A blueprint to create productive jobs, a lesson from Tiruppur

In Prime Minister Narendra Modi's Independence Day address, "manufacturing power" was highlighted as the first of seven essential elements to propel India towards a Viksit Bharat (Developed India). This strategy aims to fully utilize the potential of India's youthful population to create jobs, especially in the textile and apparel sector (T&A).

Given that India needs to generate a significant number of jobs, particularly in the formal sector, the urgency of boosting the T&A sector becomes apparent. Despite a substantial increase in employment, agriculture still employs 43% of the workforce, while manufacturing contributes only 12.1%. A shift of just 1 percentage point from agriculture to manufacturing could potentially incorporate a large number of workers.

The Indian government had promised to generate 2 million jobs annually, but progress is far from this target. In the PLFS survey for 2025, unemployment among those aged 15-29 was 9.9%, rising to 13.6% in urban areas, while 25% were neither in employment, education, nor training. Female labor force participation was 40%, in contrast to 79.1% for men.

The majority of India's workforce remains in informal employment, lacking the stability and social security that formal jobs offer. The apparel sector stands out as a potential solution due to its labor-intensive nature, significant female employment, and relatively short training periods (around 60 days). India aims to achieve $100 billion in T&A exports by 2030, with $40 billion earmarked specifically for apparel exports.

However, current forecasts suggest that these aspirations may not be realized until 2035. While recent tariff reductions with competitors like Bangladesh and Vietnam in major markets like the EU and UK are positive, market access alone is insufficient for exports. The India-Japan agreement (2011) serves as an example, where apparel exports dropped from $229 million in 2013 to $203 million in 2024.

The key to unlocking the potential of free trade agreements lies in creating a competitive ecosystem around them. Tiruppur, a knitwear cluster in India, exemplifies this approach. Its exports have surged from $3.3 billion in 2020-21 to $5.3 billion in 2024-25, accounting for approximately 68% of India's knitwear exports and supporting over a million workers, with around 70% being women.

With an export value of $5.3 billion in 2024-25, Tiruppur demonstrates the power of a specialized ecosystem, where various stages of production—from yarn to garmenting—operate in close proximity. The success of Tiruppur can be attributed to decades of collaboration between entrepreneurs, industry associations, and the government to establish the necessary infrastructure and collective capabilities.

The Tiruppur Exporters Association and the South India Hosiery Manufacturers Association have played crucial roles in fostering this ecosystem. Moreover, the cluster addressed critical environmental challenges by investing over Rs 850 crore in common effluent-treatment infrastructure following court orders. Tiruppur's collective strength is evident in its ability to tackle environmental issues while simultaneously driving job creation.

However, Tiruppur's success story cannot single-handedly propel India towards its $100 billion T&A export target by 2030. The government's initiative to establish seven PM MITRA parks is a step in the right direction, but the pace of implementation has been sluggish, with only one park operational so far. This delay in executing even promising ideas undermines the confidence that India can achieve its ambitious export goals.

It is imperative for the Prime Minister to prioritize the T&A sector if India is to create 20 million jobs annually. Although advanced technologies like chip-making and AI are vital for India's future, the bulk of the workforce is unskilled. The T&A sector offers a more accessible pathway for employment generation and economic stability.

While China, Bangladesh, and Vietnam are formidable competitors, India possesses the unique advantage of a large, skilled labor force that can thrive in the T&A sector.