Thermal Crisis in India’s Textile Surge

After Reading This Article You Can Solve This UPSC Mains Model Questions:

Climate change is emerging as a structural constraint on labor-intensive industries in India. Examine this statement in the context of the India’s textile industry. 15 Marks (GS-3, Economy)

Introduction

• India’s textile sector is witnessing a historic surge in global orders as buyers shift from politically unstable hubs such as Bangladesh, making the country a preferred manufacturing destination under the Make in India initiative.
• Yet this boom is now colliding with a harsh biological and mechanical reality: extreme heat stress that is quietly crippling worker productivity, factory output, and long-term industrial competitiveness.

Overview of India’s Textile Industry

The textile sector is a cornerstone of the Indian economy, acting as a bridge between agriculture and industrialization. Its scale and reach are reflected in the following data points:

• Economic Contribution and GDP Share: The industry contributes approximately 2.3% to India’s GDP, accounts for 13% of total industrial production, and contributes 12% to the national export basket.
  • In the 2023-24 fiscal year, India exported textile items worth $34.4 billion, with apparel constituting 42% of the export basket.
• Global Standing and Production Capacity: India is currently the world’s 6th largest exporter of textiles and apparel and the 2nd largest producer and consumer of cottonand silk globally.
  • The country is unique in producing all four commercial varieties of silk Mulberry, Tasar, Muga, and Eri—producing a total of 38,913 MT in 2023-24.
• Employment and Market Scale: It is the second-largest employment generator after agriculture, providing direct livelihoods to over 45 million people, including many women and the rural population.
  • The market size is projected to reach $350 billion by 2030, a significant leap from the current $174 billion.
• Role of MSMEs: Nearly 80% of the industry’s capacity is spread across Micro, Small, and Medium Enterprises (MSME) clusters, emphasizing the inclusive nature of the sector.
• Global Showcasing: Events like Bharat Tex 2024 underlined India’s ambition, attracting over 1,20,000 visitors from 120+ countries and showcasing the entire value chain from farm to fashion.

Importance of the India’s Textile Industry

The textile industry is not merely a commercial entity but a vital tool for socio-economic transformation in India:

• Employment Engine: The textile industry serves as a powerful engine for inclusive growth, generating massive employment for rural youth, women, and MSMEs while driving foreign exchange earnings and regional development in states like Tamil Nadu, Karnataka, Maharashtra, and Gujarat.
• Export Earnings and Foreign Exchange: Contributes significantly to India’s export basket, strengthening the external sector.
• Inclusive Growth through MSMEs: The dominance of MSMEs ensures regional spread of industrialisation and balanced development.
• Linkages with Agriculture: Supports farmers engaged in cotton, silk, and jute production, ensuring income diversification.
• Strategic Role in Global Supply Chains: India is emerging as a reliable alternative manufacturing hub, enhancing its geopolitical and economic importance.
• Alignment with National Missions: The sector is perfectly aligned with the “Make in India,” “Skill India,” and “Atal Innovation” missions, serving as a laboratory for domestic manufacturing excellence.

Challenges Faced by the India’s Textile Industry

Despite the growth, a “mechanical and biological reality” is crippling industrial heartlands. The surge in orders from global buyers shifting away from unstable hubs like Bangladesh is hitting a wall of extreme heat.

1. Heat Stress and Productivity Loss

• Extreme heat is leading to a biological slowdown in human labour capacity, directly affecting productivity and efficiency.
• Scientific evidence shows that at temperatures of 33–34°C, worker productivity declines by nearly 50%, as the human body reduces physical effort to prevent overheating.
• In many textile units, indoor temperatures frequently exceed 35–40°C, which is far above safe and permissible working conditions.
• India has already suffered massive losses:
  • Around 259 billion labour hours annually (2001–2020) due to heat stress.
  • This translates into an economic loss of nearly $600 billion per year.
• Future projections indicate that by 2030, India may lose 5.8% of total working hours, which is equivalent to 34 million full-time jobs, highlighting the scale of the crisis.

2. Impact on Workers (Human Cost)

• Workers bear the direct and disproportionate burden of heat stress, especially those in informal and low-income segments.
• They experience:
  • Loss of wages due to reduced work capacity, as productivity declines in extreme heat.
  • Absence of cooling breaks, paid sick leave or social security, making them highly vulnerable.
• Health risks are severe and long-term, including:
  • Heatstroke and exhaustion
  • Dehydration and fatigue
  • Kidney-related illnesses and chronic health conditions
• Heat stress effectively acts as a “regressive tax on the poor”, where economically weaker workers absorb the highest costs of climate change.

3. Industrial and Production Disruptions

• Extreme heat is not only affecting workers but also disrupting industrial operations and output levels.
• Factories report:
  • Up to 50% decline in production capacity during peak heat conditions.
  • In several cases, working hours are reduced to 4–5 hours per day due to unsafe conditions.
• Industrial machinery is also impacted:
  • Overheating of equipment leads to breakdowns
  • Frequent shutdowns and technical failures disrupt production cycles
• As a result, there is a breakdown of tight production schedules, reducing reliability in supply chains and affecting export commitments.

