India’s Apparel Exports Stuck at 3% Global Share: Why
Why in the news
Though it is the biggest job provider after agriculture, India’s garment industry has not widened its share of world trade.
Key facts
- Over 80% of units are small, so scale and integration are weak.
- Jobs: 45+ million, led by Tamil Nadu, Gujarat and West Bengal.
- Full chain from cotton to garment gives high value addition and supports dyes, logistics, machinery and retail.
- Shahi Exports alone employs 70,000+ women.
| Scheme | Role |
|---|---|
| PM MITRA Parks | 7 mega textile parks to cut logistics costs |
| Amended TUFS | Aid for technology upgrades |
| RoSCTL | Refund of embedded export taxes |
| SAMARTH | Skilling in the apparel chain |
| PLI (Textiles) | MMF and technical textiles; PLI 2.0 may add large garment units |
Bottlenecks
- Capital costs about 9%, against 3-4.5% in China and Vietnam.
- Double overtime pay and complex rules discourage formal hiring.
- Scattered production raises turnaround time and cost.
- Low female labour force participation (FLFP).
Way forward
- 25-30% capex subsidy and 5-7 year tax holiday for units with 1,000+ machines.
- Overtime at the ILO standard of 1.25x; simpler compliance.
- Use 25-30% of MGNREGA funds for garment wage support.
- Two MITRA apparel hubs in Uttar Pradesh and Madhya Pradesh.
- Switch to export-linked incentives (ELI).
Exam angle
- Expand: RoSCTL, TUFS, MMF, ELI.
- ILO overtime norm: 1.25x.