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With textiles in Piyush Goyal’s portfolio, plan to boost exports and jobs gets rolling

Piyush Goyal, the minister in charge of boosting trade and industry now also has charge of India’s second-largest employment-generating sector. This is expected to create more convergence in policymaking.

July 08, 2021 / 01:26 PM IST
Union Minister Piyush Goyal (File image)

Union Minister Piyush Goyal (File image)

In the midst of the resignations of major ministers, the flurry of new faces in the Cabinet and the reallocation of portfolios on July 7, little attention was paid to commerce and industry minister Piyush Goyal, who was given additional charge of the textiles ministry.

Apart from handling India’s trade and industry, Goyal also held the railway and consumer affairs portfolios before the latest rejig. Now, the country has a new railway minister in Ashwini Vaishnaw while Goyal takes over the textiles ministry, previously headed by Smriti Irani.

Goyal’s additional charge hasn’t come as a surprise for senior bureaucrats who say there’s been a push to bring the two ministries closer for a long time. Interestingly, both ministries are based in the historic Udyog Bhawan building in the heart of New Delhi, where the offices of their respective officials are separated by a simple corridor.

“Over the years, discussions have been held multiple times to work towards bringing the textiles ministry under the commerce department, or at least bring it closer in operations. But most of those proposals were shot down,” a senior commerce department official said.

The rationale behind such attempts was to create more convergence in policymaking, which would help to boost earnings and exports for India’s second-largest job creating sector, the official added.

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Big business

In terms of employment, the textiles and apparel industry in India is only behind the overall agricultural sector. It provides direct employment to 45 million people and 60 million people in allied industries, according to Invest India, the government’s investment promotion arm.

India is among the world’s largest producers of textiles products and apparel. The domestic textiles and apparel industry contributes 5 percent to India’s GDP, 7 percent of industry output in value terms and 12 percent of the country’s export earnings.

The share of India’s textiles and apparel exports in mercantile exports was 11 percent in 2019-20. With the commerce minister now responsible for the sector, the unique trade issues that have eaten away at India’s competitiveness in the global market for textiles are now expected to be given more focus.

Indian companies and exporters have continuously lost market share overseas to more aggressive rivals from China, Bangladesh and Thailand. This has been excruciatingly large in segments like apparel.

What to expect

The latest move is expected to refocus efforts on drawing more investments in the sector, which received $3.75 billion till March 2021. The same is expected for manufacturing.

While there are almost a dozen incentive schemes for manufacturing, myriad issues ranging from the lack of working capital and outdated technology to the fragmented nature of supply chains have held it back. To double the industry size to $190 billion by 2025-26, seven mega textile parks have been planned.

Closer alignment between the ministries is also expected to lead to synergies in policymaking, as was seen in the case of manufacturing personal protective equipment, said a senior person aware of the matter.

India became the second-largest manufacturer of PPE in the world, quickly certifying more than 600 companies to produce them. As a result, the industry’s global market worth is expected to be over $92.5 billion by 2025, up from $52.7 billion in 2019, according to government estimates.
Subhayan Chakraborty
first published: Jul 8, 2021 01:26 pm

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