INDIAN TEXTILES INDUSTRY

INDIAN TEXTILES INDUSTRY   , Daily Current Affairs , RACE IAS : Best IAS Coaching in Lucknow 

Mains Examination: General Studies 3

(Indian Economy)

Reference :

  • The textile industry in India has a rich history dating back centuries. It has been playing an important role in the country's economy. But despite the reformative steps taken by the government in the last few years, the Indian textile industry continues to face several challenges.

Current status of the textile industry:

  • India ranks second in terms of textile production and second largest textile exporter in the world. The textile industry is the second largest employment generating sector in the country after agriculture.
  • It contributes 2.3% of India's GDP, 7% of industrial production, 12% of India's export earnings and more than 21% of total employment.
  • India ranks sixth in the world in the production of technical textiles with a global share of 6%.
  • India is the largest producer of cotton and jute in the world.
  • Technical textiles are functional fabrics that have applications in various industries including automobiles, civil engineering and construction, agriculture, health care, industrial safety, personal protection, etc.
  • India is the second largest producer of silk in the world, accounting for 95% of the world's handwoven garments.
  • At present, about 4.5 crore people are directly employed in the textile industry and about 6 crore people are indirectly employed.
  • India is ready to establish its monopoly in the global 'readymade garment' market. The US accounts for the largest share of 27 per cent of total textile and apparel exports from India. This is followed by about 18 percent to the European Union, about 12 percent to Bangladesh and about 6 percent to the United Arab Emirates.

Challenges Before the Country's textile industry:

  • In this, lack of technology upgradation, research innovation and latest techniques is affecting the productivity.
  • More than half of the workers in the textile industry do not have the skills of the new technology.
  • Many garment units lag far behind many of their counterparts across Asia due to infrastructural constraints.
  • The rate of adoption of new technology in the existing textile units in the country is very slow.
  • Apart from these, issues like high GST on textiles, challenges related to global standards in export market and child labor in textile production are seen as hindrances in the rapidly growing textile industry.
  • The average size of textile units in India is 100 machines, which is very low compared to Bangladesh, which has an average of at least 500 machines per factory.
  • There is a lack of foreign investment in the Indian textile industry, which is a matter of concern.
  • Exports from India's textile sector have suffered due to giving preferential subsidies to countries like Bangladesh and Vietnam.
  • Bangladesh imports Chinese yarn, makes clothes using its cheap labor and exports such clothes to India without any import duty. As such, the duty free market access given to Bangladesh is facilitating indirect entry of Chinese textiles into India.
  • Cheap imports of garments from China and some other countries in the country are hurting the domestic textile industry in some areas. India being an emerging market is also facing the disadvantage of tariffs imposed by textile importing countries. Sri Lanka and many African and other countries enjoy duty-free access to various markets around the world, even as Indian textiles appear to be comparatively less competitive in overseas markets.

Major Initiatives of Government of India:

PM Mitra Mega Textile Park Scheme 2023

  • PM Mitra Mega Textile Park Scheme 2023, with an allocation of Rs 4,445 crore, to be implemented in seven states of the country - Tamil Nadu, Telangana, Karnataka, Maharashtra, Gujarat, Madhya Pradesh and Uttar Pradesh to meet the goals of the textile industry in the next five years.
  • The PM Mitra Mega Textile Park will provide an opportunity for an integrated textile value chain from spinning, weaving, processing, dyeing and printing to fabric manufacturing at a single site.
  • Each Mega Textile Park will generate about one lakh direct and two lakh indirect employment opportunities. In this situation, a total of 21 lakh new employment opportunities will be created. This will provide a level playing field to the domestic manufacturers in the international textile market.
  • Along with this, looking at the special incentives of the textile industry under the new FTP applicable from April 1, 2023, PM Mitra Mega Textile Park Scheme has been added as an additional scheme for claiming benefits under Export Promotion Capital Goods (EPCG).
  • Special Advance Authorization Scheme for apparel and textile exports on self-declaration basis has been extended to facilitate speedy execution of export orders.

