In Coimbatore on Wednesday, former Finance Minister P. Chidambaram stated that the solution to India’s stagnant textile and apparel exports would need to be capacity scaling up and technological advancements.
Participating in a discussion hosted by the All India Professionals’ Congress, the former Finance Minister stated that India should invest in growing the labour-intensive garments industry, which was second only to agriculture in terms of creating jobs, given its ability to demonstrate technological advancements in space and nuclear technologies.
As the second largest cotton-growing country in the world, and with the greatest population, India should technically have the largest labour force and high labour participation. Chidambaram stated that employing labour is essential to India’s economic future, but he also expressed concern over the country’s 26 per cent youth unemployment rate, which he said is alarming.
India used to lead the world in clothing exports, but now it trails Bangladesh, a smaller nation, and Vietnam, an even smaller nation. The former Finance Minister stated that India’s prioritisation of electronics and other capital-intensive industries at the expense of labour-intensive industries is the reason the two smaller countries have benefited more from China’s decline in the textile sector (due to its focus on production of higher value products). The disadvantage has only been exacerbated by the 13 per cent tariff increase. In comparison to Bangladesh and Vietnam, the average size of textile factories was also substantially smaller.
Bangladesh saw a 65 per cent increase in garment exports between 2016 and 2023, despite a 15 per cent decrease overall. According to Chidambaram, India exported US $ 16.2 billion worth of clothing in 2022–2023. He cited data from the Apparel Export Promotion Council. It fell to US $ 14.5 billion in 2023–2024, and some increase is anticipated for the current year, albeit at a slower rate than in 2022–2023. According to Chidambaram, the Centre has the responsibility of figuring out the answer.
