Thermal Cost of India’s Textile Surge

Syllabus: GS3/Economy; Industry

Context

• India’s textile industry plays a crucial role in employment, exports, and rural development. However, it faces emerging structural challenges like particularly climate-induced heat stress, which threatens its long-term sustainability.

Overview of the India’s Textile Industry

• The Indian textile industry is diverse and vertically integrated, spanning cotton cultivation, spinning, weaving, and processing, garment manufacturing and exports.
• It contributes significantly to industrial production and GDP, and accounts for a major share of manufacturing employment, especially informal labour.
• It dominates rural and semi-urban economies, linking agriculture with industry.

Economic Significance

• India’s Textile and apparel industry contributes about 2% to GDP, accounts for about 11% of manufacturing GVA, and 8.63% to exports, with an estimated size of USD 179 billion.
• Export Basket: India is the 6th largest global exporter, with a share of about 4% in world exports in this segment.
  • In 2025, India’s textile sector recorded export growth across 118 countries and export destinations.
  • Strong presence in global markets like the USA, EU, and Middle East.
• Employment: It is the second largest employment generator, after agriculture, with over 45 million people employed directly.
  • As per the Economic Survey 2026-27, textiles industry has a 9% share in employment across 8 major industry groups.
• Future Projections: Indian textile market currently ranks fifth globally, and the government is actively working to accelerate this growth to a rate of 15-20% over the next five years.

Structure of the Industry

• Organised Sector: Large mills, export-oriented units; capital-intensive and technology-driven
• Unorganised Sector: Handlooms, powerlooms, small garment units; labour-intensive, low productivity.
  • This dual structure creates efficiency gaps and policy challenges.

India in the Global Textile Value Chain

• India is gaining from supply chain diversification (China+1 strategy), and shifting orders due to instability in competing countries.
  • However, global trade is characterised by strict delivery deadlines, and price pressures from multinational brands.
  • It creates vulnerability for Indian manufacturers with limited bargaining power.

Emerging Challenge in India’s Textile Sector

• Thermodynamic Constraint:
  • Worker-Level Impact: At 40°C, productivity can fall by about 50%, and workers lose wages due to absence of cooling breaks.
  • Macro-Level Impact: India lost about 259 billion labour hours annually (2001–2020), and output declined by almost 2% per 1°C rise.
    • In 2024 alone, losses reached ~247 billion hours.
  • Factory-Level Impact: Production capacity drops up to 50% during extreme heat; increased health risks (heatstroke, dehydration).
• Future Projections: By 2030, India may lose 5.8% of daily working hours due to heat.
  • Equivalent to 34 million full-time jobs lost.
• Economic Challenges: Low value addition compared to global competitors, fragmented supply chain, and dependence on cotton.
  • Labour issues like informal employment, and lack of social security and workplace safety.
• Supply Chain Trap:
  • Global Pressures: Strict delivery deadlines, heavy penalties for delays, and price pressures from international brands.
  • Local Constraints: Workers cannot exceed physiological limits, limited bargaining power of MSMEs, and lack of climate-resilient infrastructure

Government Initiatives

• Policy & Institutional Support: Textile policies under Ministry of Textiles, export promotion schemes.
• Infrastructure Development: Textile parks and cluster development, and support for MSMEs.
• Skill Development: Training programs under skill missions, and focus on labour-intensive sectors.
• Energy Efficiency: Bureau of Energy Efficiency initiatives for textile units.

Way Forward: Climate-Smart Industrialisation

• Policy Measures: Recognise heat stress as a supply chain risk; and integrate climate projections into trade and industrial policy.
• Workplace Reforms: Mandatory heat-action plans, enforceable temperature thresholds, and cooling breaks and health monitoring.
• Financial Interventions: Climate-linked lending by banks, and subsidised credit for cooling technologies.
• Labour Protection: Legal provisions for heat stress safeguards, and access to water, shade, and rest areas
• Innovation: R&D in wearable cooling tech, heat-resilient cotton, and energy-efficient manufacturing.
• Global Responsibility: Fair pricing by international brands, and longer lead times to accommodate climate realities.

Conclusion

• The global textile industry has long assumed that production costs are fixed. However, it ignored a critical variable i.e. human thermoregulation.
• India has the potential to become a global manufacturing hub, supported by strong domestic resources and rising global demand. However, climate change, particularly heat stress poses a structural threat.
• The future of the sector depends on whether India can transition from a low-cost labour model to a climate-resilient, worker-centric, and sustainable industrial system.

Source: TH