In his Independence Day address from the Red Fort’s ramparts, Prime Minister Narendra Modi placed “manufacturing power” as the first among the seven Saptadhara streams that are to take India towards a Viksit Bharat. He also said this effort would fully harness the potential of India’s youth. The pertinent question is, which manufacturing sector can actually deliver jobs at the scale India needs?
Our research at ICRIER points to the textiles and apparel (T&A) sector. But first, why is creating jobs urgent? India’s growth story will have little meaning if it fails to create jobs for the masses, and that too in the formal sector. India had 61.6 crore employed persons aged more than 15 years (2025), but agriculture still accounted for 43 per cent of employment, compared with 12.1 per cent in manufacturing (PLFS 2025). Even a 1 percentage point shift in employment from agriculture to manufacturing would involve moving a large number of workers. The NDA had promised to create 2 crore jobs every year, but reality is nowhere near that. The recent student agitations over paper leaks reflected an underlying frustration: Even after acquiring a “three Rs” education, respectable jobs in the formal sector remain scarce. Unemployment among those aged 15-29 was 9.9 per cent, rising to 13.6 per cent in urban areas, while 25 per cent were neither in employment nor in education or training (PLFS 2025). Female labour force participation was 40 per cent, compared with 79.1 per cent for men.
A large share of India’s workforce remains in informal employment, without the stability and social protection of formal jobs. The PLFS usual-status measure includes people who worked for a long part of the year as well as those who undertook economic activity for at least 30 days during the year. Being counted as “employed” does not necessarily mean having a regular/formal job. For workers to build economic security and resilience, the shift must therefore be towards regular, formal employment with social-security benefits like Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI). This is where the apparel sector matters. It is labour-intensive, employs women in large numbers and can train workers in short periods, about 60 days for specific production roles.
India has set an ambitious target of $100 billion in T&A exports by 2030 (from $36 billion today). Of this, $40 billion is for apparel exports specifically (from $15.7 billion today). But our interactions with exporters suggest that these targets are not grounded in current realities. They are more likely to be achieved by 2035, not 2030.
One good thing is that India has recently closed the tariff gaps with competitors like Bangladesh and Vietnam in major markets like the EU and the UK. But market access alone does not ensure exports. Take the example of the India-Japan agreement (2011). India’s apparel exports to Japan fell from $229 million in 2013 to $203 million in 2024. We need the scale and capacity to tap the potential of free trade agreements. The solution is not more factories, but creating a competitive ecosystem around them.
Tiruppur, an organically grown knitwear cluster, is perhaps the most compelling example. Its knitwear exports rose from $3.3 billion in 2020-21 to $5.3 billion in 2024-25 (TEA, 2026). The cluster accounts for about 68 per cent of India’s knitwear exports and supports the livelihoods of more than a million workers, around 70 per cent of them being women. Within roughly 20 km, yarn, knitting, dyeing, printing, stitching, finishing, packaging and dispatch are woven into one production ecosystem. Nearly 20,000 units operate across different stages, from knitting, dyeing and printing to garmenting and ancillary activities. This is the ecosystem effect where firms specialise, workers specialise, and thousands of jobs are created around a common market.
So how did Tiruppur do it? Over decades, entrepreneurs, industry associations and government built the institutions and common infrastructure that enabled this ecosystem to grow. The Tiruppur Exporters Association, under the leadership of A Sakthivel, and the South India Hosiery Manufacturers Association played an important role in building collective capabilities, while infrastructure such as the Netaji Apparel Park supported its expansion. The cluster’s collective strength was evident in tackling the environmental crisis. After the Madras High Court’s 2011 order on units failing to meet zero-liquid-discharge (ZLD) norms, the cluster invested more than Rs 850 crore in common effluent-treatment infrastructure. Tiruppur also shows what it takes to create the next 1 million jobs. The cluster depends heavily on migrant workers from Odisha, Jharkhand, Bihar and elsewhere, making worker housing and retention important challenges. The cluster plans to foray into man-made fibres, technical textiles and high-value sustainable manufacturing to expand both exports and employment.
But Tiruppur alone cannot help achieve the target of $100 billion in T&A exports by 2030. India needs many more such clusters. Some policy steps in this direction were taken by the government in 2021 in the form of announcing seven PM MITRA parks. But till date, only one such park seems operational (the Warangal one). Others are still in the planning stages. Such a snail’s pace in the execution of even good ideas does not inspire confidence that India can achieve its target of $100 billion exports by 2030. That would also limit the speed at which jobs can be created.
Our humble submission is that the Prime Minister needs to give special attention to this sector if India is to create 20 million meaningful jobs every year. Chip-making, AI and other advanced technologies are important for India’s future, but they are for the highly skilled workforce, while the majority of India’s labour force is at the bottom end. The T&A sector offers higher employment intensity at relatively low cost. China, Bangladesh, and Vietnam have followed that path, and India needs to learn from them.
The real test of Viksit Bharat is whether it can create enough productive jobs. T&A offers a clear opportunity. But it needs the PM’s focus to expedite its execution.
Gulati is distinguished professor and Rao is senior fellow at ICRIER. Views are personal
A large share of India’s workforce remains in informal employment, without the stability and social protection of formal jobs. (Illustration: C R Sasikumar) 
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