India’s textile sector is the second biggest employer in India after the agriculture industry. However, the industry is staring at a steep slump without any effective action plan in place, which is propelling it further into collapse.

A leading daily had carried an advertisement by Northern India Textile Mills Association (NITMA). It was titled ‘Indian Spinning Industry Facing Biggest Crisis, Resulting in Huge Job Losses’.

This is one of the rare occurrences when an industry body had resorted to newspaper appeals to draw the attention of the government towards their current state.

NITMA has called this the biggest crisis ever, the kind of which was last seen during 2010-11. During that year, India’s cotton output had dipped to 332.25 lakh bales.

The association cited data from Directorate General of Commercial Intelligence and Statistics (DGCI&S), saying there has been a 34.6 per cent drop in the export of cotton yarn value in 2019 (April-June) as compared to the 2018 value for the same period.

The Indian Express

The association has cited state and central taxes, high interest rates, high cost of raw materials as compared to global prices resulting in a loss of Rs 20-25 per kilogramme to Indian mills among factors affecting the industry.

The body has also outlined cheaper imports of garments and yarn from Bangladesh, Sri Lanka and Indonesia due to their lower cost of raw materials as compared to India among the reasons for the slump in the industry.

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“The Indian textile industry employing over 100 million people directly and indirectly hereby seeks immediate attention of the Government of India to prevent job losses and avoid the spinning industry from becoming Non-Performing Asset (NPA),” the advertisement said.

The advertisement states that one-third of India’s spinning capacity has been closed and those still running are incurring huge losses.

Insufficient rainfall has led to a dip in India’s cotton production by 7 per cent. The body noted that 1 per cent rise in China’s cotton production would make India lose its status as the world’s largest cotton producer.

India is facing an acute economic slowdown

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Former Reserve Bank of India Governor Raghuram Rajan recently issued a warning alert for Modi government on economy. He said the economic slowdown in India is "very worrisome" and called for a fresh look at the way GDP is being calculated.

India's economic growth has slowed to 6.8% in 2018-19 — the slowest pace since 2014-15.

Among other industries, India’s automobile sector is staring at an acute crisis.

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Mirroring the weak consumer sentiment and slowdown in the sector, S&P BSE auto sector index has fallen 35 per cent during the last one year, with home-grown Tata Motors falling 55 per cent in the same period.

Since July 2018, sales in auto sector have dropped in 12 out of 13 months reflecting sharp slowdown in demand in the world's fourth-largest automobile market.