India's textiles sector is driven by the country's abundant availability of raw materials and labor, with the market size standing at US$140.4 billion in 2020, and expected to grow to US$223 billion by 2021. The sector is currently in need of foreign investments as it shifts its focus to the production of handloom fabrics, man-made fibers, and technical textiles. To attract foreign investors, the government of India has ensured that 100 percent FDI is allowed in the textiles sector without needing any government approval, that is, under the automatic route. Various schemes have been introduced to further develop the industrial ecosystem, including industrial parks, skills development, and production-linked incentives. Aiming to develop the sector to be worth US$300 billion by 2025-26, the Indian government has planned a Production-Linked Incentive (PLI) Scheme worth US$1.42 billion for the setting up of seven mega textile parks, and to increase the production and exports of man-made fibers. The scheme is also expected to raise the value of total exports to US$300 billion by 2024-25. The textiles sector in India is still ata nascent stage, and requires foreign investments to help raise its manufacturing capacity. In order to attract FDI towards various textile segments, such as technical textiles and textile machinery, it is necessary to identify which country is best capable of matching India's FDI needs in these specific areas.
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