Interviews
Textiles, clothing industry in woods; seeks labour reforms
01 Jun '09
5 min read
"With adherence to delivery schedules being the key to success in overseas markets, sometimes garment exporters have to work overtime at short notice. Irritants like these need to be removed for smoother export operations," he said.
Says Chairman of Delhi Productivity Council Sudarshan Sareen with India's productivity rates being among the lowest in the region, there is need for productivity-linked wages by delinking of wages from the consumer price index.
Mr Sareen said as the increase in dearness allowance is linked to inflation and unrelated to productivity, the wage cost per unit of production keeps escalating. This adversely affects the garment sector where price-sensitive demand patterns restrict the scope for cost-plus pricing.
Mr Anand said the garment export industry needs to be allowed to engage contract labour so that extra orders can be met at short notice.
He said The Factories Act ought to be modified to allow 12 hours of working on any day to give benefits to the workers as well as to meet export production targets in time.
Mr Sareen said amendments are required to help free outsourcing to promote investment in labour-intensive and export-oriented sectors, like garments. Contract labour norms should be liberalised for the textiles and clothing segments. Says FIEO President A Saktihival global recession has made buyers cost sensitive and, therefore, price competitiveness has become a vexed issue for Indian exporters.
The hue and cry by the industry has its genesis in the fact that Bangladesh has overtaken India in apparel exports with the its government playing a catalytic role. Labour laws in India's neighbouring country are more flexible and conducive to operating large labour intensive factories.
The Bangladesh government also provides fiscal benefits, including exemption of export profit from the levy of Income Tax. Mr Anand said garment manufacturers in Bangladesh get fabric and other raw materials at international prices as if they were buying these inputs from local suppliers.
Garment exports from India totalled 10.13 billion dollars in 2008-09 compared to 9.68 billion dollars in the previous year. Notwithstanding the present woes, the Indian apparel industry, one of the most dynamic sectors of the economy, has made significant progress over the years. This is not only in terms of its contribution to production, exports and generation of employment, but also in achieving a high degree of sophistication, skill development, quality upgradation, cost reduction and standardisation.
According to the recommendations of the Working Group on HRD Initiative for the textile and apparel industry, the textile industry would continue to be the largest employment provider in the country after agriculture. In addition to 35 million direct employment, the textile industry also provides about 55 million indirect employment. Thus, the total employment generated is about 90 million, which is expected to go up to 105 million during the Eleventh Plan period.
The long and short of the story is that the textile and clothing industry is convinced that larger capital investments and employment in the next phase of development will entail greater flexibility in labour laws and fiscal sops.
Says Chairman of Delhi Productivity Council Sudarshan Sareen with India's productivity rates being among the lowest in the region, there is need for productivity-linked wages by delinking of wages from the consumer price index.
Mr Sareen said as the increase in dearness allowance is linked to inflation and unrelated to productivity, the wage cost per unit of production keeps escalating. This adversely affects the garment sector where price-sensitive demand patterns restrict the scope for cost-plus pricing.
Mr Anand said the garment export industry needs to be allowed to engage contract labour so that extra orders can be met at short notice.
He said The Factories Act ought to be modified to allow 12 hours of working on any day to give benefits to the workers as well as to meet export production targets in time.
Mr Sareen said amendments are required to help free outsourcing to promote investment in labour-intensive and export-oriented sectors, like garments. Contract labour norms should be liberalised for the textiles and clothing segments. Says FIEO President A Saktihival global recession has made buyers cost sensitive and, therefore, price competitiveness has become a vexed issue for Indian exporters.
The hue and cry by the industry has its genesis in the fact that Bangladesh has overtaken India in apparel exports with the its government playing a catalytic role. Labour laws in India's neighbouring country are more flexible and conducive to operating large labour intensive factories.
The Bangladesh government also provides fiscal benefits, including exemption of export profit from the levy of Income Tax. Mr Anand said garment manufacturers in Bangladesh get fabric and other raw materials at international prices as if they were buying these inputs from local suppliers.
Garment exports from India totalled 10.13 billion dollars in 2008-09 compared to 9.68 billion dollars in the previous year. Notwithstanding the present woes, the Indian apparel industry, one of the most dynamic sectors of the economy, has made significant progress over the years. This is not only in terms of its contribution to production, exports and generation of employment, but also in achieving a high degree of sophistication, skill development, quality upgradation, cost reduction and standardisation.
According to the recommendations of the Working Group on HRD Initiative for the textile and apparel industry, the textile industry would continue to be the largest employment provider in the country after agriculture. In addition to 35 million direct employment, the textile industry also provides about 55 million indirect employment. Thus, the total employment generated is about 90 million, which is expected to go up to 105 million during the Eleventh Plan period.
The long and short of the story is that the textile and clothing industry is convinced that larger capital investments and employment in the next phase of development will entail greater flexibility in labour laws and fiscal sops.
Garments Exporters Association
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