The Rupp Report: India On The Rise

Jürg Rupp, Executive Editor

For some time, India has been one of the strongest textile nations on the globe, heavily competing with China for first place. This fact is confirmed by a recently published report of the Working Group on Textile and Jute Industry.

Employment Expected To Increase
The report of the Working Group on Textile and Jute Industry for the 11th Five-Year Plan for 2007-12 says the estimated employment in the Indian textile industry is expected to increase from 33.17 million persons as of March 31, 2006, to 45.19 million persons by 2012, the final year of the 11th Five-Year Plan. Employment in allied industries is expected to increase from 54.85 million persons to 60.20 million persons. Consequently, total employment in the textile sector including allied industries is projected to increase to 105.39 million persons by 2011-12 from the present level of 88.02 million persons, resulting in a net addition of 17.37 million persons.

Production Growth
The vision projected by the textile industry indicates fabric production will grow at 12 percent and the total turnover at 16 percent per annum during the 11th Five-Year Plan, to reach a level of US$115 billion by the ending year of the 11th Five-Year Plan.

In order to achieve the projected level of growth, the report mentions it is necessary to address the various handicaps of the manufacturing sector, such as deficiencies in transport infrastructure, inadequate power supply and inflexible labor laws.

In addition to formulate concerted efforts to address such handicaps, the Government is implementing specific schemes such as the Technology Upgradation Fund Scheme (TUFS), and the Scheme for Integrated Textile Parks (SITP), with a view to modernizing the textile industry and enabling it to benefit from economies of scale and integrated production.

Strong Rupee
Some time ago, the Rupp Report reported problems of the Indian textile industry with the strong rupee, trying to invoice in euros because of the weak US dollar. Now also the Indian Government is backing the actual problems of the Indian textile industry: Addressing the Golden Jubilee Celebrations of the Confederation of Indian Textile Industry (CITI), Prime Minister Manmohan Singh assured the audience that he is aware of the problems of the textile industry and that he will look into its demands and problems, including the problems faced due to rupee appreciation, so that the crucial industry’s competitiveness could be maintained and even more employment generated.

Hoping the textile sector would be able to cope with the rupee appreciation issue with its enterprise and business skills, the Prime Minister said that also for this problem, the Government has taken steps to help mitigate the laws of competitive advantage while ensuring that the external economic management is stable and sustainable.

Three Basic Needs
Singh said that in making the Indian textile industry globally competitive, especially after the Multi-Fiber Agreement (MFA) regime, the United Progressive Alliance (UPA) Government has focused on three imperatives: to ensure a stable policy environment; to support modernization through financing technological upgrades; and to help build global brands for Indian textiles.

With the dismantling of the MFA, there is a new opportunity, but India must make up for lost time. Singh assured the audience that the government will be there to help because it believes the textile sector has a strategic role in the Indian industrial economy.

Growth Areas
Stating that the new growth areas like technical textiles will be actively promoted, the Prime Minister said his government has already made clear its intention to launch a technology mission and technical textiles to support growth in this area.

The challenge in the 11th Five-Year Plan is to increase the skill base to make the sector competitive. India needs innovative responses to increasing jobs in the country. The textile industry, which has great potential to generate new jobs, has been suggesting this idea of linking guaranteed employment for a certain number of days in a policy framework that can respond adequately to the genuine demands of the sector, Singh mentioned.

March 25, 2008