Re fall not to boost exports

A study done by the textiles consulting firm KSA Technopak shows how India’s competitiveness is slipping badly in the apparels and textiles sector. The broad findings of the KSA Technopak study, however, apply to most of India’s exports, as the same levels of inefficiencies exist in other sectors too. When comparing the productivity of Indian labour with that of Bangladesh for major apparel groups, the consultants found that Bangladeshi labour was roughly 40 per cent more productive. US producers, of course, were roughly twice as productive as those in India. In the textiles sector, KSA Technopak found that Indian companies used roughly 40 per cent more labour to begin with and had a 15 per cent higher capital cost as most Indian units weren’t confident of running their machines at the speeds they are run in the US. Since less is spent on maintenance, down-time is around 24 per cent higher.

While several such comparisons have been made for Indian labour productivity before, what makes this study different is that it has been done for the top-of-the-line Indian units. So, in the textiles sector, KSA Technopak is comparing a top Indian producer with the same machinery as a unit in the US. Similarly, in the apparel sector, modern production units in India are being benchmarked with similar units in the US, or Bangladesh. What has also hit Indian exports of textiles and apparel is the formation of North American Free Trade Area (NAFTA), and the benefit that countries like Mexico have gained from this.