{"id":40793,"date":"2024-05-05T05:46:20","date_gmt":"2024-05-05T00:16:20","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=40793"},"modified":"2025-04-25T06:27:46","modified_gmt":"2025-04-25T00:57:46","slug":"how-are-the-key-labour-intensive-sectors-performing-in-india","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/how-are-the-key-labour-intensive-sectors-performing-in-india\/","title":{"rendered":"How are the Key Labour-Intensive Sectors Performing in India?"},"content":{"rendered":"<h2><strong>What\u2019s in today\u2019s article?<\/strong><\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>What are Labour Intensive Sectors?<\/li>\n<li>India\u2019s Exports from Textile Sector<\/li>\n<li>India\u2019s Exports from Gems and Jewellery Sector<\/li>\n<li>What Challenges Lie Ahead for India&#8217;s Labour-Intensive Sector Exports?<\/li>\n<\/ul>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>While India\u2019s exports have been largely flat, the country\u2019s exports from labour intensive sectors such as <strong>textiles, leather, gems and jewellery and marine products <\/strong>are seeing a sharp dip.<\/li>\n<li>India\u2019s shipments from these four high jobs generating sectors have <strong>declined nearly 12% <\/strong>compared to the pre-pandemic levels five years ago (FY18).<\/li>\n<li>This is due to an <strong>overall weakness in demand from developed nations<\/strong> and s<strong>tiff competition<\/strong> from Vietnam and Bangladesh.<\/li>\n<\/ul>\n<h2><strong>What are Labour Intensive Sectors?<\/strong><\/h2>\n<p><img decoding=\"async\" src=\"https:\/\/vajiram-prod.s3.ap-south-1.amazonaws.com\/Advantages_Disadvantages_1d59a5dcd3.webp\" alt=\"Advantages-Disadvantages\" \/><\/p>\n<ul>\n<li><strong>Labour Intensive means<\/strong> the production activity that requires a large amount of labour to manufacture the product or services and therefore has <strong>a higher proportion of labour input than capital input.<\/strong><\/li>\n<li><strong>Most developing economies are labour-intensive<\/strong> as it costs less as compared to the cost of machines and drives their growth.<\/li>\n<li>From a strategic point of view, even <strong>developed economies sometimes believe in outsourcing<\/strong> to developing economies to benefit from <strong>lower production cost.<\/strong><\/li>\n<li><strong>Labour costs are considered variable<\/strong>, while capital costs are considered fixed.\n<ul>\n<li><strong>Because labour costs can be adjusted<\/strong> during market downturns through layoffs or reductions in benefits, labour-intensive industries have some <strong>flexibility <\/strong>in controlling their expenses.<\/li>\n<\/ul>\n<\/li>\n<li>These sectors collectively contribute to about <strong>one-third of the global trade<\/strong>, amounting to over $ 7 trillion.<\/li>\n<li>While <strong>India&#8217;s current market share<\/strong> in these sectors stands at a mere 1%, India&#8217;s imports of these goods are substantial, hovering around $ 100-120 billion.<\/li>\n<li>During the last financial year (FY 2023-24), when overall goods exports shrank 3%, the outbound shipments of textiles, leather, gems and jewellery and marine products saw a much steeper 9% decline.\n<ul>\n<li>This results in a <strong>$78 billion exports from these key sectors as against $86.32 billion in FY 2022-23<\/strong>.<\/li>\n<li>The comparable number in FY18 and FY19 stood at $90 billion and $88.14 billion respectively, as per commerce and industry ministry data.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>India\u2019s Exports from Textile Sector<\/strong><\/h2>\n<ul>\n<li><strong>India\u2019s textile and garments exports:<\/strong> During the last seven years, these have remained flat at around $35 billion.\n<ul>\n<li>Struggling to stay afloat in tough times, <strong>small and medium-scale textile industry in India is forced to shut down<\/strong> or let go of artisans, weavers, and workers whose livelihoods depend on the vitality of the textile trade.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Comparing with Other Countries:<\/strong>\n<ul>\n<li>According to the Federation of Indian Export Organisation (FIEO), the global trade in knitted garments expanded by 6% (over the last five years) at a time when India\u2019s exports in the segment declined.<\/li>\n<li>According to the Global Trade and Research Initiative (GTRI), <strong>China <\/strong>exported $114 billion worth of garments in 2023, followed by the EU ($94.4 billion), Vietnam ($81.6 billion), Bangladesh ($43.8 billion), and <strong>India <\/strong>(just $14.5 billion).