StatsGuru: Examining what ails the textile sector

Newly appointed Textiles Minister Smriti Irani has a tough task ahead to revive the country's textile exports. As Table 1 shows, India's textile exports actually declined to $36.25 billion in 2015-16, from $37.14 the year before. The sector now accounts for barely 2.28 per cent of total gross value added, as shown in Table 2. Within textiles, the top items of export are ready-made garments, both cotton and of man-made fibres, cotton fabrics and man-made yarn and fabrics, as shown in Table 3.

Over the past few years, India has been steadily losing export share to other developing countries. Unencumbered by strangling regulations, these developing economies have marched well ahead. China's textile exports were $287 billion in 2014, as shown in Table 4. Even Bangladesh's clothing exports outstrip India's, as Table 5 shows.

The importance of the textile sector stems from its potential of being a big employment generator. And though the sector has nowhere reached that potential in India, in the quarter ended December 2015, it added 72,000 jobs, second only to the IT/BPO sector, as shown in Table 6.

But, notwithstanding this spurt in employment, the number of mills closed during 2015-16 actually rose to 586, up from 559 the year before, as shown in Table 7. As a result, cloth production from the mill sector actually declined from 2,486 million sq mt in 2014-15 to 2,313 million sq mt in 2015-16, as shown in Table 8.

While the government has tried to address the problems plaguing the textile sector, it recently announced a Rs 6000-crore package and has also proposed radical changes to existing labour laws, reversing this decline is a tall order.