Technology upgrade and scaling up of capacity will have to be the way forward for addressing India’s stagnancy in exports of textiles and apparel, former Finance Minister P. Chidambaram said in Coimbatore on Wednesday.
When India could demonstrate its technological progress in space and nuclear technologies, there was no reason why the country should not invest in developing the labour-intensive garments industry which was next only to agriculture in employment generation, the former Finance Minister said, taking part in a discussion hosted by All India Professionals’ Congress.
As the second largest cotton growing country in the world, and with the largest population, India should technically have the largest labour force and high labour participation. India’s economic future depends on employing labour force, Mr. Chidambaram said, while highlighting his concern over 26 percent of the young people in the country possessing neither the education nor training for employment.
From being the leader of garments and apparel exports, India has fallen behind Bangladesh, a smaller country, and Vietnam, an even smaller country. If the two smaller countries have benefitted more from China’s decline in the textiles sector (due to its focus on production of higher value products), it was because of India’s prioritisation of electronics and other capital-intensive industries at the cost of neglect of labour-intensive industries, the former Finance Minister said, adding that the 13 % rise in tariff has only added to the disadvantage. Also, the average size of textile mills was much smaller when compared to Bangladesh and Vietnam.
While there was a 15 % decline in apparel exports, under the Modi regime, from 2016 to 2023, Bangladesh registered 65% rise. Citing the data of Apparel Export Promotion Council, Mr. Chidambaram said India had, in 2022-23, exported 16.2 billion US dollars worth of garments. It declined to 14.5 billion dollars in 2023-24, and for the current year, some growth is expected, but below the level of 2022-23. The onus was on the Centre to find the solution, Mr. Chidambaram said.
Rathin Roy, Director at National Institute of Public Finance and Policy and former member of the Prime Minister’s Economic Advisory Council, observed that competitiveness can be possible when an industry grows organically, citing the example of pharmacy sector. The textile sector, he opined, has to produce enough for its own people at competitive rates, in order to be strong in exports. The internal demand was humongous, he said.
Chairman of All India Professionals’ Congress and Political Economist Praveen Chakravarthy exuded hope that the Centre will listen to the voice of the opposition for betterment of textile sector, citing the points ideated in the manifesto of Congress party getting incorporated in the Budget by the Finance Ministry.
Textile exporters and other stakeholders urged Mr. Chidambaram to voice their demand for Free Trade Agreement with Europe in order to be on an even keel with Bangladesh in textile exports.
They called for addressing the infrastructure and technology shortcomings, and the setback caused due to escalation in power tariff. The policy must be tweaked to enable small and medium-level manufacturers leverage the utility of Technology Upgradation Fund, and Performance Linked Incentive, the participants emphasised.
Published - October 02, 2024 09:48 pm IST
