Improving the Textile Sector Through MSME Loans and Government Initiatives

China's Surplus Textile Influx Affects India's $60 Billion Industry - The  Hindu

In India, textile is an important sector as it contributes to the gross GDP of the country and has a significant share in the export. As per IBEF (Indian Brand Equity Foundation), the textile and apparel sector contributes to 13% of the total industrial output in the country.

As per the industrial output textile sector is one of the biggest sources of employment after agriculture, and therefore, it’s one such industry where government and private lenders focus on increasing the production in the textile sector.

There are many unorganized players in the sector, which includes the textile mills, garment manufacturers, and other small-scale industries of cottage and khadi that are important for the growth in the economy of that sector. A business person can take advantage of the DSA partner app, where they can get loan agents who can lend support through the MSME loans that will meet the need for working capital for these businesses.

5 Factors that Can Propel the Textile Industry to the Next Level

When it comes to the textile industry in India the government has taken the initiative to propel this industry and bring better GDP figures that will decrease the trade deficit of the country.

  • Better Promotional Schemes from the Government

In the Union Budget, there are some of the most common infrastructure procedures that are essential for the growth of the sector, and the government is pushing such initiatives that are essential for growth. For example, the setup of the mega textile parks can create employment opportunities and that starts to strengthen the MSME sector.

The PLI (Product-Link Incentive) scheme is something that will help the textile and manufacturing centers realize maximum capacity by making India the export hub of the world.

Through these strategic incentives, the government can bring many employees into this sector. There will be a minimum income of 15,000 INR/month, which will help the employees in the initial months, and the company can have better operating leverage.

  • Sourcing Better Opportunities for Better Exports

The textile and apparel sector of India is one of the largest in the world, and in terms of exports from this sector, it’s the second largest after China. However, many companies and brands from the West and Middle East are shifting their manufacturing location to other countries after COVID-19.

India can utilize this China plus one advantage, and here, it can set up manufacturing facilities and the trend of organized retail is increasing the demand across the tiers. As per the data of the IBEF, the total exports of textile goods, especially the fabric and handicraft segment, stand at a value of $ 3.29 billion as of February 2024.

In terms of growth opportunities, the market improvement in this segment is huge, and the quality and value for each item can be increased and position the country in the top of exports in textile and apperals.

  • Improving the Digital Infrastructure of the Textile Industry

The role of improving the digital infrastructure is important, and in this sector also, it’s quite essential. Through the right infrastructure and technological support, a company can become operational and gain operating leverage that helps a brand to get a better margin.

For example, choosing the color that will be printed onto fabrics and machines that can make the process efficient and faster are some of the ways through which the total productivity of the sector can be improved and can make the country stand in a dominant position that will become a superior stance for a country from an economic point of view.

  • Better Chance for Self-Employment in Rural Areas

For people who are searching for jobs, the sector offers enough employment opportunities that can help a person build a brand or manufacturing unit in their place. In these situations, a DSA can help a person get loans and funding that will help to kickstart a venture.

DSA’s full form is Direct Selling Agent, and they work with partner lenders that can offer entrepreneur loans, and through that, they can make a prominent initiative to start a venture. There are several MSME loan and working capital loan schemes that help SMBs to meet the need for cash and can run operations throughout the year.

These are some of the initiatives that are already in place and, if implemented successfully, can make India a country of textile superpower.