*****Textile in trouble | Business Standard Editorials

Clipped from: https://www.business-standard.com/article/opinion/textile-in-trouble-122051001644_1.html

Govt must revisit the GM policy

Relentless spikes in prices of cotton in both international and domestic markets over the past few months have pushed the Indian textile sector into the doldrums. Many yarn producers, power looms, hosiery units, garment makers, and exporters have been forced to either suspend or freeze production, rendering thousands of workers jobless. The exports of garments and allied products, which had grown by nearly 70 per cent in FY22 to touch $40 billion, have come under strain, having been turned price-uncompetitive. According to the industry, many export orders, which had to be renegotiated in view of the changed cost calculations, have been annulled by the importers or diverted to India’s rivals such as Bangladesh, Vietnam, China, and Pakistan.

Although the government has sought to bail the industry out by waiving the import duty on cotton, it has not helped much. The global market has firmed up further, ruling out substantial fresh imports to rein in domestic prices, which are currently around double their last year’s level. The shortfall in global production, coupled with a spurt in demand after the waning of Covid-19 pandemic, has tightened the supplies, pushing up the prices to new highs. The latest indication of the unabated crisis in the Indian textile sector is the announcement of a two-day strike from May 16 by the garment industry in Tirupur, hailed as the apparel capital of South India, to protest against the exorbitant raw material cost.

The root cause of the textile sector’s woes is the failure of cotton output to keep pace with growth in demand for garments and other textile products in the local and export markets. Though the cotton acreage has steadily been expanding, thanks largely to remunerative returns to growers, overall production has remained below par because of a drop in crop yields. According to Cotton Corporation of India, the country’s average cotton productivity, which had risen to over 550 kg a hectare in the mid-2010s, has now plummeted to less than 470 kg. This is far below the global mean output of around 800 kg a hectare. Cotton scientists attribute this decline to the want of new crop improvement technology, especially high-yielding and pest-resistant hybrids, due largely to the government’s misguided policies concerning genetically modified (GM) crops.

India’s cotton revolution, which was triggered and sustained largely by the use of transgenic BT-cotton hybrids, introduced in 2002-03, lost steam soon after the imposition of the ill-advised ban on the development of new GM crops. This, along with the equally imprudent move to control the prices of BT-cotton seeds, forced the multinational seed technology companies, which had maintained the inflow of new BT-hybrids, to wind up their operations in India. Many of the old BT-cotton hybrids have, by now, outlived their prime productive life and need to be replaced with the new ones that are not forthcoming. Meanwhile, most other cotton-producing countries have gone several generations ahead in cotton seed technology. The government, therefore, needs to revisit its GM policy, apart from taking other short-term remedial measures, if it intends to revitalise the cotton sector. Unless the indigenous productivity and production of cotton improve, the availability of this much-sought-after natural fibre would continue to be under strain to the detriment of the labour-intensive textile industry.

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