On the back of growing domestic demand and incentive measures announced by the government of India, Indian textile and apparel industry is optimist that it would blossom into a force to reckon with in the coming years.
Under the Technology Up gradation Fund Scheme, government has offered aid to the Indian textile and apparel industry which will help the industry enhance its technology and compete in the global market space.
For the uninitiated, next to China, India is the second largest textile economy in the world. And global meltdown has had an adverse impact on its growth.
In the recent past, India’s $5 billion dollar UPHOLSTERY FABRICS textile exports dwindled, by almost 33 percent. As a result, exporters have been requesting billion dollar aid for exploring newer markets and were anxiously looking forward to significant tax benefits from the government. The reason being, the markets in U.S. and European Union countries which constituted India’s chief export destination had crumbled. So the government’s aid in form of 510 million dollars would reportedly act as a breadth of fresh air, and it would help the domestic textile firms upgrade their manufacturing units.
The aid provided under the Textile Technology Up gradation Scheme will reportedly give fresh impetus to this sector. The technology Upgradation Fund Scheme is said to be the most popular scheme in independent India, which has attracted investment to the tune of 166,000 crores in the textile sector, informed Dayanidhi Maran, Union Minister for Textiles recently. This is for the first time; such large amount of money is being released under the scheme. Nearly, 12,514 exporters are expected to benefit from this scheme.
Certainly, in the future foreign buyers would prefer Indian markets as opposed to the Chinese, if we keep working on the quality and the quantity aspect of our textile products, informed an industry consultant.
Government’s major focus area would be to achieve industry growth rate of 8-10 percent from the existing level of 6 percent. To attain this target, the textile ministry is planning to attract investments worth 31 billion dollars in the next five years. Furthermore, Indian exporters are looking forward to explore newer markets like Japan, New Zealand, Latin America and South America.
Textile industry in India contributes around 8 percent to GDP, accounts for 14 per cent of the value addition in the manufacturing sector and over 30 percent of the export earnings of the country. Interestingly, it is considered to be the largest employer with an estimated workforce of 35 million. No doubt, dwindling global demand has resulted in lay offs, however government has promised to introduce 10 million jobs in the next five years. The government of India is also planning to constitute a 41-member working group to introduce national fibre policy, with an objective to make India self-sufficient in fiber consumption and export requirements.