Industry And Cluster | News & Insights

Systematic solution is the necessity of the hour for the contemporary Indian textile industry.

Published: May 9, 2020

With automation now creeping in processes like zari and embroidery also, there’s a requirement to calibrate the skill requirements in alignment with such developments. This value creation from workers can potentially catalyse the continued efforts to supply a universal social safety net, a safe working environment, and decent income levels.

By Pradeep Mehta and Sarthak Shukla

With factories shut, shipments stranded and payments delayed, thanks to Covid–19, the textile and clothing sector goes through dark times indeed. Is there a way out?

According to estimates by Clothing and makers Association of India (CMAI), the textile sector is watching a possible job loss of 1 crore. However, this is often not the primary time that this sector has been browsing rough patches. In August 2019, the North India Textiles Mills Association issued a billboard. highlighting that the textile spinning industry goes through the worst financial phases of the last decade, with exports of cotton yarn plummeting to 50% within the month of April 2019 as compared to the last year. Prior to this the sector was reeling under the blows of demonetization, haphazard introduction of GST regime and the 2008 financial crises

What are the opposite reasons for the challenges to the sector? First and foremost, the arrival of technology has rendered artisans and their skills outdated. Once famed across the world as ‘artisans’ who were weaving delicate and dexterous yarn, ‘workers’ have now become one among the most important concerns of Indian textile manufacturing enterprises.

Secondly, the globalized world has necessitated cost-competitiveness in the textile and clothing manufacturing processes. ‘Economies of scale’ has become the magic formula for nations like China, Bangladesh and Vietnam. According to Indian Ministry of Textiles’ Annual Report of 2018-19 this has resulted during a setback for the largely fragmented textile and clothing value chain in India which produces 70% of its output from small and medium scale industries. Lastly, handloom and handicraft artisans face a perpetual lack of market linkage and branding. In such a situation, the artisans aren’t getting reasonable returns on their efforts. Before suggesting a number of the solutions, it’s crucial to assess the present policy discourse adopted by the govt of India to facilitate the world. The Ministry of Textiles enlists a plethora of schemes in situ for various segments of the textile sector. Technology Upgradation Fund Scheme (TUFS) or the Powered scheme for power looms or the Scheme for Integrated Textile Park (SITP), the government’s efforts are inclined towards using finance to get attributes of productivity, efficiency, exportability, scalability and marketability of the textile products in India.

However, what seems to be missing is an outward looking approach to deal with the external factors affecting the world.

The first factor is that the staple for textile manufacturing processes. While the worldwide demand of clothing is inclined towards man-made fiber over cotton, India’s production still remains cotton-dominated. In man-made fiber segment, particularly polyester related raw materials, including PTA and PSF, the initial production costs of these materials are significantly higher as compared to other countries like China. Until recently, India used antidumping duty to guard the only a few such domestic manufacturing oligopolies. This has fortunately been stopped. In any case, there’s an urgent got to infuse efficiency into the domestic manufacturing of all raw materials, whether synthetic or cotton

The second factor is of monetary costs, which have an immediate impact on the viability of the textile enterprises. For both handlooms and power looms, credit support to start out business and dealing capital support to run their businesses is extremely critical. Also, the MSME clusters as an entity needs banking assistance to leverage their manpower skills and compete with the huge corporates operating at economies of scale.

The third factor is infrastructure, especially power and logistics. Being an influence intensive industry, textile mills incur a big proportion of their costs as electricity bills. A sustainable solution during this regard is to structurally reform the facility sector, reducing losses, rationalizing tariffs and spending on the efficiency gains to end-consumers. In case of logistics, regulatory and infrastructural bottlenecks within the freight transportation sector remains a problem affecting all manufacturing sectors including textile and clothing

The fourth factor is market linkage. For handlooms and handicrafts, there’s an incredible scope for using e-commerce and fintech solutions to unravel the matter of lack of market. This has got to go hand handy with effective advertising and branding support from the govt and other agencies including National Institute of Fashion Technology and various textile promotion councils.

Lastly, there’s a requirement to bring back the worth for the worker within the modern textile industry because it was within the traditional era. Effective skill development and capacity building is indispensable for achieving this. Revamping the prevailing research-cum-training agencies to develop specialized state capacity for skill training is that the initiative during this regard. In addition, thereto, on the work skill training is significant to adapt to the changing nature of labor on the factory floor. With automation now creeping in processes like zari and embroidery also, there’s a requirement to calibrate the skill requirements in alignment with such developments. This value creation for workers can potentially catalyze the continued efforts to supply a universal social safety net, safe working environment and decent income levels.

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