Declining exports following rupee appreciation is threatening to tear apart the composition of Indian textile industry. Estimates suggest that lower exports of textile in 2007-08 will render around 350,000 workers jobless.
The figure represents direct employment loss. If other allied industries such as dyeing and printing, chemicals, packaging, handlooms and power looms, processing units are taken into consideration, the job loss would be much higher.
Exports of textile and clothing from India, which stood at Rs 7,600 crore ($19 billion) in 2006-07, is likely to dip by around 10 per cent in 2007-08 on the back of rupee appreciation against dollar and slowdown in the US economy.
“Direct and indirect job loss would be there but it is very difficult to quantify the employment loss," said JN Singh, textile commissioner and chairman of the Cotton Advisory Board (CAB).
The Confederation of Indian Textile Industry (CITI) pegs the direct employment loss at 350,000.
“For every export loss of Rs 1 crore, there is a job loss of 34-35 workers. Export reduction of 10 per cent works out to be Rs 10,000 crore. Considering this, over 350,000 workers will be rendered jobless following a fall in exports by Rs 10,000 crore,” said DK Nair, secretary general of CITI.
Garment and spinning units will be the biggest losers. "Garment manufacturing units face a direct competition from countries like China, Sri Lanka, Vietnam, Indonesia, Cambodia and Bangladesh, which have substantial exports supported by better labour productivity, better infrastructure, and favourable currency movements. As compared to that, India has been facing currency fluctuations of around 11-12 per cent," said Nair.
There are roughly around 9,000 garment units, apart from 500,000 powerloom units and 4,000 spinning units.
While directly the textile industry employs 35 million workers, nearly 50 million people are indirectly associated with it, including cotton farmers, ginning and spinning mills, dyeing and printing units, chemicals, paper and packaging industries.
The problem of job loss can be gauged by declining exports of synthetic fabric from Surat. The Rs 25,000 crore synthetic textile industry of Surat used to export synthetic fabric to the tune of Rs 1,100 crore a few years ago, which has come down to around Rs 800 crore following surge in the value of rupee.
Surat used to supply fabric to garment manufacturers in North India, including Delhi and Rajasthan.
“The supply to North India has come down by 60 per cent. Many of them have either slowed down production or switched to other businesses, which has left many workers job less. Around 1.5 million jobs, both direct and indirect, would be lost,” said Devkishan Mangani, acting president of Surat Textile Traders Association.
