While India's textile exports continue to be on a high growth trajectory, growing at 18% in the first two months of the current fiscal over last fiscal's base of $17 billion, there has been a major setback to the industry's future plans as a move by the Centre to implement a set of flexible labour laws for the industry has been thwarted by the labour unions.

Flexible labour laws are considered imperative for achieving the much-vaunted goal of the National Textile Policy to augment India's textile exports to $50 billion by 2010.

The textile and garment industry being labour-intensive, the present regime of rigid labour laws are considered a big drawback as high labour cost could prove a big disadvantage for the industry in the face of tough global competition in an open global market.

The industry has also been facing many other disadvantages like higher costs on power, entry tax, electricity duty, Octroi etc which are not refunded under any scheme.
 
On its part, the industry has been lobbying for flexibility in labour laws so as to facilitate hiring contractual labour, longer daily and weekly duty hours, various government benefits as provided to seasonal industries and its recognition as a public utility service.

However, the labour unions have been opposing these demands tooth and nail. At a July third week meeting to discuss flexible labour laws for the industry -- which was attended by representatives of the Centre, state governments, textile industry and labour unions -- the unions said the textile and clothing industry doesn't qualify as a seasonal industry and flexibility in hiring contractual labour was not called for.

Expectedly, they also opposed the proposal to increase duty hours on the ground that it will have a deleterious effect on the health of workers. And with the Left parties calling the shot in UPA Government's policy making, it is unlikely that the Centre would take any step at the risk of drawing the wrath of its alliance partners.

This could be bad news for an industry, which is growing at nearly 26%. India's total textile exports stood at $17 billion in 2005-06. In 2005, the country exported $6 billion worth of garments, contributing to 7.6% of the total merchandise exports.

Readymade garments exports from India are expected to touch $14.5 billion (Rs 70,000 crore) by 2009-2010 with a cumulative annual growth of 18% to 20%. The US, India's single largest export destination for apparels, accounts for 30.5% of total apparel exports.

India largely exports cotton apparels, which represent more than three fourths of total apparel exports of the country. It is followed by readymade garments of manmade fibres, which account for 11.6% of the total apparel exports. Other types of apparel made from wool, silk, and other textile material account for the remaining exports.