Production Linked Incentive (PLI) Scheme

  • In order to make India's textile industry globally competitive, to increase quality production and exports, the government has launched a Production Linked Incentive (PLI) scheme with an approved outlay of Rs 10,683 crore, taking a major step towards creating a self-reliant India.
  • Government of India has allowed 100% automation for the textile industry.
  • Revised Technology Upgradation Fund Scheme, Scheme for Integrated Textile Parks, Schemes for capacity building in textile sector implemented to make textile industry competitive at global level are yielding favorable results.
  • Various benefits are being given by the government on exports being made from March 23, 2023, under the Duty Drawback Scheme. In order to increase the trade of eighteen items of textile sector including saree and lungi, they are also being given benefits under exemption of duties and taxes on export products.
  • Not only this, on April 11, 2023, the Ministry of Textiles has issued quality control orders to produce thirty one geotextile and twelve 'protective textile' products as per global standards.
  • In the year 2015, the government had started the Amended Technology Upgradation Fund Scheme (ATUFS) to make the textile industry progressive.
  • Integrated Textile Park scheme was launched to create world class infrastructure facilities in textile units.
  • To overcome the shortage of skilled workers, the Samarth scheme was started for capacity building in the textile sector.
  • To promote infrastructure, capacity building and marketing in all sectors of the textile industry, the North Eastern Region Textile Promotion Scheme has been launched.
  • Power-Tex India was launched with the objective of introducing new research and development, new markets, branding, subsidies and welfare schemes for workers in powerloom textiles.
  • ReshamSamagraYojana: The scheme focuses on improving the quality and productivity of domestic silk so as to reduce the country's dependence on imported silk.
  • Jute Icare: This pilot project, launched in the year 2015, aims to provide certified seeds to jute cultivators at subsidized rates and popularize several newly developed seeding technologies under water limited conditions. .
  • National Technical Textiles Mission: It aims to position the country as a global leader in technical textiles and increase the use of technical textiles in the domestic market. It aims to take the domestic market size from US$ 40 billion to US$ 50 billion by the year 2024.

Way Forward :

  • At present there is a need to address the challenges faced by the textile industry in the country to ensure quality production, export and employment growth in the textile sector.
  • There is a need to focus on technology upgradation within the textile industry and increase in weaving capacity to increase productivity.
  • State governments should give capital subsidy to increase the market of textile sector.
  • There is a need to provide one window solution to solve the problems of textile industry.
  • Yarn prices should be fixed for each year to enable a fixed price on yarn on an annual basis.
  • To increase research and development in the textile industry, there is a need to train the workforce with new age skills to meet the new technological requirements of textile production.
  • More loans and subsidies should be provided to attract young entrepreneurs to the textile sector.
  • Indian textile brands should be supported more to make them competitive with the products of international brands in the Indian market.
  • There has to be greater focus on training garment exporters to develop robust customer management systems in the overseas market for Indian exporters and to win the trust of global traders of garments.
  • Undoubtedly, at this time there are great opportunities for the Indian textile industry to move forward in the global market and become a major supplier. In such a situation, along with better implementation of various schemes related to the development of textile industry, indigenous development of machinery and equipment will have to be met and local skills in design, engineering will have to be harnessed.
  • Training and grant to selected students in premier engineering institutes related to textile industry to prepare them as skilled workers of textile industry.
  • Experts associated with the textile industry believe that India's new Foreign Trade Policy (FTP) 2023 and PM Mitra Mega Textile Park Scheme 2023 have created possibilities of textile production and export growth to achieve them, it is necessary that the challenges facing the sector are addressed appropriately.

Source: Jansatta

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Mains Exam Question

Explaining the current status of the Indian textile industry, suggest measures to solve the challenges faced by it.