Make in India and the Indian Textile Sector: Case for Inclusion

Make in India and the Indian Textile Sector: Case for Inclusion

Question: Make in India needs to expand its coverage. Highlight the problems being faced by the Indian textile sector and make a case for its inclusion in Make in India in this context

- Crisis ridden textile sector has become labour intensive making it ideal for Make in India

- But with losses mounting, the situation remains dismal

- Close to nearly half of Indian power looms have come to a halt

- Textile industry is reeling under high input and transaction costs

- Products find it hard to compete in export markets

- Indian made yarn, fabrics and garments attract duties at 3.5, 8.5 and 14 percent respectively

- In contrast, Pakistan, Cambodia and Vietnam enjoy zero duty access in several categories in US, EU and China

- Indian cotton has become non-competitive because Cotton Corporation of India sold high quality cotton at prices higher than the global level

- Adjusting the cotton market through MSP is not advisable

- Instead, experts are debating whether direct cash subsidy to farmers would reform the sector

- TUFS launched in 1999 has the ability to solve problems of the textile sector

- Scheme is estimated to have generated INR 3,00,000 crore in the textile value chain

- TUFS will however, expire in March 2017

- There is critical need for National Textile policy which concentrated on level playing field with respect to tariff rates, raw material costs, funding and transaction costs apart from including this industry in Make in India initiative

Facts and Stats

- Power loom provides work to 2.5 workers per loom

- Healthy textile sector could be used for job creation

- Spinning industry in northern and southern regions have led to shutdown of as high as 15 to 20 percent of production capacity