Issuu

India Market Assessment Report December 4, 2024 Callanan and Callanan Consulting LLC

Executive Summary Callanan and Callanan partnered with Antar Advisors to conduct the market research project in India for the National Industrial Hemp Council of America. In addition to compiling the information gathered from secondary data sources, the team also met with professionals from the industry to gain insights about the current market, consumption of industrial hemp and its growth potential in the Indian market. The report covers the market for industrial hemp with a focus on the textile industry, availability of hemp, its role as a sustainable fiber, usage of hemp fiber/yarn, its comparison with alternate fibers – especially with linen, standards followed by the industry, and the scope for hemp in other industries such as building materials and automobiles. Based on the information collected, the team has identified key challenges and technical gaps. The report also presents the opportunities for U.S. industrial hemp. NIHC can look to optimize these areas in order to penetrate the Indian market. The report also includes the section which has the list of contacts along with the profiles with whom the team has interacted during the project execution.

India Market Assessment Report (2024)

Contents Executive Summary

Industrial Hemp in India

History, Cultivation and Current Scenario of Hemp in India

Industrial Hemp in Textiles

Current Usage of Hemp in Textile Supply Chain

Alternate Fibers

Perception of Hemp Vis-a-Vis Alternate Fibers

Regulations and Standards

Existing Regulations and Standards

Industries Beyond Textiles

Usage and Potential of Hemp in Other Industries

Opportunities and Challenges

Technical Gaps in the Supply Chain and Proposed Activities

Annexures

Contact Profiles

India Market Assessment Report (2024)

Industrial Hemp in India

Hemp in India HISTORY OF HEMP IN INDIA

CULTIVATION REGULATIONS IN INDIA

India has a long history of hemp cultivation, deeply rooted in its ancient traditions.

Until 1985, hemp cultivation was legal in India. However, with the enactment of the Narcotic Drugs and Psychotropic Substances Act (NDPS Act) that year, hemp was classified as a narcotic drug alongside marijuana and other substances.

The earliest references to hemp are found in the Vedas, the revered Hindu scriptures dating back to 4000–3000 B.C., highlighting its use for medicinal and spiritual purposes.

This act prohibited the cultivation, possession, use, sale, and transport of hemp, except for medical or scientific purposes. A policy under Section 14 of the NDPS Act, 1985 allows industrial or horticultural cultivation of the hemp plant. In 2018, Uttarakhand, a state located in the northern region of India, became the first state in the country to issue a license for hemp cultivation to the Indian Industrial Hemp Association (IIHA) to grow industrial hemp on a pilot basis. Uttar Pradesh also legalized the cultivation of hemp. Other states such as Himachal Pradesh and Arunachal Pradesh have been exploring their options to implement the same in their region.

India Market Assessment Report (2024)

Industrial Hemp Market Estimation for India INDUSTRIAL HEMP MARKET IN INDIA (in ’000 USD)

2,541

2,325

1,388 862

2021

Though there are no exact numbers available, India’s hemp industry is currently pegged at about USD 2–3 million, according to the industry sources and based on the import data as industrial hemp production in India is miniscule. The current market is volatile, as it is primarily dependent on the availability of linen and design trends in the industry. Hemp is used as a substitute for linen by many manufacturers in India.

2022

2023

2024

Calendar Year; Preliminary estimation of the hemp market based on certain assumptions

The market value has been estimated based on the following assumptions: • Indian industrial hemp production is considered negligible • All values are converted to fiber level to ascertain market value • 70% realization assumed from fiber to yarn • 85% realization assumed from yarn to fabric • 55% assumed as wastage from fiber to yarn • Price proportion of hemp to other fibers is assumed ¾

KEY FACTORS AFFECTING THE MARKET

Availability for Linen*

Rising Awareness

Sustainability

Global Trend Forecasting

*Availability for linen in textile industry Hemp market estimated based on EXIM data, please refer to the detailed Excel sheet attached with the report.

India Market Assessment Report (2024)

Availability of Industrial Hemp in India Hemp in India is primarily grown in Uttarakhand state (northern India). However, due to production constraints, the industry is primarily dependent on imports for industrial hemp as domestic production volume is negligible. India imports hemp fiber, mainly from China and Europe. China is also the largest partner for supplying hemp yarns.

