In order to revive the country’s textile and apparel industry, the Federation of Indian Chambers of Commerce and Industry has urged the government to maximize fiscal policy support and plans to guarantee interest subsidies so that the industry can finally get out of the current depression.
Due to long-term production cuts and market depression, the textile and apparel industry is facing tremendous pressure. Therefore, the Federation of Indian Chambers of Commerce and Industry believes that the government needs to further expand and maximize its fiscal stimulus plan in the textile and apparel industry, especially for emerging investments. Even if the economic downturn lasts longer, investors are still keen to diversify operations in the textile and apparel industry in the hope of finding markets in the future.
Although India’s textile export target in the 11th Five-Year Plan is to grow by 22%. But the growth rate has dropped from 16.6% in 2005/06 to less than 12% currently. Textile and clothing orders have dropped significantly, especially from the United States, the European Union, and ASEAN countries.
As the second largest employment industry in India, the number of employees in the textile and garment industry currently accounts for 21% of India’s total employment. The industry is expected to provide an additional 17.37 million direct or indirect jobs in the 11th Five-Year Plan. On the contrary, the industry has lagged behind. The severe pressure under the economic crisis caused nearly 1.5 million people to lose their jobs in 2008, and millions of people will join the ranks of the unemployed.
The Federation of Indian Chambers of Commerce and Industry requires the government to draft a five-year target agenda, join forces with industries and trade unions, strengthen labor laws, and achieve complete industrial and labor development in phases. Given the shortage of skilled workers in the industry, the government should set up vocational training institutions in rural and peri-urban areas and provide training in applied knowledge such as textile pattern design, short-term weaving and spinning courses.
In addition, the textile industry interest subsidy scheme should continue in March 2010. Under the plan, exporters will be compensated for lost profits.
