Textile sector cutting back on jobs

With rupee appreciation adversely affecting apparel export, the second largest employment generator, the textile sector, which employs 25 million workers, has started cutting back on jobs and laying off workers to contain costs.

"The total job loss for the textile industry for this year touched 500,000 and about 35,000 jobs have been lost in April alone due to an 18.25 per cent decline in exports because of sharp appreciation in rupee," says P D Patodia, chairman, Confederation of Indian Textile Industry.

According to industry estimates, textiles exports have declined by 6.8 per cent during the April-May period of 2007-08, while cotton yarn has seen a negative growth of 9.9 per cent.

India's textile exports amounted to $19 billion last year and the target for this fiscal was set at $25 billion.

"We have demanded an increase in duty drawback rates, reduction in interest rates for pre and post shipment credit as well as exemption from service tax. The export target of $25 billion set for the current fiscal is unlikely to be achieved with this growth," Patodia adds.

Vivek Kumar, senior merchandiser, Maya Exports, which does business in US dollars, says that his company has suffered heavy losses in export orders of 10-20 per cent this year.

"Most of the big export companies has done retrenchment up to 40 per cent to contain costs," he says.

He adds, 80-90 per cent of Indias textile exports are dollar denominated and with declining exports, the companies have released employees in a bid to contain costs and the worst hit by this slump is textile mill workers.