Roadmap for Answer Writing

1. Introduction

• • Briefly introduce India’s textile sector, its contribution to the economy, and the challenges it faces.
  • State the focus of the answer: discussing the reasons for underperformance and possible measures to enhance competitiveness.

2. Factors Contributing to India’s Underperformance

• • Lack of Large-Scale Industries
    • Mention how small-scale, informal units dominate the sector, limiting the growth of large-scale industries.
    • Fact: “Complex labor laws on hiring and firing, weak export contract laws, etc., discourage large-scale investments” .
  • High Production Costs
    • Discuss how the absence of technological advancements in small units increases production costs and reduces quality.
    • Fact: “Small, informal weaving and processing units face challenges due to lack of technological advancement, resulting in inferior quality products” .
  • Trade Barriers
    • Explain the absence of free trade agreements (FTAs) with major importing markets, raising costs for Indian textile exports.
    • Fact: “Bangladesh enjoys duty-free access to the EU, which gives it a competitive advantage over India” .
  • Declining Cotton Production
    • Highlight how India’s cotton production has decreased, negatively impacting textile and garment production.
    • Fact: “India’s 2023-24 cotton production dipped to a 15-year low, affecting the textile sector” .
  • Low Labour Productivity
    • Explain the impact of low productivity due to the lack of skilled labor and outdated technologies.
    • Fact: “Labour productivity in India is almost half of what it is in China” .

3. Measures to Enhance Competitiveness

• • Promotion of Synthetic Apparel
    • Suggest diversifying into synthetic fabrics to ensure year-round production.
    • Fact: “Diversification into synthetics would allow Indian manufacturers to run factories year-round” .
  • Strengthening Weaving and Processing Sectors
    • Recommend establishing large-scale, modern weaving and processing units for standardization and efficiency.
    • Fact: “Setting up large-scale weaving and processing units can increase production and improve quality” .
  • Industry-Friendly Labour Laws
    • Advocate for flexible labor laws to encourage investment and improve productivity.
    • Fact: “Industry-friendly labor laws are needed to attract large-scale investments, similar to practices in the services sector” .
  • Negotiating Trade Agreements
    • Suggest prioritizing the negotiation of FTAs with major markets like the EU, UK, and Canada.
    • Fact: “India should ramp up efforts for FTAs with key textile-importing markets to reduce trade barriers” .

4. Government Initiatives

• • Mention the government’s efforts to support the textile sector through schemes such as PM MITRA Parks, Production-Linked Incentive (PLI), and the National Technical Textiles Mission.
  • Fact: “Government initiatives like PM MITRA Parks and PLI aim to increase textile exports and create new jobs” .

5. Conclusion

• • Summarize the key points.
  • Emphasize the need for a holistic approach combining industry reforms, technological advancements, and trade agreements to enhance India’s textile sector competitiveness.

Relevant Facts for the Answer

1. Global Trade and Research Initiative (2023):
   • India’s garment exports in 2023 stood at $14.5 billion, behind China ($114 billion), Vietnam ($81.6 billion), and Bangladesh ($43.8 billion).
   • India’s textile sector faces high production costs due to small-scale, informal units.
   • India’s cotton production dipped to a 15-year low in 2023-24, impacting the textile industry.
   • Labour productivity in India is half that of China, which affects the sector’s competitiveness.
2. Government Policies:
   • The PM MITRA Parks scheme aims to create world-class textile infrastructure.
   • The Production-Linked Incentive (PLI) scheme incentivizes production and export growth in textiles.
   • The National Technical Textiles Mission focuses on advancing technical textiles in India.