Textile Sector : Changes in South Asia – UPSC GS3

Market trends in South Asian countries:
  • India
    • India constitutes around 4% of the $840 billion textile and apparel market worldwide.
    • India is the fifth largest exporter in the textile market. (Top 4 –  China, Germany, Bangladesh, Vietnam)
    • With the successful implementation of the Technical Upgradation Fund Scheme (TUFS), India has developed backward links in the cotton and technical textiles industry.
  • Bangladesh
    • The country joined the group of textiles and clothing producing countries in the 1980s on the onset of civil war in Sri Lanka.
    • Favourable industrial policies along with zero duty on raw material and capital machinery; lower production costs and negotiations of free trade agreements with the western markets have helped Bangladesh.
    • Its capacity to adopt technology faster has also significantly helped Bangladesh.
    • Bangladesh has also specialised in capturing the low-value and mid-market price segment of cotton products
  • Pakistan
    • Pakistan has made steady progress in the tactile market in recent years.
    • Pakistan gained a 24.73% increase in textile exports in 2021-22, accounting for about $10.933 billion.
    • Despite its advancements, issues with respect to skilling and policy implementation hinder its potential.
  • Sri Lanka
    • Sri Lanka is witnessing progress in ascending the value chain.
    • Advancement in training, quality control, product development and merchandising are attracting international brands to Sri Lanka.
Impact of the Fourth Industrial Revolution (4IR):
  • The 4IR has resulted in the integration of technology in the production life cycle.
  • Technologies such as robotics, artificial intelligence (AI), virtual reality, 3D printing, etc. are now extensively used in production processes.
  • The advent of these technologies has increased production efficiency in areas such as cutting and colour accuracy.
  • Adoption of new technology also results in diversifying in-product baskets.
  • The 4IR also brings about various challenges that affect production. The Asian Development Bank predicts that there will be an increase in issues such as
    • Job losses
    • Increased disruption, inequality and political instability
    • Concentration of market power by global powers
    • Increase in vulnerability to cyberattacks.
  • India with an unemployment rate of 7%, faces the challenge of job creation in the wake of increased automation.
Remedies to challenges posed by 4IR 
  • Integration of skilling and technological investments will be crucial in eliminating obsolete jobs, and creation of new and useful jobs.
  • Ensuring living wages and making education more accessible.
  • Adopting methods such as digitalisation and automation in various stages of production will help in controlling production quality and timely delivery.
  • Better logistical support will also assist in cost-cutting, as reshoring and near-shoring help gain revenue.
Other factors that impact the exports
  • Sustainability:
    • Sustainability is an important consideration for exports.
    • The sector through the release of its effluents in water bodies constitutes around 17%-20% of all water pollution.
    • Sustainable mechanisms such as organic farming, sustainable manufacturing of energy through renewable sources and the creation of a circular economy are to be adopted.
  • Labour costs:
    • Affordable human resources is one of the key factors for the better performance of the countries in the region.
    • The allegations and sanctions of the U.S. on China due to human rights violations provide a chance to the South Asian countries to strengthen their market.
Various initiatives by the countries:
  • India:
    • India has a huge potential in terms of resources, infrastructure, technology, demographic dividend and policy framework.
    • India has created a Centre for the Fourth Industrial Revolution.
    • The Indian government through project sustainable resolution has committed to promote sustainability.
    • India has proposed an investment of about $1.4 billion in the sector and the creation of all-in-one textile parks
    • India has extended tax rebates in apparel export till 2024, which will help achieve competitiveness and policy stability.
    • Labour law reforms, additional incentives, income tax relaxations, duty reductions for man-made fibre are also other key initiatives by India.
  • Bangladesh:
    • Bangladesh has initiated ‘green manufacturing’ practices to ensure sustainability by the efficient use of resources.
    • Bangladesh has envisioned the year 2041 for technological advancement, particularly in Information and Communication Technology.
    • Bangladesh has increased its investments in technology significantly in recent years.
  • Pakistan:
    • Pakistan has also increased its investment to adopt modern technologies.
    • Pakistan has imported advanced machinery worth $504 million in 2019-2020.
Way forward
  • Countries should ensure diversification technology, the product basket and the client base.
  • Increase the capabilities to meet the rising demands for man-made textiles.
  • Device innovative approaches that are transparent, safer, and sustainable.
  • Reskilling and upskilling of the labour force.
  • The governments should lend proactive support to infrastructure development.
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