Impact of Globalization in Textile Industry

Globalization is indeed a vast concept that has permeated every industry and geographical location. Its impact on trade and commerce is undeniable, fostering unity among nations through economic interactions. In the past, trade was often the key to bringing warring countries together. Today, one can access a wide range of products from various corners of the Earth, from Swiss watches to French champagnes and Chinese noodles.

Technological advancements in information and communication have played a pivotal role in bringing countries closer together, facilitating global trade and commerce. The movement of goods, people, and capital has become seamless, even across long distances. The textile industry, too, has experienced the effects of globalization, which comes with its own set of advantages and disadvantages.

Outsourcing is one of the outcomes of globalization, where companies from developed nations typically outsource their manufacturing, marketing, and other backend tasks to developing countries. This practice is cost-effective due to significant currency differences between the two nations, often allowing companies to complete their work at half the price compared to domestic production.

Major textile manufacturing companies from countries like the USA and UK often establish their manufacturing units in developing nations like India and China to benefit from lower production costs. Outsourcing is financially lucrative for corporate entities. Studies indicate that approximately four million jobs have been transferred to countries such as India, China, and the Philippines. This trend is likely to continue, with more jobs shifting from developed economies to emerging ones in the near future.

Recognizing the advantages of outsourcing, many emerging economies have started targeting offshore clients. India and China face competition from various other developing nations such as the Philippines, Vietnam, Bangladesh, Myanmar, Brazil, and even African countries. Countries with weaker currencies often secure outsourcing contracts at lower prices than India and China. The competition for outsourcing projects among emerging nations has led to cost-effective solutions for corporate offices.

Corporate giants many times exploit the emerging countries owing to such competition for survival. The concept of 'sweatshops' suddenly caught attention in the world of textiles. Leading textile manufacturers made employees from overseas work for low wages in horrible working conditions. Despite laws to protect worker rights, employees were denied even wages required to support their lives and families. Many times, they were exposed to such working conditions that posed a serious threat to their health in the long run.

Besides, corporate giants shift their units from their home countries to emerging economies. So, the employees in their home countries suffer job losses. Little choices remain with the natives of the developed countries. Statistics show that since 2000, USA has lost more than 5 million manufacturing jobs. In 2007, US exports of textiles decreased to its lowest for a tenth year. Its employment in this industry fell by 9.2 percent.

Corporate houses are indulging in exploitative and selfish practices through the medium of outsourcing. There are hardly any international laws to control such practices. Corporate houses keep earning profits at the expense of employment opportunities in developed countries and fair wages to workers in developing countries. This spoils the economy of two countries. Interference in such activities is many times hindered in the name of free trade.

Nike, a leading sports goods manufacturer, got into limelight owing to its alleged sweatshops in 1990s. The company dismissed the claim stating that it had no control over its factories overseas, but had worked considerably towards improving its worker conditions overseas, since then! Similar allegations were levied on Adidas, an arch rival to Nike and GAP Inc., a leading global textile retailer. Many brand names in textile have passed through such allegations in the past.

The global community is becoming increasingly aware of such issues. Various organizations and institutions staged protests against such firms at various points of time. The World Fair Trade Organization (WFTO) is one such organization working against sweatshops and unethical sourcing. Students, Non Governmental Organizations (NGOs), and many others have held protests time and again against corporate giants indulging in unethical sourcing.

Sweatshops are present in the textile industry from ancient times. But this concept caught fire only since a few decades. Asia is home to majority of sweatshops in the world. South Asian countries are fast emerging as textile capital of the world, but sweatshops remain a shameful underlying truth about these industries. The workers are made to work for as long as 14 hours a day and denied even the basic wages.

Besides, developed countries like USA and UK, from where the jobs are outsourced suffer from job losses. Economists argue that it does not lead to job losses, but only leads to reduced wages. But this may not be true. The US and European economy suffered to some extent owing to outsourcing of jobs. Some believe that outsourcing has hit the economies of the two world super powers more than recession.

Globalization has had many advantages. But it also has this drawback. It has lead to the emergence of sweatshops. A new kind of exploitation has been given birth to. Corporate giants are cashing in on the poverty of the developing countries and making the already developed countries poorer. Textile manufacturers should outsource their work to other countries, but not after denying even the basic wages to the overseas employees.

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