Context: In his Independence Day address, Prime Minister Narendra Modi identified manufacturing power as the first of the seven Saptadhara streams for achieving Viksit Bharat, with a focus on harnessing India's demographic potential.
- India's growth story needs to generate productive and formal employment at scale, particularly for its large young workforce.
- India had 61.6 crore employed persons aged above 15 years in 2025, but agriculture still accounted for 43% of employment, compared with only 12.1% in manufacturing.
- Even a 1 percentage-point shift of employment from agriculture to manufacturing would therefore involve a substantial movement of workers.
India’s Employment Challenge
- The promise of creating 2 crore jobs annually has not translated into employment generation at the expected scale.
- Unemployment among those aged 15–29 years was 9.9% in 2025, rising to 13.6% in urban areas.
- Around 25% of young people were neither employed nor in education or training, highlighting the challenge of integrating youth into productive economic activity.
- Female labour force participation was 40%, compared with 79.1% for men, indicating substantial untapped female employment potential.
- A large proportion of India's workforce remains in informal employment, which generally lacks stable employment conditions and adequate social protection.
Why Formal Employment Matters
- The Periodic Labour Force Survey (PLFS) usual-status measure counts people who worked for a substantial part of the year as well as those who undertook economic activity for at least 30 days during the year.
- Therefore, being classified as employed does not necessarily imply having a regular or formal job.
- Sustainable economic security requires a shift towards regular formal employment with social-security benefits, such as Employees' Provident Fund (EPF) and Employees' State Insurance (ESI).
- Labour-intensive manufacturing can facilitate this transition by creating large numbers of relatively accessible formal jobs.
Why Textiles and Apparel?
The Textiles and Apparel (T&A) sector has significant potential to address India's employment challenge.
- It is highly labour-intensive, making it capable of generating more jobs per unit of investment than highly automated industries.
- It has substantial potential for female employment, making it relevant for improving women's participation in the labour force.
- Workers can acquire skills for specific production roles in a relatively short period, with training potentially taking around 60 days.
- The sector can therefore absorb workers with relatively limited formal skills while enabling their transition into organised employment.
India’s T&A Export Ambition
- India has set a target of increasing T&A exports to $100 billion by 2030, from around $36 billion currently.
- Within this, the target for apparel exports is $40 billion, compared with approximately $15.7 billion currently.
- However, industry interactions suggest that the targets may be more realistically achievable by 2035 rather than 2030.
- India has recently reduced tariff disadvantages vis-à-vis competitors such as Bangladesh and Vietnam in important markets including the European Union (EU) and the United Kingdom (UK).
- However, market access alone does not guarantee export growth.
- For instance, despite the India-Japan trade agreement of 2011, India's apparel exports to Japan declined from $229 million in 2013 to $203 million in 2024.
Tiruppur - India’s Successful Textile Cluster: Tiruppur in Tamil Nadu provides an important model for creating employment through a manufacturing ecosystem.
- Tiruppur's knitwear exports increased from $3.3 billion in 2020–21 to $5.3 billion in 2024–25.
- The cluster accounts for approximately 68% of India's knitwear exports.
- It supports the livelihoods of more than one million workers, around 70% of whom are women.
- Nearly 20,000 units operate across different stages of production and ancillary activities.
- Within roughly 20 km, the cluster integrates yarn production, knitting, dyeing, printing, stitching, finishing, packaging and dispatch.
- This creates an ecosystem effect, where firms specialise in particular activities, workers develop specialised skills and numerous jobs emerge around a common market.
How Tiruppur Built Its Ecosystem
- The cluster developed over decades through the combined efforts of entrepreneurs, industry associations and government institutions.
- The Tiruppur Exporters Association (TEA) and the South India Hosiery Manufacturers Association helped develop collective capabilities and represent industry interests.
- Infrastructure such as the Netaji Apparel Park supported the expansion of the cluster.
- The cluster demonstrates that competitiveness depends not merely on individual factories but on common infrastructure, specialised suppliers, skilled workers, institutions and coordinated industry action.
Environmental Sustainability in Tiruppur
- Tiruppur's experience also demonstrates how industrial clusters can collectively address environmental challenges.
- Following a 2011 Madras High Court order concerning units that failed to meet Zero Liquid Discharge (ZLD) requirements, the cluster invested more than ₹850 crore in common effluent-treatment infrastructure.
- This illustrates the importance of common environmental infrastructure for making large industrial clusters compatible with environmental regulations.
Emerging Challenges and Opportunities
- Tiruppur relies heavily on migrant workers from Odisha, Jharkhand, Bihar and other States, making worker accommodation, retention and welfare important for future expansion.
- The cluster plans to diversify into man-made fibres, technical textiles and high-value sustainable manufacturing.
- Such diversification can simultaneously increase export competitiveness, technological capability and employment opportunities.
Need for More Tiruppur-like Clusters
- A single cluster cannot enable India to achieve its ambitious T&A export and employment objectives; the country needs multiple large-scale manufacturing ecosystems.
- The government announced seven PM Mega Integrated Textile Regions and Apparel (PM MITRA) parks in 2021 to create integrated textile manufacturing ecosystems.
- However, the slow operationalisation of these parks remains a concern, with Warangal cited as the only operational park in the article while others remain at various planning or development stages.
- Delayed implementation of integrated manufacturing infrastructure can constrain both export growth and large-scale job creation.
Why Labour-Intensive Manufacturing Matters
- Advanced sectors such as semiconductors and Artificial Intelligence (AI) are strategically important but generally require highly skilled workers and cannot alone absorb India's predominantly low- and semi-skilled labour force.
- T&A offers higher employment intensity at comparatively lower investment costs, making it particularly suitable for India's current stage of development.
- Countries such as China, Bangladesh and Vietnam have successfully used labour-intensive manufacturing and export-oriented textile industries as pathways to industrialisation and employment generation.
Way Forward
- India needs faster implementation of integrated textile parks and common infrastructure to replicate successful clusters across regions.
- Trade agreements must be complemented by improvements in scale, productivity, logistics, quality standards, skills and supply-chain integration.
- Greater attention should be given to worker housing, social security and skill development, particularly where clusters depend on migrant labour.
- Expansion into technical textiles, man-made fibres, green manufacturing and higher-value apparel can improve India's competitiveness while creating additional employment.
