In a recent report on emerging trends in manufacturing, the World Bank has mentioned Textiles, Garments and Leather based industries will continue to be biggest job creators in low and medium industrialised countries like India.
However, growth in export from these sectors in India has remained stunted for quite a long time, which may be a good indication of the status of these sector.
More than the resultant poor export revenue, it is playing havoc with job creation. And what is more important, these sectors will remain comparatively safe and create jobs even in the era of automation and artificial intelligence.
The world bank report cryptically titled’ Trouble in the Making?’ has cautioned that widespread use of robotics and 3 D printing will cause a disruptive change in the global manufacturing sector and the first casualty will be jobs.
This is of great concern for countries like India where the large mass of low and zero skilled youth joining the job market can only be absorbed in the manufacturing in the low technology sectors.
And here the silver lining is low skill sectors like garments and leather products will remain comparatively immune from the automation wave and continue to be job spinners.
However, with a focus to hi – tech manufacturing, the policy makers probably has put the low priority tag on the traditional industries.
The results are evident. Almost all sectors with high employment potential, which also contribute significantly in countries export basket, are in negative or near zero growth rate for a considerable period.
Commenting on the scenario, Animesh Saxena, a leading exporter of Textiles and Garments and Member of the Central Committee of FISME, mentioned that the industry today is throttled by the current business environment – starting from arbitrarily set high minimum wages to imposition of GST on exports.
While fully agreeing to the world bank report Saxena mentioned that a number of studies has brought out the high employment potential of Garments industry vis a vis capital intensive industries and its ability to absorb and skill a large number of unskilled youth.
If the Government is really interested in Growth with Employment, this sector should be immediately provided relief from the arbitrary regulations, Saxena opined.
The World Bank report also provides a prescription for the countries to survive with manufacturing and prescribed 3Cs – competence, connectivity and competitiveness as remedials.
The report shows that while India has achieved some level of competitiveness in the internal market, its connectivity or ease of trade is much lower that other developing countries, even behind Bangladesh and Pakistan.
And exactly this is being continuously advocated to the Government. The invisible barriers in the trade regime, the catch the thief approach of the revenue officials and rent seeking at every node of the import / export chain is making international trade really difficult in India.
With the added confusion created by GST and also the global protectionism has made the situation hopeless particularly for the Textiles, Garments and leather exporters, largely in the MSME sector