4. Supply Chain Pressures and Global Inequality

• Global textile supply chains are governed by strict deadlines and heavy financial penalties for delays, imposed by international brands.
• Factory owners are caught in a difficult situation:
  • Either push workers beyond safe physiological limits to meet deadlines or face financial losses due to delayed shipments.
• At the same time, global brands often:
  • Shift sourcing to other countries like Vietnam and Mexico.
  • Avoid sharing the cost of climate adaptation.
• This creates an unequal system where:
  • Risks are transferred downward to MSMEs and workers.
  • While global firms remain insulated from climate-related disruptions.

5. Climate Change as a Structural Economic Risk

• Heat stress is no longer a short-term or seasonal issue; it has become a systemic and long-term constraint on economic growth.
• It creates a “thermodynamic bottleneck”, where production is limited by human physiological capacity and environmental conditions.
• Studies indicate that there is a 2% decline in annual economic output for every 1°C rise in temperature.
• This shows that climate change is directly affecting industrial productivity, competitiveness, and long-term growth prospects.

6. Financial and Institutional Constraints

• A large part of the textile sector, especially MSMEs, faces serious financial limitations.
• Key issues include:
  • Lack of capital to invest in cooling infrastructure, ventilation systems, and heat-resistant technologies.
  • Limited bargaining power in global supply chains, restricting their ability to renegotiate contracts.
• Additionally, financial institutions do not adequately incorporate climate risks into lending and credit decisions, which limits investments in climate adaptation measures.

7. Labour and Regulatory Gaps

• Existing labour laws in India are not adequately equipped to deal with heat stress and climate-related workplace risks.
• There is a clear absence of:
  • Enforceable temperature thresholds for workplaces
  • Mandatory rest breaks and cooling provisions
  • Guaranteed access to drinking water and shaded areas
• As a result, worker safety and health are often compromised, especially in informal and unregulated units.

Major Government Initiatives for India’s Textile Modernization

The Government of India has launched several flagship schemes to modernize the textile sector in India and address its structural challenges:

• PM MITRA (Mega Integrated Textile Region and Apparel) Parks: With a budget of ₹4,445 crore, seven parks are being established to provide integrated industrial infrastructure, reducing logistics costs and increasing FDI.
• Production Linked Incentive (PLI) Scheme: An outlay of ₹10,683 crore aims to increase manufacturing in Man-Made Fibre (MMF) and technical textiles.
• Technology and Skill Development
  • ATUFS (Amended Technology Upgradation Fund Scheme): A budget of ₹17,822 crore supports capital investment in technology for MSMEs.
  • Samarth Scheme: Focuses on skill training, having already trained over 3.82 lakh beneficiaries with a 77% placement rate.
• Sector-Specific Missions
  • National Technical Textiles Mission (NTTM): A ₹1,480 crore mission to position India as a global leader in high-tech specialty fibres.
  • Kasturi Cotton Bharat: A programme focused on the branding and traceability of Indian cotton using Blockchain technology.
  • Silk Samagra and Jute-ICARE: Schemes dedicated to improving the quality and productivity of silk and jute through research and development.
• Trade Agreements: Additional measures include Rebate of State and Central Taxes and Levies (RoSCTL) rebate, 14 Free Trade Agreements (FTAs), including recent ones with the UAE and Australia, to provide duty-free market access for Indian textiles.
• Budget Push: Union Budget 2025-26 allocated ₹5,272 crore to the Ministry of Textiles (19% increase), introducing duty exemptions on shuttle-less looms, customs duty hikes on knitted fabrics to curb cheap imports, and the five-year Cotton Mission for higher productivity.

Way Forward: Transitioning to a Climate-Smart Supply Chain

To sustain long-term growth, India must shift from labour-exploitative, climate-blind production to a climate-resilient and worker-centric textile model. A systemic transformation is required:

• Recognising Heat Stress as an Economic Risk: Heat stress must be treated as a core economic and supply chain risk, and integrated into industrial policies, trade agreements, and export strategies to ensure sustainability and competitiveness.
• Mandatory Heat Action Plans: Industrial units must enforce temperature thresholds (around 30°C), cooling breaks, and flexible shifts, supported by real-time heat monitoring systems to protect worker productivity and health.
• Climate-Sensitive Financing: Banks should incorporate climate risks into lending decisions, while the government must provide subsidised credit for cooling infrastructure, water systems, and heat-resilient technologies.
• Strengthening Labour Protection Framework: Labour laws must include explicit heat stress provisions, ensuring safe working conditions, access to water, shaded rest areas, and mandatory rest breaks for workers.
• Promoting Technological Innovation: Investment should focus on wearable cooling devices, energy-efficient factory designs, and heat-resistant cotton varieties to reduce climate vulnerability.
• Ensuring Accountability of Global Brands: International buyers must adopt fair pricing and flexible delivery timelines, sharing the cost of climate adaptation to create an equitable supply chain.
• Climate-Resilient Industrial Planning: Development of green textile clusters, improved ventilation systems, and heat-resilient infrastructure is essential for sustainable industrial growth.
• Strengthening Data, Research, and Collaboration: Policymaking must rely on real-time heat data and research, with stronger collaboration between government, industry and academic institutions.

Conclusion

The Indian textile industry’s path to becoming a $350 billion economy must be paved with climate-resilient infrastructure and robust labor protections. By integrating worker welfare, technological innovation, and global responsibility into its growth strategy, the nation can secure both economic prosperity and the well-being of millions who power its textile dream.