India once dominated textile trade. It needs institutions to make a mark again, Pg11

Key Highlights:

• India, historically a global leader in textiles, currently holds only about 3% of the $521 billion global apparel market.
• Archaeological evidence from Harappa and Mohenjodaro shows textiles were integral to India's economy for millennia.
• The Industrial Revolution shifted competitive advantage from artisanal skill to technology, impacting India's textile dominance.
• India aims to achieve $100 billion in Textile and Apparel (T&A) exports by 2030.
• The PM-MITRA parks initiative, announced in 2021, seeks to create integrated textile ecosystems.
• The apparel sector generates 153 jobs for every ₹1 crore invested, highlighting its employment potential.

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Detailed Insights:

• India's textile industry possesses a fully integrated value chain from cotton to garment manufacturing and exports.
• Bangladesh and Vietnam have significantly increased their global apparel export shares, unlike India's stagnation.
• Key challenges for India include the "missing middle" of mid-sized firms and a cotton-skewed fibre mix.
• Global apparel trade is dominated by man-made fibres (MMF), where India's consumption ratio is 60:40 cotton-to-non-cotton, against a global average of 25:75.
• High real interest rates in India and delays in GST refunds affect capital availability for the sector.
• The article suggests moving factories to labor-surplus regions like Bihar to address migrant labor issues and boost female participation.
• India has achieved tariff parity with competitors through agreements like UK-CETA and EU-FTA.
• An ecosystem approach, integrating scale, infrastructure, finance, skills, and market access, is crucial for competitiveness.

Key Concepts Involved:

• Global Value Chains: The full range of activities required to bring a product or service from conception to end-use.
• Inverted Duty Structure: A situation where import duties on finished goods are lower than on raw materials, disadvantaging domestic manufacturing.
• Export Processing Zones (EPZs): Designated areas offering incentives and a simplified regulatory environment to promote exports.
• Free Trade Agreements (FTAs): Pacts between two or more countries to reduce barriers to trade and investment.