Textile sector could see 10 lakh job cuts

The $45 billion Indian textile industry which is reeling under rupee appreciation since the beginning of the year could see further worsening impact on employment front if rupee keeps rising against dollar. The industry, which stands amongst the top three forex earners, has already lost jobs pertaining to shut down of several manufacturing units across the country.

Expressing concerns over rupee effet, textile minister Shankarsingh Vaghela, said, "If rupee keeps rising like this, industry would see loss of 10 lakh jobs this year."

Such a statement from the government has come at a time when widespread job cuts have been reported from Gurgaon (north-based garment manufacturing hub) and Tirupur (south-based hub). The entire industry employs over 350 lakh people in the country.

Industry experts, till two months back, were estimating a job loss of up to 6 lakhs, but it seems the government has realised the gravity of potential damage. Already, the country's apparel exports is struggling to maintain its last year levels which was about $8.5 billion.

He acknowleged the fact that apparel sector is "the most vibrant in India and holds important share in India's exports.

Talking to reporters on the sidelines of the second Asian Apparel Conference, Vaghela said, "I understand that exports in some section (in textiles) has got the hit. Rupee appreciation has hit textiles in general and apparels in particular. But I am hopeful that we will be able to meet the export target in the current financial year."

On the contrary, according to industry sources, country's overall exports may not reach more than $ 22 billion against the target of $25 billion for FY08, a straight fall of 12 per cent.

Last week, textile industry stalwarts and export promotion councils had a meeting with Finance Minister, P Chidambaram. However, except showing sympathy, nothing concrete was assured to the industry.

"If exports do not increase so will be the employment. But we are hopeful that government will take some positive measures for the industry as Ministry of Finance is liberal on the issue," added Vaghela.

He urged the industry players to strengthen product value, quality and bring more competitiveness. "Quality assurances should be given not only in the value added products but to all the products," he said.

According to textile industry's 2010 vision, the target is $ 85 billion, of which $ 50 billion will be from exports. However, industry experts now are dithering on these highly ambitous numbers.

Moreover, in the current five year plan (2007-12) investment earmarked for taking industry's size to over $ 110 billion was Rs 1.94 lakh crore, which with the current slowdown in the sector, looks not possible.