India has set an ambitious goal of reaching $100 billion in textile and apparel exports by 2030. While this target offers immense potential for creating jobs, particularly in rural areas and for women, several factors pose significant challenges.
Despite India’s potential, its apparel exports have remained stagnant at around $16-19 billion between 2015 and 2022. This is in stark contrast to neighbouring countries like Vietnam and Bangladesh, which have seen substantial growth during the same period.
The government has recognized the need for reforms and introduced the Employment Linked Incentive scheme to incentivize both employers and employees in the sector. However, to truly compete with Bangladesh and Vietnam, India must address underlying cost disadvantages.
One major challenge is the high import duty on fabrics, which increases raw material costs for Indian garment manufacturers. Additionally, cumbersome trade procedures and quality control regulations further hinder competitiveness.
India’s minimum wage is also higher than in its competitors, leading to increased labour costs. While the Employment Linked Incentive scheme aims to address this, it is a temporary solution and does not tackle the root causes of the problem.
To achieve its $100 billion export target, India must focus on long-term reforms, including reducing import duties on fabrics, streamlining trade procedures, and improving labour market efficiency. By addressing these challenges, India can unlock its full potential in the textile and apparel industry and create sustainable jobs for millions of people.
