Stagnation in textile exports due to rupee appreciation would lead to a loss of around 5,79,000 potential new jobs in 2007-08 alone, including the loss of 2,72,000 direct jobs in the industry and the balance in allied sectors, a study carried out by the Confederation of Indian Textile Industry has stated.

In the twelve-month period from June 2006, the rupee has appreciated by 12 per cent. "Most textile orders placed in June last year will be delivered in the US this year. The appreciation will bring down the earnings of Indian exporters significantly," DK Nair, secretary general, CITI said.

Commerce Minister Kamal Nath has pointed out that textile exports have fallen by 6-6.5 per cent in terms of the dollar.

A decline in exports, which is a distinct possibility at the moment, would affect employment in the sector and even lead to a loss of existing jobs, the study added.

CITI Chairman Shekhar Agarwal said, "Numbers show that while direct employment generated from textile exports reduced by 57,618 in 2006-07 consequent to a slowdown in exports, the incremental employment in the allied industries suffered a loss of 65,820 jobs during the year."

The textile and cloth industry is the largest employment provider in the country, after agriculture. The total direct employment in the textile industry as on March 2006 was estimated to be 33.17 million while the indirect employment generated was an even higher at 54.85 million.

According to recent estimates, the employment in the industry is expected to go up by 17.37 million over the Eleventh Plan period to touch 105.39 million by 2007-12.

CITI estimates show that deceleration in the growth rate of textile exports to 9.2 per cent in 2006-07, from 16.6 per cent in 2005-06, has pushed the employment generated from the textile export trade down by around 1.22 lakh jobs.