Handloom- Our national heritage | Gist of Rajya Sabha TV / RSTV (now Sansad TV) - UPSC PDF Download

Introduction

In India, clothing holds a deeper significance than mere attire; it embodies our emotions, love, and loyalty, deeply rooted in traditions, heritage, and culture.

Background of the Handloom Sector

India leads in handwoven fabric exports, constituting 95% globally, making it a significant contributor to the economy. With approximately 43 lakh weavers employed, the handloom sector's growth could surpass 33% with a 5% increase in domestic consumption. National Handloom Day on August 7 commemorates the 1905 Swadeshi movement, emphasizing the revival of domestic products.

Challenges in the Indian Handloom Sector

• Market Reality: The industry faces challenges like outdated technology, inflexible labor laws, and infrastructure bottlenecks, impacting the unorganized and small players.
• Global Policies: Pressure from WTO agreements necessitates India to phase out export subsidies for handlooms by 2018, affecting existing schemes like MEIS and EPCG.
• Demand for MMF: Global demand for manmade handlooms and garments poses a hurdle due to the unavailability of competitively priced manmade fibers.
• Free-Trade Pacts: Agreements like SAFTA bring intense competition from countries like Bangladesh, enjoying zero-duty access to the Indian market.
• Impact of Reforms: Recent reforms, including demonetization, GST implementation, and bank restructuring, led to a decline in India's handloom exports, slipping to the fifth position globally.

Measures Needed:

• Shift from Export-Specific Subsidy: The government should transition from export-specific subsidies, violating WTO norms, to regional and cluster subsidies, technology upgradation, and skill development subsidies benefiting all producers.
• Fibre Neutrality: Equal tax treatment for cotton and manmade fibers is crucial for industry growth, considering the current differential tax rates of 5% for cotton and 12% for manmade fibers.
• Labor Flexibility: Enhancing labor laws' flexibility and promoting adequate skilling, including allowing women to work in all shifts with proper safeguards, can significantly boost the handloom industry.
• Technology Upgradation: Schemes supporting technology upgrades can enhance productivity and competitiveness for Indian players.
• Trade Agreements Evaluation: Careful assessment of trade agreements is essential to address challenges posed by competitors like Bangladesh and Vietnam.

Conclusion

Expanding the production base to non-traditional areas, coupled with addressing challenges through strategic measures, is imperative to ensure the sustained growth of India's handloom sector.