{"id":30597,"date":"2024-10-09T18:02:36","date_gmt":"2024-10-09T12:32:36","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=30597"},"modified":"2025-07-11T18:00:09","modified_gmt":"2025-07-11T12:30:09","slug":"why-is-indias-textile-industry-struggling-to-perform-better","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/09-10-2024\/why-is-indias-textile-industry-struggling-to-perform-better","title":{"rendered":"Why is India’s Textile Industry Struggling to Perform Better?"},"content":{"rendered":"\n

Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n

Context<\/strong><\/h2>\n\n\n\n
    \n
  • India’s textile industry faced a challenging period, raising doubts about achieving the target of $350 billion<\/strong> annually by 2030.<\/strong><\/li>\n<\/ul>\n\n\n\n

    Textile Industry of India<\/strong><\/h2>\n\n\n\n
      \n
    • Share in Domestic Trade: <\/strong>The domestic apparel & textile industry in India contributes approx. 2.3 % to the country\u2019s GDP,<\/strong> 13% <\/strong>to industrial production and 12%<\/strong> to exports. <\/li>\n\n\n\n
    • Share in Global Trade: <\/strong>India has a 4% <\/strong>share of the global trade in textiles and apparel.<\/li>\n\n\n\n
    • Export: <\/strong>In FY22, India was the third largest textile exporter globally, enjoying a 5.4% share.<\/li>\n\n\n\n
    • Production of Raw Material: <\/strong>India is one of the largest producers of cotton and jute in the world. India is also the 2nd largest producer of silk in the world and 95% of the world\u2019s hand-woven fabric comes from India. <\/li>\n\n\n\n
    • Employment Generation: <\/strong>The industry is the 2nd largest employer in the country providing direct employment to 45 million people and 100 million people in the allied sector. <\/li>\n\n\n\n
    • Regions:<\/strong> Andhra Pradesh, Telangana, Haryana, Jharkhand, and Gujarat are the top textile and clothing manufacturing states in India.<\/li>\n<\/ul>\n\n\n\n

      Challenges Faced by the Textile Industry <\/strong><\/h2>\n\n\n\n
        \n
      • Expensive Raw Material: <\/strong> Recent Quality Control Orders<\/strong> issued for fabric imports have complicated the process of bringing in essential raw material.\n
          \n
        • This scenario forces exporters to use expensive domestic supplies, making Indian garments overpriced and unappealing to global buyers who prefer specific fabric sources.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
        • Cotton Price Fluctuations:<\/strong> India is a major producer and consumer of cotton. Fluctuations in cotton prices impact the cost of production for textile manufacturers. <\/li>\n\n\n\n
        • Imports from Bangladesh:<\/strong> With Bangladesh having duty-free access<\/strong> to the Indian market, those garments are available at 15-20% less cost in India.<\/strong>\n
            \n
          • When fabric is imported, jobs are lost in cotton, spinning, knitting, compacting, and processing segments in India.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
          • Competition in the International Market:<\/strong> The overall cost difference between Indian and Bangladesh garments should be about 2-3%, but the labor costs are lesser in Bangladesh by almost 30%.\n
              \n
            • Between 2013 and 2023, garment exports from Vietnam have grown nearly 82% <\/strong>to hit $33.4 billion while that of Bangladesh has grown nearly 70% <\/strong>to hit $43.8 billion. <\/li>\n<\/ul>\n<\/li>\n\n\n\n
            • Infrastructure Constraints<\/strong>: Infrastructure challenges, including inadequate transportation systems, power shortages, and outdated technology, hinder the efficiency of the textile manufacturing process.<\/li>\n\n\n\n
            • Technology Upgradation:<\/strong> Many textile units in India still use outdated machinery and technology. <\/li>\n<\/ul>\n\n\n\n

              Initiatives by Government of India for the Growth of the Textile <\/strong><\/h2>\n\n\n\n
                \n
              • Amended Technology Upgradation Fund Scheme (ATUFS): <\/strong>To achieve the vision of generating employment and promoting exports through \u201cMake in India\u2019\u2019 with “Zero effect and Zero defect” in manufacturing, ATUFS was launched in 2016<\/strong> to provide credit linked Capital Investment Subsidy (CIS). <\/li>\n\n\n\n
              • Scheme for Capacity Building in Textile Sector (SAMARTH):<\/strong> To address the skilled manpower requirement across the textile sector, the scheme was formulated, under the broad policy guidelines of \u201cSkill India\u201d<\/strong> initiative.<\/li>\n\n\n\n
              • National Technical Textile Mission:<\/strong> The Mission for a period of 4 years<\/strong> (2020-21 to 2023-24) was approved for developing usage of technical textiles in various flagship missions, programmes of the country including strategic sectors.<\/li>\n\n\n\n
              • Production Linked Incentive (PLI) Scheme<\/strong> – The PLI Scheme for Textiles to promote production of Manmade Fibre (MMF) apparel, MMF Fabrics and Products of Technical Textiles in the country.<\/li>\n\n\n\n
              • PM-MITRA: <\/strong>To boost employment generation through setting up of 7 PM Mega Integrated Textile Region and Apparel (PM MITRA)<\/strong> Parks in Greenfield \/Brownfield sites with world class infrastructure.<\/li>\n\n\n\n
              • Scheme for Integrated Textile Parks (SITP):<\/strong> SITP is designed to promote textile industry clusters by providing infrastructure support, including common facilities, utilities, and services.\n
                  \n
                • The goal is to encourage a more organized and efficient approach to textile manufacturing.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
                • Integrated Skill Development Scheme (ISDS): <\/strong>ISDS focuses on skill development in the textile sector to address the industry’s labor challenges.\n
                    \n
                  • It aims to provide training to workers and enhance their employability, contributing to the overall growth of the sector.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n

                    Way Ahead<\/strong><\/h2>\n\n\n\n
                      \n
                    • The industry continues to hope for a revival in demand but, what the industry needs urgently is policy intervention at the Centre and State-levels and holistic measures to improve competitiveness.<\/li>\n\n\n\n
                    • So, on the lines of the \u2018Make in India\u2019 campaign, the government should encourage purchase of Indian garments. <\/li>\n\n\n\n
                    • While the current volume of imports are not much compared with the overall size of the domestic market, diversion of these orders to local manufacturers will bolster production.<\/li>\n<\/ul>\n\n\n\n

                      Source: TH<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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