Year-End Review: 2008

The Indian Textiles Industry has an overwhelming presence inthe economic life of the country.  Apart from providing one of the basicnecessities of life, the textiles industry also plays a pivotal role throughits contribution to industrial output, employment generation, and the exportearnings of the country. Currently, it contributes about 14 percent toindustrial production, 4 percent to the GDP, and 13.50 percent to the country'sexport earnings. It provides direct employment to over 35 million people, whichincludes a substantial number of SC/ST, and women. The Textiles sector isthe second largest provider of employment after agriculture. Thus, the growthand all round development of this industry has a direct bearing on theimprovement of the economy of the nation.

Due to policy measures initiated by the Government in therecent past, the Indian textiles industry is in a stronger position than it wasin the last six decades. The industry which was growing at 3-4 percent duringthe last six decades has now accelerated to an annual growth rate of 16 percentin value terms and will reach a level of US$ 115 billion (exports US$ 55billion; domestic market US$ 60 billion) by 2012, from US$ 52 billion in 2007-08.The catalyst for this exponential growth is a buoyant domestic economy,substantial increase in cotton production, a conductive policy environmentprovided by the Government, and the end of the Multi Fibre Arrangement (MFA),on December 31, 2004. The rationalization of fiscal duties undertaken duringthe last four years has also provided a level playing field in all segments ofthe industry, resulting in the holistic growth of the industry. A strongfoundation for industry has been laid on which world class manufacturing unitscan realize their full potential and make a mark in the international economy.

The growth manifests through a consistent increase inproduction of fabric, per capita availability of cloth and investments. During2007-08, the total production of fabric was 57 billion sq mtrs, compared to 53billion sq mtrs in 2006-07 and 50 billion sq mtrs in 2005-06. During 2006-07,the per capita availability of cloth was 39.60 sq mtrs, compared to 36.10 sqmtrs in 2005-06 and 33.10 sq mtrs in 2004-05. The textiles sector has witnesseda spurt in investment during the last four years, increasing from Rs.7,941crore in 2004-05 to Rs.16,194 crore in 2005-06, to Rs.61,063 crore in 2006-07,and to Rs.19,308 crore in 2007-08. The investment between 2004-08 was Rs.1, 04,506crore and it is expected that investments will touch Rs.1, 50,600 crore by2012. This enhanced investment will generate 17.37 million jobs (comprising12.02 million direct and 5.35 million indirect jobs) by 2012.

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Source:AEPC Weekly