Textile industry is the second largest provider of emoloyment after agriculture. India is the second largest producer of textiles after China. It contributes 14% of industrial production, 4% of GDP and 13% of export earning. But there are some chronic problems associated with textile industry.
- It is largely an unorganised sector. Its highly fragmented nature does not allow to realise the full economic value of the sector.
- In some parts , still old age technology is used. Infrastructure is also not adequate.
- Labor laws also do not allow to form a mid size firm. The growth of a firm is an issue. This issue is called problem of missing middle.
- India’s competitor are coming in the market like Bangladesh and Vietnam.
- Global slowdown and protectionist tendencies have slower the demand.
- There is inverted duty structure In the textile sector. Raw material import is costlier than final product import.
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