Ludhiana’s textile sector urges government for FTAs

Over the past eight years, the industry has experienced significant fluctuations.

Ludhiana’s textile industry is currently facing numerous challenges and adjusting to a new phase of subdued demand. It is relying on governmental assistance for the establishment of a mega textile park and the negotiation of free trade agreements (FTAs) with developed nations.

Over the past eight years, the industry has experienced significant fluctuations. It all started with demonetisation in 2016, followed by the implementation of the goods and services tax (GST) in 2017. The Covid-19 pandemic in 2020 exacerbated the situation, and geopolitical tensions since 2022 have resulted in high inflation and recessionary patterns in Western countries, affecting demand.

Nevertheless, the path to recovery will not be straightforward. The Indian textile industry faces tough competition from various countries in the region, including China, Bangladesh, Sri Lanka, Vietnam, and even Pakistan.

The industry is eagerly awaiting the conclusion of FTAs with the United Kingdom and the European Union. India has been losing ground to competitors such as Bangladesh and Vietnam, which benefit from lower duty advantages.

The enforcement of quality control orders (QCOs) by the Centre has also raised concerns, particularly among smaller industry players. These non-tariff barriers aim to restrict the import of substandard products and enhance India’s position in the supply chain. However, some industry executives argue that QCOs should be implemented thoughtfully, after consulting with stakeholders, to avoid disrupting domestic businesses.

Businesses in Ludhiana, Punjab’s largest industrial hub, express the urgent need for improved connectivity. The closest airport is in Chandigarh, approximately 100 km away. Industry insiders also emphasise the necessity of a world-class exhibition-cum-convention centre in Ludhiana to stimulate industrial growth. The executive cited above emphasises, “These factors are vital for industrial development.”

While some of these issues require attention at the central government level, Ludhiana’s textile industry remains optimistic that the state government will consider its requests for a mega textile park and an exhibition-cum-convention centre.