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Rediff.com  » Business » Why India is staring at 10-15% decline in textile production

Why India is staring at 10-15% decline in textile production

October 19, 2018 23:17 IST

The country’s textile industry is concentrated in a few pockets of Gujarat and Maharashtra in the west and Tamil Nadu and Karnataka in the south.

The exodus of Hindi-speaking migrant workers from Gujarat, following a series of violent attacks on them, could lead to a decline in India’s textile output by 10-15 per cent this year.

 

“Gujarat is a major textile producer. Hence, the mass return of migrant workers from the state is set to reduce India’s overall textile output by 10-15 per cent this year,” said R K Dalmia, president, Century Textiles and Industries, a leading player.

The country’s textile industry is concentrated in a few pockets of Gujarat and Maharashtra in the west and Tamil Nadu and Karnataka in the south.

A large proportion of workers employed by these units comes from Bihar, Uttar Pradesh, and West Bengal.

Unlike in the developed countries, textile factories in India are not fully automated and remain labour-intensive.

Gujarat contributes nearly 80 per cent to India’s overall production in synthetic textiles. All units in the segment are facing labour scarcity.

While large players have employed workers on a regular basis, adhering strictly to labour laws, small- and medium-sized units are facing huge problems in terms of labour availability.

Most of such units have, therefore, reduced their production by 20-25 per cent or higher.

The flashpoint of the crisis was the rape of a minor girl allegedly by a migrant from Bihar.

The incident triggered attacks on north Indians across Gujarat, resulting in their mass return to home states.

The number of migrant labourers in Gujarat is estimated at 10 million.

According to some textile representative bodies, the current labour shortage can partly be attributed to migrant workers returning to their native places on the occasion of Dussehra and Diwali.

This, they said, was a seasonal phenomenon.

“Typically every year, labourers take three-four months of leave around October and return a month or two after Diwali.

"The industry prepares for the workers’ shortage months in advance or extend their delivery schedule to meet the labour shortage.

"This year, however, the impact is wider due to mass return of migrant workers,” said Siddharth Rajagopal, executive director, the Cotton Textiles Export Promotion Council of India (Texprocil).

Delivery of export orders has been a perennial issue for textile exporters due to labour shortage.

While the outlook for textile exports improved due to a steep depreciation in the rupee against the dollar, the labour shortage could prove to be a speed breaker.

A senior official of the Synthetic & Rayon Textiles Export Promotion Council, under the Ministry of Commerce, said labour shortage had always been an issue in this sector.

“While the return of migrant workers might lead to some impact, it is hard to quantity in terms of their business volume and contribution in exports,” he said.

"Moreover, with the employment guarantee schemes, workers also find jobs in their home towns.

"So, many of them return after their leave period gets over, while a number of skilled workers also get migrated to other industries, including agriculture," he added.

The data compiled by the Confederation of Indian Textile Industry shows around 100 million people are employed in the Indian textile industry, directly or indirectly, across the country.

Photograph: Reuters

Dilip Kumar Jha in Mumbai
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