Role of the Textile Industry in National Economy and the Government Initiative

When the Union Cabinet passed simplified labour laws along with faster modes for upgradation of technology, it brought cheer to those involved in the textile industry. They also announced an incentive scheme amounting to Rs6006 crore for the made-up section of the garment and textile industry that comprise mainly of towels and bedsheets.

Boost given by the Government

The resulting sourcing by the Indian textile mills will boost the Made in India drive launched by the Government. The textile sector will witness lower growth compared to that of the previous year. The reason for this is a lowered demand in the global market. The reason the Government is so keen on boosting the textile production is that it contributes to a huge portion of the Indian economy.

Share of the textile industry

Of the total, the textile exports contribute 30% which is not surprising considering that India stand next only to China and the US in the overall production of cotton. There remain many links in the industry that need to be strengthened. Some of these were weaving and finishing that needed more investment in the R&D.

Improve the interaction

Raising awareness is another key issue. Improved interaction between Indian trade bodies such as SIMA and SRTEPC and international ones such as the Europe-based EDANA and US-based IFAI and INDA will help in this regard. On the home front, this will take the formof collaboration between the various ministries such as the Finance and Textiles and the research scholars. The idea behind such a venture is to establish and deliver industry specific solutions and improve the problem-solving capacity. This will make the industry competitive and economical.

Shortcomings in the progress

The emerging textile market is seeing a boom especially in South East Asian regions and in South America. And yet, there are observers who feel that things are not going so well for the textile factory in India. The reason they say for this is four-fold. One is the demand and increased price for the power in regions like TamilNadu which some of the leading producers of yarn and fabric in the country.

Add global recession and you have a well-known scenario where the mind is willing but the heart knows no way forward. The price of raw materials such as cotton is also playing a decisive role in the undoing of the well-being of the industry. And lastly, the retail giants such as Wal-Mart have decreased their orders resulting in lesser demand overseas.

Impact in developing countries

The textile industry contributes to the employment for a large number of people. These are two times more than the wage earned by those in the agricultural sector. In fact, this is the largest industry after agriculture in many developing countries like Bangladesh. For instance, Bangladesh had an 87.6% share and Pakistan had a two-third share of textile in the total merchandise exports.

The development strategies need to focus on knowledge spill-over and learn by doing techniques. Along with boosting the exports, the new laws will provide employment across all the textile firms in India for about 11 lakh people. This will result in enhanced benefits for the employees in the garment and textile sector.

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