'Job losses will hit historic highs' – Mr Tibrewal, Gangotri Textiles

28 Feb '09

3 min read

Job losses in the textile and clothing industry are mounting with each passing week and month. The turmoil in international markets is affecting the sector like never before and also can be said safely, that the Indian textile and garment sector has been impacted to a larger extent then it has influenced other competitor countries like China, Bangladesh and Vietnam.

According to estimates there have already been lay-offs to the tune of 500,000 from within the sector, and there are expectations of five times that number in the next two months. All hopes of the sector were pinned on the union budget and the industry was waiting with bated breath for incentives to be announced, but it was not to be so.

To have a better understanding of the turmoil in the biggest employment generating sector after agriculture, fibre2fashion spoke to Mr Manoj Kumar Tibrewal, M.D of the vertically integrated textile company, Gangotri Textiles Ltd. Gangotri Textiles has world class in- house facilities from processing yarn to manufacture of finished garments and employs around 1,800 people.

We started off by asking him his view on the job losses in the industry, to which Mr Tibrewal said, “Job losses are in lakhs in the textile and clothing sector due to decline in production. This has been attributed to the slowdown in domestic demand and a decline in exports. If this condition prevails the situation will further worsen and the job losses will hit a historic high”.

He continued in the same vein by adding, “The companies, which are purely export oriented, will suffer definitely. The companies, which are equally balanced between domestic market and exports, will manage to survive due to the demands from the domestic sectors. However it is going to be a tough & challenging time in the near future”.

Next, we asked him his opinion and advice on controlling the situation, to which he replied by saying, “First, by focusing on offering value products as there has been a major shift from the premium segment of lifestyle brands to value brands. Introduction of more innovative and fashionable products at an affordable price will help the brand to sustain in the market”.

“Second, he said, “By enhancing the rates of Duty Draw back / DEPB (Duty Entitlement Pass Book) in textile products will help to increase the textile exports. Third, withdrawing 5 percent incentive on export of cotton will help the textile industry to progress. Instead of encouraging cotton export, Government should encourage value added products like yarn, garment etc”.

“Fourth and the most important, he commented, “Government should also liberalize the labour laws so that entrepreneurs are encouraged to come up with more garment factories, which are labour intensive. The garment factories should be turned in to engines for growth to compete with countries like China, Bangladesh, Vietnam & Cambodia”.

He also urged the Government to address the power shortage in Tamil Nadu. He suggested that if it is unable to immediately address this grievance, it should take steps to trim down the power cost by reducing excise duties and sales tax on furnace oil & diesel. “All these, if adopted will go a long way in solving this tsunami like crisis”, he optimistically ended by saying.

Fibre2fashion News Desk - India

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