IMPORTED HEMP FIBER (IN MT) 252

2022

China

France

–

Belgium

–

2023 2024

Lithuania

In 2024 (until July), 90% of the hemp fiber was imported from China.

IMPORTED HEMP YARN FROM CHINA (IN MT) 292

More than 95% of the hemp yarns imported in India are from China. The demand for imported hemp yarn has been inconsistent over the years.

146 108 47

2021

2022

2023

2024 (until July)

Source: EXIM data

India Market Assessment Report (2024)

Industrial Hemp in Textiles

Textile Supply Chain for Hemp in India

Bast

Fiber

Yarn

Fabric / Apparel

Summary Imported hemp bast or retted hemp is processed into readyto-spin fiber. The realization from bast to fiber is only about 15% to 18%. It is dominated by three players in India: Canvaloop, Gencrest, and AltMat. All these players were established during COVID-19.

Yarns are imported from China, as well as processed domestically. Due to technical constraints in India, blends only up to 30% hemp are manufactured. India is reliant on imports to source yarns with higher blend % of hemp and 100% hemp yarns due to technical capability for fabric processing.

Hemp fabrics and apparel are primarily made with blends of cotton, viscose and lyocell. Brands such as Levi’s and Target have used hemp for denim production using coarse spun yarn with denim mills.

Key Players

GRASIM

India Market Assessment Report (2024)

Hemp for Textile Market in India FIBER

YARN

Origin

Price

Length

Origin

Price

Blends and Counts

China

Price of hemp fiber per kilogram in India ranges between $6.50 to $8.

Countries like Lithuania and China offer fiber length up to 100 mm. According to the industry, the U.S. has relatively shorter staple length, which is a key limiting factor.

Kingdom (one of the major suppliers from China) has a production capacity of 4,000 MT for hemp yarns and 22,000 MT for linen yarns. India gets more than 95% of imported yarns from China.

Price of hemp yarn in India ranges between $7 to $18 per kilogram, depending on the counts and blend.

Hemp is currently blended with Indian cotton (staple length 29 mm – 32 mm), viscose, lyocell, and regenerated hemp. Most common hemp yarn counts equivalent to Ne are 16s and 30s.

Premium Positioning

Demand

Hemp apparel comes under the premium clothing category at par with linen products.

There is currently limited demand from brands such as Levi’s, PVH, and Target for hemp garments.

France

Belgium

Lithuania

FABRIC

APPAREL

Origin

Look and Feel

Blends and Counts

Most of the fabric is manufactured domestically as per the demand from the brands. Fabric is partially imported from China.

While linen fabrics are known for their comfort, the fabric feel for hemp has been relatively stiff and rough but known to get smoother with multiple washes.

Hemp fabric is currently blended in the ratios of 30/70 to 55/45 with other fibers such as cotton, polyester, and viscose. Hemp is mainly used for woven fabrics and less toward knits.

Products

Shirts

Traditional Wear

India Market Assessment Report (2024)

Hemp and Sustainability

CARBON SEQUESTRATION SOIL HEALTH

Hemp is a natural carbon sink, absorbing large amounts of CO2 from the atmosphere and storing it in its biomass. This helps mitigate climate change and improve air quality.

Hemp has deep roots that help prevent soil erosion and improve soil structure. It also suppresses weed growth, reducing the need for harmful herbicides.

REDUCED PESTICIDE USE

WATER CONSERVATION Hemp requires significantly less water than many other crops, making it an ideal choice for regions with water scarcity.

Hemp is naturally resistant to pests and diseases, minimizing the need for chemical pesticides and protecting biodiversity.

MULTIPURPOSE PLANT Farmers can grow multiple coproducts from a single hemp crop. Benefits of multipurpose hemp production include greater economic sustainability.

India Market Assessment Report (2024)

Alternate Fibers

Hemp and Linen Market Scenario HEMP

LINEN

Industry Type

Globally, the industry is relatively fragmented, with many players.

Globally, the industry is relatively consolidated, with few players.

Strength

Strength of hemp is higher (4,500 CSP).

Strength of linen is lower (3,000 CSP).

Realization

Realization of hemp from fiber to yarn is lower (55%).

Realization of linen from fiber to yarn is higher (65%).

