Textile MSMEs in India: Leading the way to create more jobs and employment opportunities

Authored by Anurag Singh Khangarot, Co-Founder, Aachho 

MSME sector has been a key contributor to the country’s GDP. Even during the pandemic times, it showed tremendous resilience, helping the economy recover faster from the lockdown market dip. One of the key sectors that have outshone others and registered tremendous growth is the textile & apparel (T&A) MSMEs. 

The textile & apparel industry’s contribution to the country's GDP is around 5 per cent while in terms of industrial output, the T&A accounts for 7 per cent of the total value, making it one of the most promising industries in India. 

In fact, the T&A industry in India is one of the largest industries in the world and also the second-largest employer in the country. It has generated approximately 45 million jobs directly and over 60 million jobs in allied industries. 

There have been multiple driving forces behind the monumental growth of the industry and realising the full potential of each of these dynamics can help the MSMEs to unlock greater employment opportunities for the Indian workforce. 

●      Textile exports: A booster 

Being the world's fifth-biggest T&A exporter, the industry enjoys a 4 per cent share of the $840 billion global markets. The textile exports accounted for US $22.89 billion between April 2021 and October 2021. 

India Brand Equity Foundation (IBEF) also suggests that the T&A exports, growing at a solid CAGR of 11 per cent, are expected to cross $100 billion in the next five years. 

Increasing the exports not only creates foreign reserves but also, opens doors for better employment opportunities in the country. Developing MSMEs in the sector to boost exports can create an additional 75 lakh to one crore jobs (quite a number), taking into consideration the unemployment rate in India, which stands at 7 per cent. 

●      Promotional schemes and support from the government 

Textile Ministry, along with the Finance Minister in the Union Budget, announced several schemes and programmes to support & strengthen the industry. One such announcement for setting up seven mega textile parks across India is a welcoming move that will increase employment opportunities as well as boost the MSME growth. Another landmark proposal of the government has been the announcement of production-linked incentives (PLI) worth $1.4 billion that will prove instrumental in realising the capacity potential of T&A manufacturing units. 

Anticipating the significant role of the industry to create employment, the government has undertaken multiple reforms and plans to introduce labour-friendly schemes. For example, under the EPF Scheme, the Govt of India will bear 12 per cent of the garment industry employers’ contribution to the EPF for new employees, earning lesser than Rs 15,000 per month for the first three years. This reform will ensure that the workers get more in-hand wages thus, promoting employment in the formal sector. 

●      Advancements in digital textile technologies 

The investments in textile technologies have been increasing YoY and with the government’s liberal assistance under programmes such as Technology Upgradation Fund Scheme (TUFS) providing investments as well as subsidies, the textile industry is poised for illustrious growth in the coming years. 

●      Scope of self-employment opportunities 

Khadi & Village Industries Commission (KVIC) under the Ministry of MSME is also taking active measures to boost the growth of micro as well as small-scale textile industries in the rural areas.  

As per the scheme, over 10,000 people were trained in 2020-2021 through various training centres of KVIC (departmental as well as non-departmental). This will create self-employment & entrepreneurial opportunities, and rural development. 

●      More jobs for women 

The T&A sector is one such industry where women account for approximately 60-70 per cent of the total workforce. More than 27 million women in India are employed in the textile and apparel sector. The growing employment opportunities would mean more jobs for women thereby, increasing the participation and contribution of the women's workforce in the Indian economy. 

Bottom line 

The textile & apparel industry is on a rise and even with the stiff international competition from Asian countries such as Bangladesh, Vietnam, etc., the future of the industry seems brighter, owning to its endowed advantages of vast raw material supply (India is amongst the largest producer of cotton yarn & fabric), ample availability of human resources, and faster adoption of advanced textile technologies. 

Given the fact that the sector is able to sustain and increase the domestic as well as export growth, the industry will be able to become of the most lucrative sectors for creating employment & job opportunities for skilled, semi-skilled as well as a portion of the unskilled workforce, directly or indirectly.