India's textile industry urgently needs to diversify beyond its traditional markets of the US and Europe to remain competitive in the wake of the global economic downturn, New Delhi warned yesterday.
Dayanidhi Maran, the minister of textiles, said the industry was highly vulnerable to its overdependence on western markets and had not sufficiently embraced new technology to maintain a competitive edge against rivals such as China, Korea and Indonesia. He described the sector, which relies heavily on state support, as “monolithic” and in need of an overhaul of its “entire production system”.
India's textile industry is a key export sector. The second largest employer after agriculture, the fragmented textiles sector numbers about 15,000 companies and employs about 50m people. Its exports, worth $20bn (€13.9bn, ￡12.5bn) a year, represent about 15 per cent of the country's total exports. Many of its companies export almost exclusively to the west. Welspun, supplier of towelling products to US retailer Walmart, exports 90 per cent of its production to the US and Europe.