Price Volatility

Price of hemp is relatively less volatile.

Linen has higher price volatility.

Standardization

Lack of standardization in hemp prices globally.

Better price standardization across countries.

Demand

Demand for hemp in India is inversely related to linen’s availability.

Demand for linen has been constant, though limited, as production is stagnant.

India Market Assessment Report (2024)

Hemp and Other Alternate Fibers Fiber

Hemp

Linen

Cotton

Viscose

Polyester

Lyocell

Consumption

Price

Awareness

Versatility

Availability

Sustainability

Scale (Highlights) – 1 being the lowest and 5 being the highest

India Market Assessment Report (2024)

Regulations and Standards

Tariff Structure FIBER

YARN

FABRIC

33%

11%

As per the regulations, the Basic Customs Duty (BCD) is 30%, and an additional 10% Social Welfare Surcharge (SWS) is also charged on BCD.

As per the regulations, the Basic Customs Duty (BCD) is 10%, and an additional 10% Social Welfare Surcharge (SWS) is also charged on BCD.

India Market Assessment Report (2024)

Industry Standards Unlike fibers like cotton, there are currently no defined standards for sourcing hemp fiber or spinning yarns.

Denier

However, manufacturers have set their own set of standards, especially when sourcing hemp.

Tenacity

Elasticity

Cleanliness

Length

Retting Degree

Hemp fiber cannot be authenticated, and the outcome of the test will show as ‘flax’ unless specifically mentioned. Also, currently there is no certification standard for using hemp.

India Market Assessment Report (2024)

Industries Beyond Textiles

Building Materials There seems to be a limited potential for industrial hemp in the building material industry in India. Hempcretes are mainly used for insulation and generally used as an additional layer during construction. But in India, there is not much need for insulation due to the climatic conditions. One of the challenges of hempcrete block is that it is very weak with a strength of 0.3 MPa (megapascals), compared to the cement bricks which are generally used in India — with a strength of 7 MPa. Awareness of hemp in the industry has been at a very nascent stage, and few people in the business know about it. As it does not remain feasible to use hempcretes, and other materials can fulfill the same with lesser price, the growth potential for hemp in the industry seems negligible at the moment.

India Market Assessment Report (2024)

Automobile Industry With carbon footprint being one of the major concerns of the automobile industry, manufacturers are exploring sustainable alternatives. Hemp composites have been explored to make automobiles lightweight, strong, and biodegradable, offering potential benefits in areas of fuel efficiency, strength, and environmental impact. As of today, hemp hasn’t been used by mainstream automobile manufacturers in India.

India Market Assessment Report (2024)

Opportunities and Challenges

Opportunities for U.S. Hemp Disassociation From Other Cannabis Hemp has often been associated with other cannabis such as marijuana, which has a negative impact on the demand and traction. The U.S. hemp industry can work around educational materials and sessions to help the industry provide information that would help them to disassociate hemp from other cannabis.

Education for the Industry As the awareness in India about hemp is relatively low compared to other natural fibers, it would be important to spread awareness on hemp among the industry, especially among the manufacturers that are currently using linen. Education materials around sourcing parameters, quality, processing, and usage could be provided.

Trade Aggregation As there is lack of parity among the hemp suppliers across origins in terms of pricing and quality, some sort of trade aggregation among the U.S. hemp suppliers can help the Indian industry to understand and negotiate with the U.S. hemp industry, helping to better compete against other origins.

India Market Assessment Report (2024)

Opportunities for U.S. Hemp Establishing Standards It will be important for U.S. hemp to maintain certain standards of industrial hemp; this will help the industry players to better understand the product before sourcing it into the Indian market. As other origins do not provide such standards, this could provide an edge to the U.S. hemp industry.

Offering Technical Consultations As fabric manufacturers in India are unable to achieve the good texture and handfeel of the hemp fabric, technical consultations can be conducted to educate the manufacturers about the techniques to achieve the best hand-feel and texture to the end product.

Availability of Long-Staple Fiber One of the challenges faced by hemp spinners in India is the availability of long-staple hemp fiber. NIHC can explore the possibility of offering long-staple fibers to India to instantly gain market share and competitive advantage.

