Former Union minister P Chidambaram has suggested that there must be technological upgradation, lesser tariff control, and upscaling of the garment manufacturing units for the growth of the apparel sector in the country.
Noting that the Union govt has not taken steps to facilitate the growth of the apparel industry, despite declining exports, Chidambaram said the import duty must be slashed for sustained growth of the garment sector.
Speaking at a session titled ‘How can India boost its exports of textile and create millions of jobs’, organised by the All India Professional’s Congress in the city on Wednesday, Chidambaram said govt control has crept into the industries sector through instruments like the Company’s Act, Income Tax Act, and DGFT Rules (Director General of Foreign Trade).
“What we removed in 1991 has crept in through the backyard. This is because the govt’s awareness is less,” he said.
“Only if those on top, the ministers, are not dependent on officers, then the rules can be simplified,” he said, pointing out that when the BJP govt took over in 2014, the overall customs tariff was only 8 % but now it was 13 % on an average. An economy under excessive control cannot compete in the global market,” he said.
Chidambaram said apparel exports from India have declined by 15 % in seven years of Prime Minister Modi’s govt from 2016. During the same period, exports from Bangladesh have increased by 65%.
According to the Apparel Export Promotion Council’s data, India exported $16.2 billion worth of goods in 2022–23. The next year, it declined to $14.5. In 2024 – 25, there is some improvement but still below the 2022- 23 level, he pointed out.
“I am not sure if the govt is aware of this data. If they are aware, then they have not taken any steps to improve exports. They are ignoring the largest employing industry, outside the agriculture sector,” he said.
Chidambaram said the govt had focussed on the capital-intensive industries while neglecting the labour-intensive industries. He said China’s decline has benefitted Bangladesh and Vietnam garment sectors, but not India. He said our tariffs on apparel have increased by 13 % in the last ten years.
Prescribing a remedy, Chidambaram said that money must be poured in for technological upgradation, import duty must be slashed and industries must upscale themselves. If the private sector is not ready to invest in technological upgradation, then the govt should take up the responsibility, he said.
Garment exporters highlighted issues like the need for a free trade agreement, infrastructure development like the extension of the proposed Coimbatore metro rail till Tirupur and increasing automation to address the skilled labour shortage.
Economist Rathin Roy and All India Professional’s Congress chairman Praveen Chakravarty were present.
