Indian textile industry could generate 50 million jobs by 2025, a large majority of them for women, if it achieves the breakout growth as per its potential, says a recent report. It also added that the potential economic benefits from the industry are identified as revenue of $300 billion by 2025, a multiple of three from the current position.

The joint report ‘Weaving the Way: Breakout Growth Agenda for the Indian Apparel, Made-ups and Textile Industry’ by the Confederation of Indian Industry (CII) and Boston Consulting Group (BCG) outlines challenges and develops solutions in the Indian apparel, made-ups and textile industry.

The report said the domestic market could account for a 2.5 times jump to $150 billion and even the foreign exchange earnings could go up to a similar size by the year 2025.

Challenges to meet this potential include small scale, fragmented clusters, restrictive labour laws and unpredictable wage movements, high operating costs due to taxation and subsidy structures, market access barriers in key markets such as the EU and the US, poor infrastructure, logistics delays, and lack of product development and process improvement.

The report also calls for a Free Trade Agreement (FTA) with the EU. An added provision could be to treat the poor states of India on a similar basis as least developed countries. 

Job-linked scale through a ‘Make in India’ scheme could provide a slab-based incentive linked to the number of additional jobs created, to be availed of by entrepreneurs or industrial parks, it says.

The report suggested that state governments should promote infrastructure with plug and play facilities. Also, different operating models can be built, such as the hub and spoke model, or notified apparel parks.

The report also highlighted the China model of VAT rebates, and the exempt-credit-offset method of carrying forward unadjusted rebates to encourage hybrid domestic-export models. Logistics support is a key recommendation, especially integration with Bangladesh through single-day transit.

Shipping turnaround times must be improved and adequate hinterland connectivity built with key textile parks.