India Market Assessment Report (2024)

Challenges Consistent Demand

Demand for hemp products has been mainly led by design trends and innovation from brands. There is a lack of consistent demand from brands for hemp fabrics.

Fragmented Industry

As there are many players in the industry globally, there is a lack of consolidation among the industry leading to a lack of standardization in prices, quality parameters, and terms of the trade.

Dependence on Linen Demand

Currently, hemp in India is often used as a substitute for linen. When the prices of linen are high, the industry turns toward hemp to fulfill the demand as the characteristics of both the fibers are very similar.

Involvement of Major Players

Lack of demand from brands is one of the most important challenges in the industry. With involvement of major players such as Levi’s, Aditya Birla, and similar major brands, the industry could get a major push with smaller brands looking to follow.

India Market Assessment Report (2024)

Technical Gaps Global Benchmarks

From sourcing of fibers to testing, there is a lack of standardization in the Indian hemp industry. Manufacturers and industry players have now set up their own parameters to source and grade industrial hemp.

Hand-Feel/Hairiness

Many fabric manufacturers have mentioned that the hand-feel of hemp fabrics lacks smoothness and offers a different kind of texture, compared to linen fabrics.

Supply of Long-Staple Fiber

Selective players in the textile industry are importing long-staple fiber from China. The concern that there are not many options available to source good quality long-staple fibers hinders the potential growth.

Lack of Volume

India Market Assessment Report (2024)

Annexures Contact Profiles

AltMat About the Organization Segment: Fiber Manufacturer Products: Hemp fiber, flax fiber, and cellulose fiber

Organization Brief AltMat is a materials science company building supply chains and manufacturing sustainable fibers at scale. Two of their main product lines are: a) Altag: A natural cellulose fiber from agriculture residue. b) Bast fibers: Ready to spin of dry spinning lines hemp and flax fibers, made through sustainable processing and from non-Chinese supply chains.

Highlights from the Meeting • The overall production capacity is about 1,000 metric tons annually, which included both – agricultural waste fibers and hemp, majority being agricultural waste fibers. • AltMat was a 100% bast-based company and procured hemp in the ‘decorticated’ form (retted fiber) from Europe at a cost of about $0.8 per kilogram – which they further process to make fibers ready to spin. • The decorticated is the product after processing hemp hurds from hemp sticks. Decorticated hemp is only about 18% of the overall sticks.

Contact Shikha Shah, Founder Ahmedabad, Gujarat shikha@altmat.in www.altmat.in

India Market Assessment Report (2024)

Canvaloop About the Organization Segment: Fiber Manufacturer Products: Hemp fiber, linen fiber, banana fiber, agricultural waste fiber, hemp yarns, banana yarns, and pineapple yarns

Organization Brief Canvaloop currently uses hemp to make fiber – they call it Hemploop. Their current production capacity is 50 MT/month and working on new capacity of 300 MT/month to be ready by Q1 2025. They intend to focus on the key brand adoption opportunities, new developments, and supply chain. They work collaboratively on ideas using Hemploop with mills like WFB Baird and Raymond for potential customers, who are already using linen. Their main target is to focus on denim, working with mills like Anubha, KG and Arvind for Hemploop blend.

Highlights from the Meeting • They had partnered with brands such as Gap, for whom they made a product with 20% hemp at 40s count, and one with Target, by making jeans using 20% hemp. They showed us some samples during the meeting. • Canvaloop had inquired about hemp from the U.S., and had been in touch with Panda Biotech, but the prices were almost three times the quotes received from European suppliers.

Contact Shreyans Kokra, Founder Surat, Gujarat shreyans@canvaloop.com www.canvaloop.com

India Market Assessment Report (2024)

Gencrest About the Organization Segment: Fiber Manufacturer Products: Hemp fiber, banana fiber, agricultural waste fibers, hemp yarns, and banana yarns

Organization Brief Gencrest is a part of the Samta Group of Companies, headquartered in Mumbai. It works toward agricultural innovation through botanical-sap-based technology. They developed a fiber ‘Raysha,’ which is a hempbased product. Gencrest’s majority of the focus has been toward banana and other alternative fiber; their focus on hemp is only about 25%.