<\/li>\n<li><strong>This shows India significantly trails behind<\/strong> China and the EU and is also falling behind smaller countries like Bangladesh and Vietnam.<\/li>\n<li><strong>Vietnam and Bangladesh<\/strong> have gained market share on the back of free trade agreements (FTAs) and least developed countries (LDC) status that amount to 10-15% concession on duty.<\/li>\n<\/ul>\n<\/li>\n<li><strong>What are the Steps Taken by the Indian Government?<\/strong>\n<ul>\n<li><strong>Mega Investment Textiles Parks (MITRA): <\/strong>To make the industry more globally competitive, the Union government had launched the MITRA programme in <strong>2021 <\/strong>to increase investment and acquire a competitive edge over global competitors.<\/li>\n<li><strong>Remission of Duties and Taxes on Exported Products (RoDTEP):<\/strong> The scheme was extended to 18 items to support the textiles sector.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>India\u2019s Exports from Gems and Jewellery Sector<\/strong><\/h2>\n<ul>\n<li>The sector, which employs nearly 50 lakh people, saw exports declining by over 20% to $32.7 billion compared to $41.54 billion in FY18.<\/li>\n<li>Last year (in October), the gems and jewellery industry was <strong>forced to ban imports of rough diamonds<\/strong> for two months amid <strong>declining demand<\/strong> from large economies such as the US and China.<\/li>\n<li><strong>The industry is facing several global headwinds <\/strong>such as slow growth and tightening financial conditions, and heavy indebtedness that could weaken investment and \u201c<strong>trigger corporate defaults<\/strong>\u201d.<\/li>\n<li>However, <strong>the India-UAE FTA <\/strong>that came into effect in May 2022 has helped gems and jewellery exports to the UAE.\n<ul>\n<li><strong>For example,<\/strong> India\u2019s gems and jewellery exports have surged nearly 40% to $8.04 billion in FY24 compared to the previous financial year after India-UAE FTA came into effect in May 2022.<\/li>\n<\/ul>\n<\/li>\n<li>Exports are also expected to pick up after I<strong>ndia concludes its FTA with the UK and EU.<\/strong><\/li>\n<\/ul>\n<h2><strong>What Challenges Lie Ahead for India&#8217;s Labour-Intensive Sector Exports?<\/strong><\/h2>\n<p><img decoding=\"async\" src=\"https:\/\/vajiram-prod.s3.ap-south-1.amazonaws.com\/Affected_areas_in_red_sea_304f1faa05.webp\" alt=\"Affected areas in red sea\" \/><\/p>\n<ul>\n<li>Exporters have warned that export goods will feel the<strong> impact of the disruptions in the Red Sea area<\/strong> during the ongoing financial year.<\/li>\n<li>The Red Sea shipping disruptions<strong> could add 0.7 percentage points to global core goods inflation <\/strong>during the first half of 2024 if the <strong>recent jump in container shipping costs <\/strong>persists.<\/li>\n<li><strong>Container shipping costs<\/strong> are two-and-a-half to three times their early December 2023 levels, prices along routes that typically go through the Suez Canal have surged nearly five-fold.<\/li>\n<\/ul>\n<hr \/>\n<h3><strong>Q.1. What is the Mega Investment Textiles Parks (MITRA) scheme?<\/strong><\/h3>\n<p>The PM MITRA scheme is Inspired by the 5F vision of &#8211; Farm to Fibre to Factory to Fashion to Foreign. It aspires to fulfil the vision of building an Aatmanirbhar Bharat and to position India strongly on the Global textiles map.<\/p>\n<h3><strong>Q.2. What is the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme?<\/strong><\/h3>\n<p>RoDTEP Scheme is a key initiative by the Government of India aimed at refunding various embedded taxes and duties on exported products.<\/p>\n<hr \/>\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/exports-from-key-labour-intensive-sectors-decline-12-compared-to-pre-pandemic-levels-9308326\/\" target=\"_blank\" rel=\"nofollow noopener\"><u>Exports from key labour intensive sectors decline 12% compared to pre-pandemic levels<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s shipments from key labour-intensive sectors have declined nearly 12% compared to the pre-pandemic levels five years ago.<\/p>\n","protected":false},"author":5,"featured_media":40794,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-40793","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/40793","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=40793"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/40793\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/40794"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=40793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=40793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=40793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}