Jul 5, 2016
Lack of FTAs costs India 55 lakh textile sector jobs
Jul 5, 2016
The absence of Free Trade Agreements (FTAs) with the EU, Australia and Canada costs India almost 55 lakh jobs in the textiles and garment sector. Additional exports would have generated these jobs if FTAs had been in place..
This is a major finding of study by Ernst & Young. The study was commissioned by the Cotton Textiles Export Promotion Council (Texprocil), which released the report titled “Textile Industry As a Vehicle of Job Creation for Inclusive Growth” in Mumbai on Monday.
The report also highlighted the size and employment generating capacity of the textile industry. According to the report, the most significant impact of the industry was that it employed many women including married women in rural areas.
It mentioned the movement into non-migratory models like the hub-and-spoke method successfully employed in Bangladesh Cambodia etc.
It underlined similarities in process in the home textile sector and the garmenting sector and pointed out that home textiles is also labour intensive and helps in the social uplift, thereby impacting poorer segments and other lower strata of society.
Texprocil Chairman R. K. Dalmia who released the report, said there were 3 objectives in undertaking the study. First, to map the top 20 textile products in demand in major importing countries in comparison to what India is supplying to these markets and thereby analyze reasons for mismatch in demand and supply, if any, and chalk out suitable corrective action to be taken up by the industry.
He also reiterated the importance of finalisation of FTAs with EU, Australia and Canada in addition to negotiation of concessional tariff with China to highlight the impact of business being lost to other competing countries owing to tariff disadvantage faced by the Indian suppliers.
Thirdly, he said that this study was done to clearly bring out the employment potential of the textile sector, especially in rural India by developing non-migratory models of manufacturing like the ‘hub –and-spoke’ model being popularised in countries like Bangladesh, Cambodia and Myanmar.
“This study was done by conducting primary research in various production centres and also by one-to-one meetings with manufacturers and exporters of fabric and home textiles in small, medium and large scale sectors,” he said.
Dalmia stressed that the apparel special package announced last month should be extended to home textiles sector immediately so that the two packages are implemented simultaneously. This will not only lead to substantial increase in employment in rural India but also augment export of home textile products.
He requested the government to support the textile sector as a whole and in particular, value added product such as home textiles to achieve growth in exports as well as create more direct jobs in the sector.
M Ramaswamy, immediate past Chairman of the Council,said the textile industry was the most labour intensive in the manufacturing sector and despite the industry meeting all the objectives of the visionary programmes of the government, it was unable to occupy the mind space of the policy makers.
“It was with this background that Texprocil assigned the study to an international accredited research company so that the results would show that the textile industry with its low cost of operation could create a huge social impact,” he said.
Textiles Commissioner Kavita Gupta, in her speech said that all schemes and policies are drafted keeping the interests of the industry in mind. She also said that the Prime Minister wants to give priority to the textile sector and hence the special package was extended to the apparel industry.
Textiles Secretary Rashmi Verma who was the Chief Guest at the function said the study report was released at a very appropriate time considering that all schemes and proposals which are placed before the Ministry and Cabinet have emphasis on job creation.
She also detailed the specifics of the package given to the apparel sector saying that the garmenting industry worked on very low margins and hence needed a buffer while competing with countries like China, Bangladesh, Vietnam and Cambodia who enjoyed a zero duty advantage in most of the markets that India exports to.
On FTAs, she said that the government has already started the process of reviewing the existing FTAs and is also seriously negotiating the FTAs with EU, Australia and Canada.
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