Intro: India should be the world's largest manufacturer and exporter of textiles in keeping with her resources and traditional strengths in this sector.
Let us cast a look at the following statistics. They underline the importance of textile sector in India’s re-emergence as a manufacturing and industrial giant.
India has the second largest textiles manufacturing capacity globally. It has the highest loom capacity (including hand looms) with 63 per cent of the world’s market share. India accounts for about 14 per cent of the world’s production of textile fibre and yarn and is the largest producer of jute and the second largest producer of silk and cotton. The sector contributes 14 per cent to industrial production, 4 per cent to India’s Gross Domestic Product (GDP) and constitutes 13 per cent of the country’s export earnings. With over 45 million people employed directly, the industry is one of the largest sources of employment generation in the country. The domestic textile and apparel industry in India is estimated to reach USD 100 Billion by 2016-17 from USD 67 Billion in 2013-14. Exports in textiles and apparel from India are expected to increase to USD 65 billion by 2016-17 from USD 40 billion in 2013-14. The total fabric production in India is expected to grow to 112 billion square metres by 2016-17 from 64 billion square metres in 2013-14. India’s fibre production in 2013-14 is 7 million tonnes and is expected to reach 10 million tonnes in 2016-17.
With consumerism and disposable income on the rise, the retail sector has experienced rapid growth in the past decade, with many global players entering the Indian market. Centres of excellence focused on testing and evaluation as well as resource centres and training facilities have been set up. As per the plan for 2012-17, the Integrated Skill Development Scheme aims to train over 2,675,000 people up to 2017, covering all sub-sectors of the textile sector – textiles and apparel, handicrafts, handlooms, jute and sericulture. Changing lifestyles and increasing demand for quality products are set to fuel the need for apparel. 100 per cent Foreign Direct Investment (FDI) is allowed under the automatic route in the textile sector; investment is subject to all applicable regulations and laws.
Technology Upgradation Fund Scheme has infused investment of more than Indian Rupee (INR) 2,500 billion in the industry. Support has been extended for modernisation and upgradation by providing credit at reduced rates and capital subsidies. Scheme for Integrated Textile Parks provides world class infrastructure to new textile units. To date, 57 Textile Parks have been sanctioned with an investment of INR 60 billion. By 2017, 25 more Textile Parks are to be sanctioned. Integrated Processing Development Scheme for sanctioning processing parks has been initiated. INR 5 billion has been earmarked for this scheme. Integrated Skill Development Scheme has provided training to 1.5 million people to cover all sub-sectors of textiles such as Textile and Apparel, Handicrafts, Handlooms, Jute and Sericulture.
Incentives of fiscal nature in the form of duty concessions for specified raw materials or finished products, allocation of specific sums of funds for trade promotion of certain textile items, and establishment of mega textile clusters, tax incentives, State incentives, export incentives and area based incentives have been announced, besides other budgetary provisions for promoting textiles manufacture.
We need to understand why India's pre-eminent position as one leading manufacturer-exporter of textiles has been allowed to be eroded over the last three decades. India's cotton hosiery garments industry was a flourishing industry in sixties, seventies, eighties and into the late nineties. The small scale export industry clusters of Tirupur were recording a consistent export growth rate of more than 30 per cent during the above period.
Today, that industry cluster is practically non-existent. What happened to Ahmedabad, the Manchester of India? Its sharp competitive edge in yarn and textiles was allowed to be lost to the global economic forces emanating from the inequitable regulations of World Trade Organization (WTO) including General Agreement on Tariffs and Trade (GATT). These forces also had their telling effect on the garment export industries of Delhi and Ludhiana.
We failed to modernise and professionalise our industry at fast pace and gradually lost a significant portion of our textile export market to Indonesia, Malaysia, China and even Bangladesh. This needs to be reversed. And assiduous implementations of PM Modi's agenda under the ‘Make in India Programme’ will surely make it happen.
(The writer is a senior columnist)