India’s new Textiles Minister is pretty ambitious. But those
ambitions would be a lot more credible with a bit more realism.
Or do we mean honest thinking?
India, viewed from a worldwide perspective, has been the great
disappointment among the countries that could have prospered from the collapse
of quotas on European and North American apparel importing in 2005. Instead it’s
been about the most sluggish performers in Asia when it comes to garment
exporting. China exports about ten times as many garments to Europe, the US and Japan as India, whose garment
exports are less than Vietnam’s or Bangladesh’s, only a bit bigger than Indonesia’s
and just 50% greater than Cambodia’s. Cambodia is about a twentieth India’s
size.
The country’s new Textile Minster, K.S. Rao, thinks he can
change that. He’s said he wants to see garment and textile exports up to $50 bn
in the 2013-14 fiscal year, from the $30 bn they managed in 2012-13.
His priority, he says, are handloom weavers. Because “the artisans must
be taken care of”
Well, maybe: but he’s
not going to increase exports by 66% (or even 0.66%) by prioritising handloom
weavers. Those “artisans must be taken care of” because they represent a lot of
votes: but it’s not votes India’s soaring trade deficit needs, it’s a healthy
spurt in India’s exports of fabric and garments. And they include next to
nothing handloom weavers make.
He’s actually got other targets in his sights: “red-tapism”,
which seems to be holding new factory sites up, what he says is a perverse policy
by the country’s finance ministry to make textile and garment businesses borrow
at 12-14% when other industries are borrowing at 7% and delays in implementing
the country’s Textile Upgradation Fund Scheme (TUFS) which he believes has been
approved but has to still come into effect.
There’s a lot more than just that to India’s weal performance
in global garment markets, and personally I think Rao’s $50 bn target is hopelessly
unrealistic. But if he’s going to lift India’s game, much of his thinking is
fine.
Though I wouldn’t bank on handloom works to kick in much of
that $20 bn export growth he’s gambling with his career on
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