India can be the world leader in Textiles. Here’s how

India's textile industry, the second-largest employer in the country, is poised for significant growth. With the government’s support through schemes like PM MITRA, PLI, and RoSCTL, the sector has the potential to become a USD 250 billion market by 2030. India can emerge as a global textile powerhouse, especially as countries like China, Bangladesh, and Vietnam face internal and external challenges, providing an opportunity for India to capitalize on this shift.

Opportunities for Growth in the Textile Sector

• Global Demand and Domestic Potential: The textile sector's growth prospects are bolstered by a growing middle class and increased consumption from Gen Z. The rise of e-commerce and quick commerce further amplifies the demand for apparel, providing a significant domestic market for textiles. Despite challenges like the pandemic, India's consumption patterns remain strong.
• Government Support and Strategic Initiatives: India has undertaken substantial initiatives, such as the Pradhan Mantri Mega Integrated Textile Region and Apparel (PM MITRA) Parks, the Production Linked Incentive (PLI) Scheme, and the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme to incentivize and boost the textile sector. These schemes aim to enhance competitiveness and increase the sector’s contribution to the economy.
• Leveraging Shifts in Global Textile Markets: The global textile market is shifting as geopolitical and economic changes impact China, Bangladesh, and Vietnam. India’s stable economy, skilled workforce, and centuries-old textile tradition position it well to capture this market share, especially with favorable government policies and strategic international relationships.

Challenges and Solutions for India’s Textile Industry

• Labour Shortages and Cost Disadvantages: Despite the growth potential, India faces a 15-20% cost disadvantage in textile manufacturing, primarily due to lower labor efficiency. Additionally, there are labor shortages, with key hubs like Tiruppur struggling to maintain a stable workforce, as workers often migrate or leave for better pay.
• Building Infrastructure and Reducing Attrition: To address labor shortages and reduce high attrition rates (10%), India must create jobs in regions where labor is abundant, like Uttar Pradesh, Bihar, and Madhya Pradesh. Implementing policies for industrial housing near factories can improve retention, reduce absenteeism, and improve worker productivity by lowering transportation costs and increasing take-home salaries.
• Empowering Women through Stable Jobs: Women represent 90% of the blue-collar workforce in the textile industry. Ensuring stable, safe, and well-compensated jobs in the sector can empower women, integrate them into the formal economy, and lead to overall economic growth. Government support for infrastructure and policy reforms can make this possible, ensuring that the industry thrives sustainably 

Automation and Technology Integration

• Balancing Automation and Job Creation: While automation can improve efficiency, it need not result in job losses. Technology can coexist with human talent, enhancing productivity and fostering sector growth. As efficiency improves, the industry can expand, leading to the creation of more jobs rather than reducing the workforce.
• Opportunity to Compete Globally: India has a demographic advantage and economic potential to become a leading textile exporter. By addressing labor issues, investing in infrastructure, and leveraging technology, India can become a global giant in the textile industry, replacing China, Bangladesh, and Vietnam as the world’s largest textile exporter.
• Government and Industry Collaboration: The government must continue to support the textile sector through infrastructure development, including industrial housing and enhanced labor policies. Collaboration between the public and private sectors is crucial to capitalizing on this opportunity and ensuring that India remains competitive in the global textile market.

Practice Question:

Q. In the context of India’s textile sector, discuss the opportunities and challenges the industry faces in becoming a global leader by 2030. What role should the government play in addressing labor issues and promoting sustainable growth?