The Hindu Business Line : `Textile industry must emulate China in labour, infrastructure'

Interwoven facts
A majority of the workforce in China consists of women in both textile and clothing units,
Enterprises are free to replace workers and change deployment depending on change of machine technology.

New Delhi , Aug 7

Hobbled by rigid labour laws, high cost of infrastructure in general with power cost and supply in particular and attendant escalating transaction costs, the Indian textile industry should take a cue from the substantial progress scored by its Chinese counterpart in all these areas.

This is the broad conclusion of an official Indian delegation that visited China recently, comprising Mr D.P. Singh, Secretary (Textiles), Mr Sudripto Roy, Joint Secretary, Ministry of Textiles, Mr K. Ramachnadran Pillai, Chairman and Managing Director of NTC, Mr A. Sakhthivel, President of Tirupur Exporters' Association, and two representatives from industry and industry bodies.

Government sources told Business Line that the aim of the visit was to study the working of the textile and clothing (T&C) industries of China to assess the state of the industry, including the machinery segments, and to study the infrastructure development, particularly in major production centres.

The team stated that China's strength in the textile and clothing sector was more in high-volume products for mass markets, while India is strong in value-added products for niche markets.

Hence, there are more avenues for co-operation than conflict between the T&C industries of the two countries.

The sources said that while officials said that workers worked three shifts of eight hours each and were recruited on three- to five-year contracts, they evinced "a discernible reluctance" to discuss issues pertaining to workers.

But inquisitive enquiries by the delegation with the odd employee who could speak English and others revealed that in most factories the shift ran for 12 hours and that the services of the workers could be terminated at any time without assigning any reason or giving any notice.

A majority of the workforce consists of women in both textile and clothing units, and wage rates range from 600 to 1,000 renminbi a month. Enterprises are free to replace workers and change deployment depending on change of machine technology.

On policy support for textile industry, widely touted to be the reason behind the low-cost success of China in overseas markets, the delegation found that while the textile industry was earlier under the encouraged/promoted category, it is now being considered in restricted category.

The official version has it that there is now no special policy support for the industry per se, but some assistance is extended in the special economic zones by way of preferential policy and banking support.

Refund of taxes incurred on inputs for exports is permitted, while the future focus of the Government is on fostering brands and value addition through design and creativity.

There is no Customs duty for import of textile machinery, except in the case of some spinning machines.

Most of the State-managed enterprises are gradually being privatised, with large groups being listed in stock exchanges. The enterprises are preparing themselves to be market-oriented and adjust investment and production levels on demand-supply equations.

Stating that textile units in China have pursued a policy of large-sized operations, the sources said that one of the textile enterprises has the highest spinning capacity in the world, with over five million spindles in one location.

Renewal programmes for all the old mills for replacing outdated machines abound in China, with Government representatives highlighting the famous spindle modernisation programme launched a few years ago, when 10 million spindles were scrapped and about 1.2 million workers laid off.

The sources said that the Indian team saw a tendency for vertical integration by completing the entire value chain within each group in order to enable quick response to competitive pressure.

The Chinese textile industry is looking for participation in the upmarket fashion segment, while continuing its hold on the low-priced mass production slot.

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