ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Industrial Disputes in the Indian Textile Industry

An econometric analysis has been done to identify the causes of occurrences of disputes, strikes, and lockouts in the Indian textile industry. The relative shares of strikes and lockouts in the pre- and post-liberalisation periods for both the public and the private sectors have been assessed and analysed. The incidence and impact of these disputes have also been explored, revealing significant details about the changes in the relationship of disputes, strikes, and lockouts with their determinants in the textile industry.

The textile industry is one of the oldest industries in India with a significant contribution towards the economy’s growth. At the time of independence, cotton textiles of Bombay and Ahmedabad and jute textiles of Calcutta contributed roughly two-thirds of the value added and employment in the manufacturing sector (Mohan 1992). Therefore, this sector was identified as one of the critical sectors that needed protection and encouragement, and thus the Cotton Textile (Control) Order was introduced in 1948 (Kar 2015). On the one hand, the policy of the government was to protect the mill sector from foreign competition, and on the other, the government also viewed the mill sector as a threat to the development of the handloom sector. Despite best efforts by the government, the handloom industry faced problems, and unemployment among the handloom weavers increased manifold. To provide a solution to the problems of the textile sector, the conversion of handlooms into semi-automatic looms and power looms was recommended (EPW 1954). However, power looms were officially introduced in the textile industry only after the recommendations of the Ashok Mehta Committee were tabled in 1964. Despite this, sickness and disputes increased significantly in the textile industry in the mid-1970s, which led to strict reservations for the handloom sector (Patnaik and Mishra 1997). With change both in the international situation and in the political leadership of India, perceptions about modernisation in the textile industry too started to change in the 1980s. The national textile policy of 1985 represented a drastic departure from the earlier policies pertaining to this sector (Soundarapandian 2002). Though this policy laid greater emphasis on modernisation and technological upgradation, which made more cloth available in the domestic market, there was no major improvement in the international competitiveness of the Indian textile industry.

With the implementation of the New Economic Policy, the government issued the Textiles (Development and Regulation) Order 1993 that delicensed this industry. A number of reforms were introduced, including liberalising the import of technology and reducing duties on the import of textile fibres, yarns, etc. The development of export zones, investment support under Technology Upgradation Fund Scheme (TUFS), and the relaxations given under the National Textile Policy of 2000 caused a change in the structure of the textile industry, as the share of the handloom sector in the production of cotton and synthetic fabrics decreased significantly, while that of the power-loom sector increased to 73% (NCAER 2009). With the end of the Multi-fiber Arrangement (MFA) in 2000 and with a series of measures undertaken to support the textile industry, such as allowing 100% foreign direct investment (FDI) in textiles, setting up of textile parks, and various tax incentives to promote research and development (R&D), this industry has emerged as one of the promising sectors as it contributes 14% to industrial production and 4% to the gross domestic product (GDP) and provides direct employment to 45 million people. It is expected that this industry will reach $141 billion by 2021 from the present $108 billion market (Corporate Catalyst India 2015).. Therefore, it is imperative to remove all the impediments to its growth.

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Updated On : 29th Apr, 2020

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