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Indian textile industry boom

The nascent boom in the textiles sector - which already employs around 35 million Indians, accounts for 4 percent of the Indian economy, and generates $14 billion in export revenue - has raised hopes for sustained job creation. Shankarsinh Vaghela, India`s textile minister, thinks as many as 12 million jobs could be created by the textiles sector over the next few years.

Some 1,600 jobs were created when a new factory at Peenya, India opened earlier this year. Gokaldas Exports has poured some $9 million into a number of new plants, and the firm now employs nearly 39,000 - a 50 percent rise since June 2004. A handful of other big Indian textile firms are following suit, building new factories to service burgeoning demand from US and Europe. Firms like Gap and Wal-Mart want to diversify their source base away from China to avoid placing too many eggs in one basket, which should benefit India.

For many economists, new factories like this typify the low-end, labor- intensive manufacturing growth India needs if it is to better the lives of its 390 million low-skilled, impoverished citizens - those who still live on less than a dollar a day and who have been largely bypassed by India`s high-end job growth. The Indian government has penciled in a target of $50 billion in textile exports by 2010, more than three times today`s level.