Textile and clothing industry, which is a powerful tool for bringing about inclusive growth by providing gainful employment and steady income to the millions, is engulfed by an unprecedented threat triggered by a rising rupee, which eroded its competitive advantage in the export market.
Threatened by the gloomy prospects and receding bottom lines, textile and clothing units across the country have cut back the production and some are even contemplating exit, which has already adversely affected not only the incremental growth in employment in the sector but also the existing jobs.
This sad state-of-affairs of the industry and its bleak prospects, have brought together all textile and clothing business associations in the country in one platform to voice their grievances for a speedy resolution of the impasse that they are faced with.
The associations that are jointly taking up the issues of the industry are CITI, AEPC, Texprocil, MOA(Mill Owners' Association), NITMA, PDEXCIL, RTMA(Rajasthan Textile Mills' Association), SIMA, SRTEPC, etc.
Dwelling on the gravity of the crisis, the industry says that in the month of April 2007, export of textile products declined by 18.25 per cent as compared to April 2006. In the previous years, exports from the industry were growing between 15 and 20 per cent.
With the exports from the sector caught up in a negative growth trajectory, the incremental employment generation has dropped in the last year. For the month of April 2007 alone, the jobs lost on account of drop in exports is estimated at 35,000.
In the subsequent months, this figure would have increased considerably since the pace of appreciation of rupee was sharper. Industry estimates say that total loss of jobs during the year will be close to 5 lakhs.
Significantly, more than 80 per cent of India's textile exports are dollar denominated. Exporters, historically, are booking their exports in dollar terms even in hard currency areas other than USA.
As per the latest information compiled, rupee has appreciated by about 15 per cent vis-a –vis dollar since last year. As things stand now, the apprehension is that the rupee may climb up a few more notches.
That will exacerbate the strains of the exporters, compelling many of them to pull the shutters, leading to millions of job losses.
Steep appreciation of rupee has come at a time when the interest rates are moving up and the transaction cost of the industry is very high.
This has adversely affected the tempo of growth of the industry in general and exports in particular due to the inherent handicaps of the Indian industry vis-vis its competitors in Asia, such as low productivity, erratic power supply, infrastructure bottlenecks etc.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
