The Indian textile industry has historically played a critical role in the industrialisation of the country, and in spite of the setback to Indian looms due to imperial policies, India saw a flourishing textile industry since the beginning of the 20th century. One subsector of the textile industry which is contributing significantly to the country’s economy today is the apparel segment, with Indian manufacturers vying to capture a larger world pie through exports, as well as facilitating a boom within the domestic market. Indian designers have begun to make a mark on the international fashion scene, Indian garments today find a market in the US, Europe and other blocks, and a rapidly increasing middle class within the country with huge purchasing power is fuelling the growth of a mammoth apparel market within the domestic space. The sector never had it so good before. A few projections about the sector are stated here:
- Confederation of Indian Industry -Ernst & Young’s textile and apparel report 2007 — ‘India in Global textile eco-system’ — has forecast a higher growth trajectory for India’s textile and apparel sector with sourcing from India by global retailers set to increase at a combined annual growth rate of 12 per cent. It says that the sourcing market, pegged at $22-25 billion in 2008, could go up to $35-37 billion by 2011. The report says that the trigger for this surge would be demand from top global retailers who will be attracted by India’s abundant multi-fibre based raw material, well established production bases, design capabilities and knowledge/skilled labour. India’s strong position as the third largest cotton producer in the world will stand it in good stead, as it accounts for 22 per cent of the global spindleage and 61 per cent of the global loomage.
- According to the Government of India, while the textiles industry is expected to grow at a rate of 16 per cent in value terms and reach the level of US $115 billion (exports US $55 billion; domestic market US $60 billion) by 2012, the clothing and apparel sub-sector are expected to grow at a rate of 16 per cent in volume terms and 21 per cent in value terms by 2012. It estimates that the total investment in the textiles and clothing industry will reach Rs 1,50,600 crores by 2012, generating 17.37 million jobs by 2012 of which 12.02 million will be direct jobs.
- For the domestic market, ASSOCHAM estimates that the Indian apparel market, which was worth Rs 1,11,000 crore in March 2007, will touch a size of 1,30,000 crore by 2008.
Areas of concern
In spite of the great opportunities, however, the problems besetting the sector need to be addressed first. According to the CII and Ernst & Young report, the Indian textile and apparel industry has to reckon with low productivity, technology obsolescence, strong rupee leading to smaller orders and competition from low-cost countries like China, Turkey, Vietnam, Pakistan, Sri Lanka and Bangladesh. Extraneous factors like seasonability of demand and labour laws also impact the demand. However, these factors notwithstanding, the industry can certainly put its own house in order by focusing on quality control, to make their products world class. This calls for building up a highly skilled work force which can bring about a change throughout the supply chain: upper management and middle management, including merchandiser, who can make sound plans, make realistic deadlines, procure right shade and texture of material timely; designers who understand international consumers’ requirements; and skilled and semiskilled workers who can execute the task with precision.
The exporters have to contend with logistical issues too. For example, there could be a six-month gap between samples being sent to the buyer country and the final order being placed. In this time period, the cloth, buttons etc could have been exhausted and prices could have spiralled, leading to a need for revision of prices. Thus a seamless supply chain, control over retail and distribution, meticulous attention to quality are issues that manufacturers will have to address.
While the employment potential of the sector is huge — according to the Government of India projections, the subsector will create an employment for 56.40 lakh people — efforts will need to be made for their adequate training, inculcating discipline, and reforming rigid labour laws.
Mending
Considering its potential contribution to the GDP and also its job generation potential, the Government has turned its attention to the sector in the last few years, and introduced a number of reforms. The sector had been reserved for small-scale industry, preventing the manufacturing units from achieving international standards. Thus the Government dereserved the woven apparel sector in 2002-03, and the knit-wear sector in 2005-06. Due to the impetus given to the sector in the 10th Five Year Plan, it witnessed a growth of as high as 20 per cent, and an increase in the export of readymade garments as high as 28 per cent in 2005-06. The government is making an effort at reforming the labour laws, brand promotion through Public Private Partnership (PPP) route, establishment of fashion hubs and marketing outlets. Among the schemes it has initiated are:
Technology Upgradation Fund Scheme (TUFS): Launched in 1999, for five years, now extended till 2012.
Scheme for Integrated Textiles Park (SITP): The scheme was launched in 2002, under PPP mode. It was aimed at providing world-class infrastructure, including facilities for spinning, sizing, texturing, weaving, processing, apparels and embellishments. As part of the scheme a number of apparel parks are being set up, and will generate an annual production of Rs 24,000 crore, and will create half a million new jobs.
Apparel Training and Design Centres (ATDC): These centres, run by the Apparel Export Promotion Council, have till date trained over 21,000 workers. Thirteen centres are already in operation and 25 new centres are being planned during the XIth Five Year Plan, to train 57,625 additional manpower.
Besides the Government, the corporate sector has also rushed to fill the skills gap in the sector. Thus Infrastructure Leasing and Finance
Services (IL&FS) has launched a project called Skills for Employment in Apparel Manufacturing (SEAM), a pilot effort to train and place rural below-poverty-line youth in the apparel industry. The project entails identifying youth in the working age, providing them core and soft skills, and placing them in formal employment with assured wages.
|