SIZE $120 billion CONTRIBUTION TO GDP 4% TOTAL JOBS 49 million CHALLENGES
We have a lot of catching up to do with China, which is the leader in textiles. Exports of textile products from China are to the tune of $280 billion, compared to $40 billion from India—yarn, cotton and fabric included. China’s competitive framework has been developed by its foreign exchange rate, productivity, cost of labour, utility costs and costs of raw materials, among others.
While the rupee has appreciated from 68 per dollar to 63 per dollar, China has been depreciating the yuan. China has also incentivised production and has a huge productive workforce.
There have been issues with GST paid up front before exports, but the government is addressing that issue.
Some units would have been affected by GST—it involves migration from a non-compliant to a compliant model. When you have to become part of an honest system, some churn is inevitable.
WHAT NEEDS TO BE DONE
Maintain a healthy exchange rate beneficial for exporters.
Sign a free trade agreement with the European Union (EU), as Bangladesh has done, thus getting preferential treatment and tax benefits for textile exports to the EU.
Fixed term contracts have been allowed, which provides flexibility to increase or decrease the workforce depending on work.
Sanjay Lalbhai Chairman, Arvind Limited