April 26, 2004 ☼ Economy

Businessweek reports that India’s textile industry has already invested more than $700m in readiness for 2005, when global textile quotas expire. The industry expects to invest another $2.5 billion by 2005 to expand capacity in order to take India’s exports to more than $13.5 billion it earned last year. The article points to two factors that can yet make India a serious competitor to China in textiles - it is not only the largest producer of yarn (quite obviously, no pun intended) but also has expertise in the top end of the business - in garments and furnishings.

With Indian talent making a mark in the international fashion industry (read expensive designer wear), the textile industry is poised for a strong comeback.

As usual, government policy has been lagging entrepreneurship and market trends.

In the meantime, there’s a lot the Indian government could do to give the industry a boost. A national road-building project is under way, but India’s highways and ports are still decrepit when compared with China’s. Improving them would help make land transport and shipping easier. And the industry needs more foreign investment, says Premal Udani, senior vice-chairman of the apparel council. Many manufacturers still feel the government could do more, especially with labor laws: Layoffs are illegal at factories that employ more than 100 workers, and labor unions can organize strikes with ease. With a little help from New Delhi, “we can be as competitive, if not more competitive, than China,” says Welspun’s Mandawewala. That would mark a real return to the glory days of a century ago. [Businessweek]

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