Highlights from the Meeting • They used mainly three parameters to grade hemp: denier, elasticity, and tenacity. HVI testing was not possible like cotton. Denier for hemp was only about 12, while that for banana was 30. • They had made a hemp T-shirt and showcased it to us; it had 55% hemp and 45% lyocell of 24 counts and about 150 GSM.

Contact Sandesh Saxena, General Manager – Fiber Sales Mumbai, Maharashtra sandesh.saxena@gencrest.com www.gencrest.com

India Market Assessment Report (2024)

Grasim GRASIM

About the Organization Segment: Yarn Manufacturer Products: Hemp yarns, linen yarns, and viscose filament yarns

Organization Brief Grasim is a part of the Aditya Birla Group, one of the major brands and retailers in textiles of India. Grasim’s brand, ‘Linen Club,’ is certified by the European Confederation of Linen and Hemp (CELC), being the only European agro-industrial organization federating all stages of production and transformation for linen and hemp. They have been one of the major importers for hemp (from China) in India.

Highlights from the Meeting • Two major challenges discussed during the meeting were sourcing of long-staple hemp in India and inverted duty structure on hemp fiber. • Many players in India using hemp are consuming short-staple fiber, and this segment is expected to grow; however, Grasim looks to focus more on long staple fiber for better quality end product. • As per the discussion, it was learnt that, given enough availability of quality fiber, the demand for hemp in India should grow in the upcoming years.

Contact Avik Mukherjee Mumbai, Maharashtra avik.mukherjee@adityabirla.com www.grasim.com

India Market Assessment Report (2024)

Sambandam Spinning Mills Limited About the Organization Segment: Yarn Manufacturer Products: Hemp yarn, linen yarn, cotton yarn, and other natural fiber yarns

Organization Brief Sambandam Spinning Mills, other than cotton, also focuses on other sustainable yarns, which include hemp, linen, wool, bamboo and other natural fibers. They are using 20% blend of hemp fiber with cotton, viscose, modal, lyocell, and polyester/recycled polyester.

Highlights from the Meeting • Sambandam started using hemp fiber during the COVID-19 lockdown period to explore new opportunities, and their spinning mill currently has a production capacity of 30 metric tons. • They are into dry and wet processing, and mainly into production of cottonized hemp after sourcing their fiber from France and Belgium. • According to them, the prices for hemp fiber were more stable compared to linen fiber in India.

Contact Niranjan Kumar, Director Salem, Tamil Nadu niranjan@sambandam.com www.sambandam.com

India Market Assessment Report (2024)

Texventures About the Organization Segment: Yarn Trader Products: Hemp yarn and linen yarn

Organization Brief Texventures is affiliated with Kingdom, a brand from China and Ethiopia that is into spinning yarns of linen and hemp fiber. It currently has a capacity of 4,000 MT for 100% wet-spun hemp yarns. They offer Ne 15 to 36 counts, which is equivalent to 44LEA and 100LEA.

Highlights from the Meeting • The realization of hemp fiber to yarn on an average has been about 55%, compared to 72% for cotton and 65% for linen. • The strength of hemp is higher compared to linen fiber. Hemp fiber has a strength of 4500 CSP*, while linen has a strength of 3000 CSP. • The hemp fabric experienced at Texventures was found to be relatively softer compared to linen fabric. *CSP — Count Strength Product

Contact Suneet Mehta, Director Mumbai, Maharashtra suneet@texventures.in www.texventures.in

India Market Assessment Report (2024)

Pallavaa Group About the Organization Segment: Yarn Manufacturer Products: Hemp yarn, linen yarn, cotton yarn, and other natural fiber yarns

Organization Brief Pallavaa is a spinning mill based out of Tamil Nadu, a major state for textiles in South India. They have been using hemp in very small quantities currently, but with more opportunity, they will look to scale things up. Currently, their production capacity is of 370 metric tons of yarns, 650,000 meters of fabric and 30 tons of knitted fabrics, including all fibers.

Highlights from the Meeting • When discussed about hemp production in India, they mentioned that it was negligible and most of it grown was wild hemp. Most of the industrial hemp used in India was imported. • Association with other cannabis has been one of the concerns for hemp in the market. The awareness and education about hemp fiber and its disassociation from other cannabis is important for the growth of hemp fiber consumption in India.

