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Reform labour laws to boost Indian textile sector – FICCI

January 02, 2014 (India)

FICCI has recommended the reform of the labour laws to boost textile & clothing industry and raise India's share in world exports. These recommendations have been submitted to Ajay Shankar, member secretary, National Manufacturing Competitiveness Council and chairman of expert Group on National Textiles Policy constituted by Government of India.

Assuming India's GDP grows by 7% on an average over the policy period as per the scaled down estimates of Planning Commission and assuming that the domestic textiles industry also grows by 7%, it would mean that the textiles industry would be a USD 278 billion industry, of which exports would account for USD 145 billion, noted FICCI.

To meet this target, Indian exports require to grow at a Compound Annual Growth Rate (CAGR) of 15.1% over the 10 year period (assuming world exports in textiles and clothing grow by 5%). Indian exports would reach USD 145 billion by end of the policy period if we grow by 15%.

As per the 12th Plan working group on textiles and apparel, the textiles sector will create an additional employment of 15 million by 2016-17, which means the sector can provide 30 million additional jobs by 2023. Given that textiles & clothing sector is a labour intensive sector, FICCI projects that it can provide employment to at least an additional 20 million people from the current 45 million to 65 million by 2023.

Textiles is a labour intensive sector. To make the sector achieve a high growth path, there is a need for enabling labour laws to achieve the desired targets. Currently, the sector has to comply with a number of archaic labour laws which are not so relevant in today's dynamic scenario. There is a need to relax certain provisions of the laws.

The apparel and clothing industry which employs large number of people is considered the driver of growth for the whole value chain hence reforms are a must for garment manufacturing industry. Garment manufacturing is seasonal in nature and works on orders which are season specific, delivery schedules are hectic and have short lead time. Therefore, the industry requires large workforce in busy season and smaller workforce for other months.

On the labour front, FICCI also added that one of the major concerns of manufacturers and also as identified by HLCM (High Level Committee on Manufacturing) chaired by the Hon'ble Prime Minister, is irregular and inadequate supply of skilled and unskilled labour owing to harvest and other seasons since the sector employs mainly migratory workforce.

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Federation of Indian Chambers of Commerce and Industry
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