A third of India’s textile workers — 30 million— lost their jobs and more could go

• India’s textile industry, which employs 100 million workers is the second largest to generate employment opportunities.
  
• Roughly a third of spinning mills have shutdown amid slowdown in export and domestic sales — leading to huge job losses
  
• The cotton yarn export fell by 34.6% at $696 million in the quarter ending in June, shows the Directorate General of Commercial Intelligence and Statistics (DGCI&S).

In a bid to boost the textile industry in India, the Ministry of Textiles drafted guidelines in the National Textile Policy to export as much as $300 billion by 2024-25, and hoped it would add 35 million jobs.

That has not happened. Over and above, due to slow down as many as 30 million jobs in the sector lost their jobs. This will result in a deep job crisis across the country as textiles is the country’s second largest employer.

More jobs to go

Due to the state of affairs, more job cuts are inevitable. Sluggish exports and reduced consumer demand has resulted in production cuts. Roughly a third of the spinning mills have shutdown. The cotton, jute, fibre and wool industry is facing its worst time in nine years.

The textile industry employs over 100 million people across the country. And the mill association is seeking government intervention to prevent job loss and “avoid the spinning industry from becoming a Non-Performing Asset (NPA),” a recent advertisement titled by Northern India Textile Mills Association (NITMA) said.

In the spinning sector itself, over 200,000 workers have lost jobs, Sanjay Jain, Chairman, Confederation of Indian Textile Industries (CITI), told BusinessLine.

The textile hub of Tamil Nadu is affected as well as nearly 300 spinning mills have shut down. Across the country, as many as 605 have shut operations, according to M Jayabal, president of TN Open-end Spinning Mills Association (OSMA). Expectedly,120,000 turned jobless in the last one year.

Taxes and interest rates

According to the NITMA, there has been a decline in cotton yarn exports as well. The export fell by 34.6% at $696 million in the quarter ending in June, as per Directorate General of Commercial Intelligence and Statistics (DGCI&S).

This slowdown could reach the farms as well. In fact, the cotton association doubts if the 40 million bales of cotton may not even find buyers in India or overseas.

And they blame taxes for that. The State and Central level taxes have made the Indian yarn non-competitive globally. High interest rates in the current regime which the central bank has been trying to bring down but unable to is affecting a large number of small and medium sized enterprises of the industry.

This is combined with the higher cost of raw material is higher in India, as compared to Bangladesh, Sri Lanka and Indonesia. This has led to ₹20 ₹25 loss per kilo. These competing countries have interest rates at around 5%, while it more than twice that at 10%-12% in India.

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