Date:25/11/2008 URL: http://www.thehindu.com/2008/11/25/stories/2008112552621600.htm

Business

Textile sector suffers job losses, decline in production

M. Soundariya Preetha

Slowdown in domestic demand, drop in exports are cited as the reasons

— FILE PHOTO

CRISIS LOOMS LARGE: A woman operates an imported wider-width shuttleless loom.

COIMBATORE: At least seven lakh jobs are expected to have been lost in the textile and clothing sector due to an estimated two per cent decline in production since April this year. This has been attributed to the slowdown in domestic demand and a decline in exports, according to D. K. Nair, Secretary General of the Confederation of Indian Textiles Industry.

Mr. Nair told The Hindu that according to a study by Crisil in 2007, the textile and clothing sector in the country provided direct employment to 35 million people. For a one per cent decline in production, about 3.5 lakh jobs were lost.

According to the Central Statistical Organisation’s index of industrial production, the textile sector saw a 4.9 per cent decline in September this year when compared with the same period last year. Textile imports by the U.S. from India came down by 1.56 per cent in value terms between January and August this year. For garments, it was a 4.8 per cent decline. Nearly 50 per cent of the textile goods produced was for exports and the main markets were the U.S., the European Union and Japan. Exports to the EU and Japan were also witnessing the same trend.

Industry estimated that since April this year, production had come down by two per cent resulting in the loss of nearly seven lakh jobs.

Units in the organised sector would not be able to stop production immediately when there was a slowdown. Hence, they were facing losses due to the sluggish sales. The job loss was mostly in the smaller units.

A number of these units had scaled down production or closed down, he said. The production and hence, the job loss had happened mainly in the small and medium-scale units in the spinning, garmenting and hand processing segments. The confederation planned to take up a detailed study of the status of the industry shortly.

Unless the Government initiated relief measures immediately, the sector expected a worsening of the situation, he said.