Is the textile industry at the cusp of change… this is the question that everyone in the industry is asking. And what triggered the thought…, our very upfront Prime Minister of course!
No one can deny that there is an air of vibrancy in the country and no sector is left untouched. Since the new Government took over in May, the people of this country are continuously amazed at how changes are coming in, some very visible, while others just starting points for change. For the textile industry, the very fact that the new Government initiated the process of reviewing the National Textile Policy, 2000 in an effort to facilitate the Indian textile industry to gain and sustain a global position in the manufacture and export of clothing, keeping in view the various changes both on the domestic and international fronts, sends a signal of positivity…
Soon after the new Textile Minister took charge, an Expert Committee, including leading industrialists from the textile sector, was constituted to draft a new National Textiles Policy that aims to achieve US $ 300 billion exports by 2024-25 and create an additional 35 million jobs by attracting both domestic and foreign investments. The draft vision paper, given to the ministry in July, aims at bringing investment of US $ 120 billion. Industry experts since then have been on a high. This document, if converted into policy, will be a game-changer for the apparel sector. For the first time, the Government has recognized the importance of the domestic sector, and that apparel is the apex sector which must be encouraged,” says Rahul Mehta, President of Clothing Manufacturers Association of India.
While welcoming the draft of a new National Textiles Policy, Prem Malik, Chairman, CITI, pointed out that the draft has not addressed some important issues such as the need for fibre neutral fiscal policy, other measures required for diversifying into the highly potential MMF textiles segment and outdated policy stipulations such as Hank Yarn Obligation and Handloom Reservation Act. “CITI, along with other stake holders in the textile industry, have studied the draft report in detail and made recommendations for improving it to meet the needs of the industry. I am hopeful that the expert committee would look into these pertinent recommendations and finalize the report soon, after incorporating the necessary changes,” says Malik.
Though, the industry feels that the growth targets are relatively high in comparison to past performance but direction of reforms seems to be right. “First of all, the draft textile policy shows the ambitious attitude towards the growth of Indian textile industry and increase the size of textile industry to its potential. The necessary reforms required to achieve the desired objectives are well identified,” reasons DL Sharma, Managing Director, Vardhman Yarns & Threads Ltd. In fact, now that the observations of the industry have come in and the policy is in final stages of preparation, everyone is eagerly awaiting the final document.
In the meanwhile, praise for the show of intent has been pouring in, says Sharma, “The Textile Ministry’s eagerness in attending to industry problems is quite visible. The availability of the minister as well as of bureaucracy has been quite supportive to the cause of the Indian textile industry.” On a more cautious and practical note Sanjay Jain, MD, TT Ltd. adds, “We see the urge to do something – the intent is there for sure. However, we still wait to see how this gets translated into action. Further, one area where the industry is disappointed is the speed of clearing incentives under TUF and also following up with Commerce Ministry for various export incentives.”
Some of the initiatives that have been announced over the last few months besides the proposed draft include – Integrated Textile Parks, Integrated Processing Parks, Skill Development Schemes at the rate of Rs. 10,000 per trainee, sanction of Incubation Centres and Workers Hostels, A Tex-Venture Capital Fund in association with SIDBI to provide equity to start-up entrepreneurs, Mega Clusters in Varanasi, Surat, Bhuj, Lucknow, Bareilly, Burhanpur, Mysore and Trichy in Tamil Nadu, E-commerce initiative has been launched with Flipkart providing marketing opportunity for handloom products, proposal to extend 24/7 customs clearance facility at 13 airports and 14 sea ports resulting in faster clearance of import and export cargo.
Some may argue that there is nothing drastically different from the past and textile parks have already sprung up around the country, most of them fighting for survival. An interesting point to note is that most of the parks set up in the past are driven by big corporate houses. All agree that the Government needs to be more proactive. “There is strong need for the large number of parks for medium to small scale textile and garmenting units having common infrastructure in terms of effluent treatment plants, training centres, product development centres and other such services. It is not possible for small textile units to set up these facilities on their own. Therefore, we believe that setting up of textile parks especially for the medium and small textile units are desirable,” says Sharma.
Taking the argument further, Jain reasons, “Misuse of a policy due to loopholes, doesn’t mean that you stop the policy. You need to plug the loopholes and move ahead. I think that’s what the Government is doing – they have stopped considering land cost in the project cost eligible for subsidies – this will go in a big way in actual infrastructure being created. Further now as investment by sponsors of such Parks will be more – so hopefully the intent to make them successful will be much more.”
Another interesting development, which is all honestly, began before the new Government came to power, but has attracted much attention, is the successive textile policies being announced by State Governments to attract investment in the segment. While the industry feels that it is quite encouraging that some leading states aiming at high growth and employment are making efforts to attract textile industry to their respective states, the backlash has been felt on the spinning sector. “Though these state policies will aid growth of the industry, however they have been counterproductive for spinning sector, which is already well developed in India. Such large incentives, is making new investments come in new states while the country as a whole has excess capacity and the industry isn’t doing well. While TUF has been calibrated to ensure that investments flow where required state policies have disturbed the complete rationale and thought between differential segment incentives,” argues Jain.
Yet, it cannot be ignored that keeping in view the potential for growth, as also indicated in draft textile policy, it is necessary that states participate proactively. Moreover, the actual execution of the country’s policy has to be at the state level. Therefore, industry watchers agree that states’ activism for the growth of textile industry will help in achieving national objectives in this regard. “The integrated approach for the growth of the textile industry in India has been a long standing demand of the Indian textile industry. In fact, in the past efforts have been made in this direction and the different treatment for different segments of the textile industry based on technology, scale of production and even fibre used has been reduced significantly. This issue has been well-addressed in the draft textile policy, which is likely to bring more integration in the approach for the textile industry growth in India,” avers Sharma.
In the most recent development, the Government has announced portable PF membership to workers and control of ‘Inspector Raj’ by stipulating norms for inspection of factories. Reacting to the announcement, Chairman CITI stated that in the highly labour-intensive textile sector, rigid labour laws have been a major hindrance to investments and scaling up of production facilities. “The programme “Shramev Jayate” announced by the Prime Minister, coupled with the “Make in India” programme will be of immense help to the textiles sector. Further, labour reforms would encourage investments in large factories and scaling up of production facilities would help in achieving economies of scale as well as in meeting the increasing demand for high volume products from importers. It is clear that the Government is seriously looking at the need for an industry-friendly and worker-friendly labour regime. The textile industry whole heartedly welcomes this initiative and hopes that it will be followed by continued liberalisation of the rigidities in our labour laws with the focus on creating more and more productive employment,” concludes an upbeat Malik.
Bharat Tex Special Report 2026 
