TEXTILE SECTOR OF INDIA
TEXTILE SECTOR OF INDIA
Brief Summary of Indian Textile Industry
- 1st in global jute production.
- 7 Million Tonnes of FBP in 2013-14. 63% of the world’s market share in textiles and garments.
- 2nd largest textile manufacturer in the world. 2nd largest producer of silk and cotton.
- 24% of the world’s spindles. 8% of the world’s rotors.
Strong Aspects of India Textile Industry
- India has the second largest manufacturing capacity globally.
- The Indian textile industry accounts for about 24% of the world’s spindle capacity and 8% of global rotor capacity.
- India has the highest loom capacity (including hand looms) with 63% of the world’s market share.
- India accounts for about 14% of the world’s production of textile fiber and yarn and is the largest producer of jute and the second largest producer of silk and cotton.
- A strong production base of a wide range of fiber/yarn from natural fibers like cotton/jute, silk and wool to synthetic/man-made fibers like polyester, viscose, nylon and acrylic.
- Increased penetration of organized retail, favorable demographics and rising income levels to drive textile demand.
- India enjoys a comparative advantage in terms of skilled manpower and cost of production over major textile producers.
- Abundant raw material and increasing demand for exports to boost fibre production.
- Abundant availability of raw materials such as cotton, wool, silk and jute.
- Textile sector, being labor-intensive, should have been an ideal candidate for a push as part of the Prime Minister’s pet ‘Make in India’ initiative. But there are some problems which need to be addressed.
Problems which Indian Textile sector is facing :
- Nearly half of India’s power looms are at a standstill: the spinning industry in the northern and southern regions has pressed in shutdowns of as much as 15 to 20 per cent of production capacity.
- The textile industry as a whole is reeling under high input and transaction costs.
- The products find it hard to compete in export markets, where India-made yarn, fabrics and garments attract duties respectively at rates of 3.5, 8.5 and 14 per cent.
- Yet, Pakistan, Vietnam and Cambodia enjoy zero-duty access in some categories in the U.S., EU and China.
- ‘Partisan’ role played by various powerful lobbies of sub-sectors of Indian Textile Industry. Government has increasingly become vulnerable to such machinations. Raw cotton and cotton yarn exports, at the expense of Indian industry, has happened and is likely to happen, because of such lobbies.
What Should be the course of action?
- Media should start focusing on how these lobbies are decimating diversity in Indian textile sector, and promoting monopolization in the name of competitiveness and free markets.
- Tinkering with the cotton market through Minimum Support Price operations must be avoided.
- Instead, direct cash subsidy benefit to farmers could help reform the sector.
- The Technology Upgradation Fund Scheme that was originally launched in 1999, is a ready framework available to the Centre to address the needs of the textile sector. The scheme, that is estimated to have so far resulted in investments of over Rs.3,00,000 crore in the whole textile value chain, will expire in March 2017. It should be extended.
- Providing cheaper loans on government guarantee from banks and assistance to handloom and power loom sector can be a good step. Instead of giving compensation after loss government should assist them as they could become self-dependent and contributor to economy.
- A comprehensive National Textile Policy must be announced at the earliest to create a level playing field with regard to tariff rates, raw material costs, cost of funding and transaction costs.
Each power loom provides work to about 2.5 workers. Closures all across the country could endanger livelihoods on a large scale. Conversely, a healthy textile sector could potentially create millions of jobs. That should be the target.