India’s textiles sector is likely to touch US $250 billion in the next two years from the current level of US $150 billion, a study said today.
The joint study by Assocham and Resurgent pointed out that the textile sector in India accounts for 10 per cent of the country’s manufacturing production, 5 per cent of its GDP, and 13 per cent of exports earnings.
The study observed that textile and apparel sector is the second largest employment provider in the country and employed nearly 51 million people directly and 68 million people indirectly in 2015-16.
However, it said that demonetisation and the transition to GST have hit smaller players hard.
“The number of workers affected due to closure of cotton and man-made fibre textile units (bigger units that comprise the non-SSI segment of the industry) during 2016-17 was 4,356 on account of the closure of 18 units, according to official Textile Ministry data on non-SSI units,” said the study.
“During the previous two years, the numbers were 7,938 workers affected by the closure of 27 units in 2015-16 and 5,384 workers affected from the closure of 21 units in 2014- 15, taking the cumulative figure to over 17,600 workers impacted by the closure of 67 units in the last three years” it said.
It found that the rollout of the Goods and Services Tax (GST) has further hit small and medium players in textile hubs such as Surat, Bhiwadi and Ichalkaranji.
Moreover, capital goods firms are struggling as most of the downstream sectors are saddled with excess capacity and low demand.
Releasing the study, Minister of State for Textiles Ajay Tamta said the textile and handicrafts sector is economically important from the point of low capital investment, high ratio of value addition, and high potential for export and foreign exchange earnings for the country.