India’s textile industry aims to reach $350 billion by 2025: Optimism V Challenges: a short review.

Emerging as a global textile hub with huge potential, India needs to develop man-made fibre to remain competitive in the global market. The country aims to be a $350 billion textile industry by 2025 The country also aims to increase its textile exports to around $100 billion from the current $40 billion. It will focus on quality and other aspects to improve its competitiveness in the global market.

The Indian textile industry has strength across the entire value chain from natural to man-made fiber to apparel to home furnishings. Its share in the nation’s GDP is 6% and in exports is 13%. The sector is the second largest employer after agriculture.

In the Indian textile and apparel sector, the sub sectors of weaving, processing and garmenting are fragmented and lacking in the requisite scale for success in global markets. Most of the manufacturing units have small capacities and low manufacturing efficiencies which are a disadvantage in the global arena. To bring them at par with global counterparts there is a need to facilitate rapid growth and modernization of existing firms with potential for success. In addition, it would be necessary to attract large scale investment for manufacturing world class facilities. The advent of large manufacturing plantswith economies of scale will help India in achieving global competitiveness. Large scale capacity additions will enable India to achieve the vision of higher share of global trade and create 35 million jobs to help India eliminate poverty. Man-made fiber production would need to grow very rapidly to reach manifold levels to make possible the achievement of the Vision.

The sector needs to be made attractive enough for investors. It needs to get US$ 180 billion toUS$200 billion investment for achieving the production capacity of about US$ 650 billion by 2024- 25. This is a formidable challenge. The key to getting investments on this scale is for returns on investments to appear attractive enough. Investments need to be adequately incentivised. The most important requirement is the maintenance of a competitive exchange rate. The essential prerequisites for getting investments on the scale required would be ready availability of developed land with adequate infrastructure, skilled manpower and easy connectivity to ports. Creating new mega textile parks would be the way forward. Lowering the cost of production as well as the cost of logistics would be of paramount importance and should be given highest priority.

For achieving the production capacities envisaged, additional skilled manpower of 35 million would be needed. This is going to be difficult. Productive and skilled manpower is the only way to achieve global competitiveness and to derive the full benefit of the demographic and wage advantage that India would clearly have over the next decade.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here