material expenses and at the same time

This can primarily be attributed to healthy demand from the US and the European Union EU which accounts for the bulk of apparel exports from India. This is due to the fall in demand from China 30% of Indias cotton yarns demand is from China as the country has started subsidizing cotton yarn purchase to its farmers due to which imports of cotton yarn from India have fallen. One, rising domestic consumption of apparels, especially from tier-II and tier-III cities, where income growth has been phenomenal. In the past one year, exports of cotton yarn have grown by a meagre  billion as per estimates. Demand for apparel is likely to rise to US$ 122 billion by 2017 from billion in FY11. This is one of the chief reasons why textile companies in India are finding it relevant and profitable to export garments instead of raw materials. These companies also benefited from rising labor costs in Bangladesh and China, which shifted production to India. With the governments attention on the Make in India theme, there is an increase in focus on facilitating Custom Bamboo Yarn exports of garments. 

According to the latest data released by the Ministry of Textiles, in terms of value, Indias exports of ready-made garments have shown a growth of 33% in FY15 to Rs. One of the chief reasons for the high interest in garment manufacturing companies is lower raw material prices. 72,592 crore in FY14. Rising government focus and favorable policies to support the industry has led to growth in the industry. Due to the benign prices of raw materials, apparel-manufacturing companies managed to save on their raw material expenses and at the same time did not offer massive discounts on their finished products. Revenue growth of garment-manufacturing companies has been in the range of 10% to 25% for FY15 on a y-o-y basis. But will this rally in stocks of garment-manufacturing companies continue in the coming quarters and what would drive growth in this segment? Here is a detailed analysis of Indias garments industry and why earnings of garment-manufacturing companies are likely to grow during the next two years.

SOME FACTS India is the worlds second largest producer of textiles and garments and accounts for 63% of the world market share. This has gone down well with garment exporters. In the past one year, Indias exports of ready-made garments have shown handsome growth. This provides significant room for re-rating of stocks of these companies despite their recent run-up. In the new trade policy, post the union budget, the government has given export incentives to the tune of 5% to 6% to garments exporters.18 billion in the 11th Five Year Plan.25 billion to textiles as against US$ 4. Interestingly, garment-manufacturing companies benefited from two key factors. 78,760 crore in FY15 from Rs. In the next three years, due to the aforementioned reasons, the growth rate in exports of garments would be higher than exports of cotton yarn. 77,485 crore in FY14. Experts point out that Indias garments exports would continue to show stupendous growth for the next three years. In addition to this, India accounts for about 14% of the worlds production of textile fibres and yarns largest producer of jute, the second largest producer of silk and cotton, and third largest producer of cellulosic fibre. And exports of textile and apparel are expected to increase to US$ 82 billion by 2021 from US$ 40 billion in 2014. According to the Centre for Monitoring Indian Economy CMIE, during 9MFY15, exports to China declined significantly by around 17% to 376 million kg in comparison with the same period past year. 96,523 crore from Rs. 

 As opposed to the stupendous growth in exports of ready-made garments, the growth in exports of cotton yarn has been tepid. Export has been the core feature of Indias textile and apparel sector. Experts point out that Indias garments exports is a five-year story. Free trade with ASEAN countries and proposed agreement with the European Union will help boost exports. The textile and apparel industry can be broadly divided into two segments: yarn and fibre, and processed fabrics and apparel. The size of Indias textile market in 2014 was US$ 99 billion the market is expected to expand at a compound annual growth rate CAGR of 9. Economic activities in the US and the EU have witnessed signs of improvement and as a result, CARE expects growth in demand for apparels from both the regions to continue.. This has boosted revenue growth of garment-manufacturing companies in the past one year. Another factor that has benefited garment-manufacturing companies are improved demand from the overseas markets. India has the highest loom capacity including hand looms with 63% of the worlds market share. The garment-manufacturing companies in the country have largely gained from this development.