Note4Students
From UPSC perspective, the following things are important :
Prelims level: Textile sector;
Why in the News?
Union Minister announced the Indian textile sector’s $350 billion business target by 2030, aiming to generate 3.5 crore jobs, despite recent challenges affecting the projected 10% CAGR.
Present Status:
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What caused the slump in the Indian textile sector in the last two financial years?
- Geopolitical Tensions: Global geopolitical issues reduced demand in key export markets.
- High Raw Material Prices: Cotton and Man-Made Fibre (MMF) prices surged, hurting competitiveness.
- Import Duties: A 10% import duty on cotton made Indian cotton more expensive than global prices.
- Supply Chain Disruptions: Quality control measures affected the availability and price stability of MMF, further straining production.
What are the other challenges?
- Evolving Business Models: The rise of e-commerce and direct-to-consumer retailing is reshaping traditional business systems in the textile industry.
- Sustainability Standards: Global brands are increasingly focusing on ESG (Environmental, Social, and Governance) criteria, forcing Indian manufacturers to adopt sustainable practices.
- Changing Consumer Preferences: Growing demand for comfort wear, athleisure, and multi-brand outlets is shifting consumer behavior, impacting smaller or less-known brands.
- Labour Costs and Productivity: Labour constitutes 10% of production costs, and the industry faces pressure to improve productivity through technology adoption and workforce skilling.
Way forward:
- Enhance Global Competitiveness: The government should consider reducing import duties on key raw materials like cotton and stabilize supply chains by aligning domestic prices with international markets, ensuring competitiveness in global exports.
- Invest in Technology and Sustainability: The industry should focus on adopting advanced technologies to improve productivity and meet global ESG sustainability standards, while simultaneously upskilling the workforce to handle these technological advancements effectively.
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