With a little recalibration, India can seize the opportunity and establish itself as a giant in the global textile landscape, where the Indian tiger roars while the dragon cedes market share.
Mar 1, 2025 14:54 IST First published on: Mar 1, 2025 at 07:00 IST
One goal that India must prioritise if it has to become Viksit Bharat by 2047 is job creation. The textiles and apparel industry is India’s second-largest employer after agriculture, providing direct employment to 45 million people. The sector is expected to motor on at an annual growth rate of 10 per cent and become a USD 250 billion market by 2030, with the potential to add millions of more jobs. If our exports grow from the current USD 45 billion to the targeted USD 100 billion, and if the economy grows at 6-7 per cent a year, textiles can add up to one million jobs every year from now to 2030 — 10 per cent of what the country needs.
This is all very good. But we have an opportunity to be great. China, Bangladesh and Vietnam, the world’s three leading textile exporters, are undergoing shifts for reasons ranging from geopolitics to internal turmoil. Global markets are increasingly looking towards India. We have a lot going for us — a relatively stable economy and government, good relationships with the world’s leading nations, a centuries-old textile tradition and a young population.
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The government has been forward-looking in its support of the industry. It has approved various schemes with outlays of several thousand crores that incentivise the sector — such as the Pradhan Mantri Mega Integrated Textile Region and Apparel (PM MITRA) Parks, the Production Linked Incentive (PLI) Scheme and the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme.
The USD 100 billion Indian textile market presents a huge domestic opportunity. A burgeoning middle class is driving demand and this trend is further amplified by Gen Z. The mainstreaming of e-commerce, and the emergence of quick commerce, has eased people’s access to apparel and fashion. While there are lulls during a crisis like Covid or during recessionary phases, Indians retain a healthy consumption appetite.
With so many pieces of the jigsaw ready, how do we ensure labour efficiency and thereby generate more jobs and increase market share? India suffers a 15-20 per cent cost disadvantage compared to competing countries like Bangladesh and Vietnam. A big component of this is lower efficiency in the labour-intensive garment manufacturing process. How do we remedy this?
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These are some of my suggestions. Often in India, if the jobs are in one hub, the workers are elsewhere. Even Tiruppur, the apparel mega-hub in Tamil Nadu, has a labour shortage because industries there are growing fast and workers quit often. On the other hand, in places like Uttar Pradesh, Bihar, Odisha and Madhya Pradesh, where jobs need to be created, there’s barely any industry. India will have to create jobs where they are required. That is why it is important to build the PM MITRA parks in areas where labour is available.
The rate of attrition in our textile industry is as high as 10 per cent. Workers often have to spend a big part of their salary in transport and accommodation and are liable to leave their present employer even for a small wage hike. Many of them tend to be migrants. This has a huge impact on production and eventually the bottom-line. Implementing industrial housing policy can be a game-changer. It could be a combination of a grant, easing FSI regulation or giving GST exemptions for industrial housing.
Creating living quarters for workers near factories, as is done in countries like China, could reduce absenteeism, improve staff retention, and lead to higher productivity. It will also increase the amount of take-home salary for the workers. Textiles are a low-margin business, however. Manufacturers alone cannot pick up the tab for such huge infrastructure. It will need to be supported by the government.
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A defining feature of the garment industry is that women represent 90 per cent of its blue-collar workforce. Stable jobs in safe environments empower women. It can bring them into the formal economy and take the nation forward.
Automation is often associated with efficiency and reduced manpower. However, technology and human talent will continue to coexist. When efficiency goes up, the industry will grow, creating more jobs.
The challenges may seem formidable but are surmountable given India’s demography and economic heft. With a little recalibration, India can seize the opportunity and establish itself as a giant in the global textile landscape, where the Indian tiger roars while the dragon cedes market share.
The writer is vice chairman, Arvind Limited