Contact Durai Palanisamy, Director Pallipalayam, Tamil Nadu durai@pallavaagroup.com www.pallavaagroup.com

India Market Assessment Report (2024)

Aquarelle India (CIEL Textile) About the Organization Segment: Apparel Manufacturer Products: Casual and denim shirting

Organization Brief Aquarelle India is a part of CIEL Textile, mainly into the production of casual shirting for men, women, and children. The firm has a production of more than 12 million shirts on an annual basis, with seven production units in Mauritius, Madagascar, and India. The firm has a turnover of more than USD 115 million.

Highlights from the Meeting • As per their experience with hemp fabrics, they found that the hand-feel for hemp fabrics did not meet the ideal standards and experienced rough texture/hairiness compared to linen fabrics. • During the meeting, they discussed that a blend of hemp and lyocell could work well and provide a better finishing for better look and feel. • Products such as shackets and apparel that don’t directly come in contact with the skin could also be explored better in their opinion.

Contact Anirwan Bansriyar Bengaluru, Karnataka anirwan@aquarelleindia.com cieltextile.com/woven#aquarelle

India Market Assessment Report (2024)

Shahi Exports About the Organization Segment: Apparel Manufacturer Products: Woven fabrics, knitted fabrics, and apparel

Organization Brief Established in 1974 by Mrs. Sarla Ahuja, Shahi has become one of India’s largest apparel manufacturers, operating more than 50 factories and three processing mills across eight states in the country. They are mainly into spinning, knitting, processing, weaving, and garmenting. Total fabric sourcing by knits business is 2,000 MT/month, and approximately 500 MT/month is outsourced and 1,500 MT is in-house combining Shivamogga and Tiruppur units.

Highlights from the Meeting • They have sourced hemp yarns from spinning mills such as Vardhaman, Pallavaa, and Sintex to make woven fabrics. The yarns sourced were 20s/30s counts. • Shahi had developed a Calvin Klein hoodie for PVH Europe made of hemp with a blend of cotton (80% cotton/20% hemp).

Contact Vinod Harihar Bengaluru, Karnataka vinod.harihar@shahi.co.in www.shahi.co.in

India Market Assessment Report (2024)

Govardhan Overseas About the Organization Segment: Fabric Manufacturer Products: Woven fabrics, knitted fabrics, and apparel

Organization Brief Established in 1994, Govardhan Overseas Pvt. Ltd. has built a strong reputation as a leading manufacturer and wholesaler of brocade fabric, pure linen fabric, cotton linen fabric, and linen silk fabric. Govardhan Overseas have been doing 100% linen in their two units and had very little experience with hemp fiber. Their production was about 250,000–325,000 meters of linen fabric per month, with a stock yarn capacity of about 200 tons.

Highlights from the Meeting • According to the discussion, they said that demand was not a major problem for India, as long as there is enough availability of the hemp fiber of the right quality. With enough supply, the demand would be expected to pick up within a year as the processing of the fiber is very similar to that of linen. • They do more piece dyeing on fabrics instead of yarn dyeing on linen and hemp fabrics. For hemp, natural hemp was not available, and they had to dye to make it look natural, which was not a good product.

Contact Pramod Goenka Bengaluru, Karnataka pramod@govardhan.org www.govardhan.net

India Market Assessment Report (2024)

GreenJams About the Organization Segment: Building Materials Products: Woven fabrics, knitted fabrics, and apparel

Organization Brief GreenJams is a cleantech enterprise that creates carbon-negative building materials, such as Agrocrete: a patented material that offers extraordinary strength and insulation, and it does so while cutting down construction times and construction cost. The company had made one of the strongest hempcretes in 2019, before developing Agrocrete.

Highlights from the Meeting • Awareness of hemp in the industry has been at a very nascent stage, and few people in the business know about it. As it does not remain feasible to use hempcretes, and other materials can fulfill the same with lesser price, the growth potential for hemp in the industry seems negligible at the moment. • In the building material industry, hempcretes are mainly used for insulation and generally used as an additional layer to the regular ones. In India, there is not much need for insulation as such.

Contact Tarun Jami Hyderabad, Telangana tarun@greenjams.org www.greenjams.org

India Market Assessment Report (2024)

National Industrial Hemp Council 1575 Eye Street, NW, Suite 300 Washington, DC 20005 USA +1.202.919.3750