers the chance to look at large scale manufacturing setups at a cost-competitive level. Further, there should be a focus on supplying sports garments such as swimsuits, tracksuits, etc to the Australian market through investments by Australian brands in manufacturing such garments
in India. Additionally, India can also emerge as a sourcing hub for textile companies as seen in the case of Wesfarmers’ brand K-Mart in Australia. K-Mart sources garments from India and Bangladesh and has a team located in New Delhi focusing on sourcing and designing of garments. In 2018, India was already the 3rd largest exporter of T-shirts and 2nd largest exporter of kitchen linen to Australia. India is already exporting knitted jerseys and pullovers to Australia. India should fill the gap in Australian demand for products such as blankets, sacks, bed linen, and a wide variety of apparel.

Opportunity for Australian investments in the Textiles sector in India

India has established itself as a global textile hub. The New Textile Policy, which is to be rolled out in 2020, is expected to lay special focus on apparel and garment manufacturing, technical textiles and exports for the next 10 years. The policy is in line with the Indian Government’s “Make in India” strategy to position India into a well-integrated and globally competitive manufacturing and exporting textile hub. 100% FDI is allowed in the textiles sector under the automatic route. The Ministry of Textiles is also planning to establish 10 Mega Textile Parks as a part of the policy in order to boost infrastructure development for the textiles sector and attract foreign investment. Favourable government policies and availability of abundant labour and natural resources make this an attractive investment
opportunity for Australian companies.

⁴⁷² Australian Trade and Investment Commission Report, Mar’18
⁴⁷³ Bangladesh keen to expand relationship in textile sector with India, Yarns and Fibres.com
⁴⁷⁴ Cotton Textile Industry in India, Invest India, National Investment Promotion and Facilitation Agency
⁴⁷⁵ HS codes 60,61,62,63; Trade Map