Textile Industry in European Union

The textile and clothing (T &C) industry is a very heterogeneous industry and diverse industry; it covers a wide range of important activities. It includes transferring raw fiber into yarns and then yarns in to fabric and then finally uses the fabric to produce a wide range of finished products such as wool, bed-linen, geo-textiles, clothing, and synthetic yarns using high-tech machines.


The textile and clothing sector in European Union occupies a crucial position in the European manufacturing sector.  This industrial sector is one of the leading contributors to the economy of the European Union. Besides, the T & C sector also plays a major role in the social fabric of the many member countries of the European Union. As per the structural data released in 2006, European Union had more than 220 companies in the diverse sectors of textile industry.  The industry is one of the major industries that provide employment opportunities to a large number of labor forces in EU. The industry accounts for generating employment to more than 2.5 million people. The average turn over the Textile and clothing industry is about 190 billion Euros each year. This important sector also accounts for about 3% of the total manufacturing value added in Europe.

FDI Figures:

The textile and clothing sector in European Union is one the two biggest players in the global market. The European textile sectors accounts for 29% of the worlds textile exports (this, however, does not include trade between the European Union member countries). EU is just behind China in textile export, which occupies the first position and accounts for 40% of the worlds textile export.

The European Union market presents a perfect platform for foreign investors to invest in the textile and clothing sector. The textile sector is slowly but steadily is gaining importance in new and emerging markets of the third world countries. The use of new innovative methods to produce textile fibers and many other textile products in different sectors like medicine, science, architecture, aerospace, transport and automobile have opened up several avenues for foreign investors to exploit the textile market and cater to the needs of the market.

Investment policies:

To facilitate foreign investors investing the textile and clothing sector in European Union, the European Commission carries out bilateral agreements with foreign countries and formulates a mutually profitable industrial policy and lays down the regulatory framework. All foreign players are required to operate within the set regulation framework. The agreements help the foreign investors to have a better access to the markets in the third world countries.

The (T & C) textile and clothing industrial policy dialogue carried out by the European Commission with the Euro Mediterranean region is of great significance. This strategically important region has an important role to keep geographic proximity of the entire textile and clothing production chain in Europe.
The Single Market policy adopted by the European Union is one of the most significant landmarks of the European Union market base. The policy has a very positive bearing on the growth of the business and people in the EU in terms of increased employment opportunities, wider choice of goods and services, information and consumer protection, mobility of labor and creating competition amongst foreign players.

The European Textile sector is especially proactive in undertaking research work for the development of new and innovative products. The EU textile sector additionally has an active commitment within lead market initiatives that aims to provide appropriate measure to boost the market of the textile products.
The advanced technology used for the manufacture of textiles in EU is a major factor responsible for attracting investors for foreign companies and contribute to the exports of the EU. The ambitious plans by the EU to attract foreign investors in the textile sectors by providing financial incentives has paved way for long term sustainable development of European Textile and Clothing industry.

Size of the European textile industry:

As per the reports of the European Commission, as of 2007, the textile industry in Europe generated as much as around $277 billion in gross revenue that year. Besides, it employed around 2.3 million workers and comprised as many as 220,000 companies.

Key Players:

Germany: The rich history of manufacturing, flexibility and innovation has made the German textile industry one of the key industrial sectors. In Germany, textile industry is the second largest sector after the food and beverage industry and provides employment to about 400,000 workers across the world. The domestic textile market of the country comprises 1,300 small and medium enterprises, with a workforce of around 130,000, involved in different industry segments.

As per the reports of Federal Ministry of Economics and Technology, the domestic production of textiles in the country concentrates on technical textiles (40%), home textiles (30%) and clothing (30%). This makes Germany one of the largest textile exporters across the world, with an export quota of as much as 42.7 in the year 2008. The German government is also taking appropriate measures to encourage the investment in the textile industry.

Germany has also experienced a growing demand for clothing and textiles in the recent years. This increase can be attributed to the fact that the domestic purchasing power of the country has managed to remain stable in spite of the recent global financial crisis. Thus, this is the ideal time for foreign investors to expand their presence in the German market and reap huge benefits.

Portugal: The textile and clothing sector in Portugal is one of the key industrial sectors in Portugal. The sector accounts for providing employment to a large of labor force in the country. It creates employment for 180,000 employees and it contributes for about 12% of the Portugal’s export revenues.

During the financial year 2008, owing to the global financial crisis the production of the textiles products in the country declined and the exports fell by 6.5 percent during the period. However, after the financial turmoil subsided, the Portugal government took initiatives to boost the textile industry.

The federal government of Portugal not only provided financial aid to the local investors but also attracted foreign investments in the sector. The government announced a massive financial package of 850 million Euros to stimulate the domestic textile and clothing industry and encourage exports of textile products.

The government has also provided financial incentives to foreign companies for modernization of the textile units in the country. Besides, the government also provides essential help to make credit available to foreign players investing in the textile sector.


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