A Study of India s Textile Exports and Environmental Regulations

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1 A Study of India s Textile Exports and Environmental Regulations

2 K.S. Kavi Kumar Editor A Study of India s Textile Exports and Environmental Regulations 123

3 Editor K.S. Kavi Kumar Madras School of Economics Chennai India ISBN ISBN (ebook) Library of Congress Control Number: Springer Nature Singapore Pte Ltd This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore , Singapore

4 Preface This study was undertaken by the Centre of Excellence in Environmental Economics at Madras School of Economics with financial support from the Ministry of Environment and Forests, Government of India. The study was initiated and largely coordinated by Dr. K.S. Kavi Kumar. The project team included Dr. Zareena Begum and Dr. Sukanya Das. In the initial stages of the project, Dr. S. Dinda, Dr. E. Kannan, and Dr. S. Subash have provided crucial inputs. Dr. G. Badri Narayanan of Purdue University, USA, served as consultant towards the end of the project term. Research assistance was provided by Ms. Prachi Pandey, Mr. Kalaiselvan, Mr. S. Raju, and Dr. A. Balasubramanian at different stages of the work. Ms. Saraswathi and Ms. Geetha provided secretarial help. The book was written jointly by Dr. K.S. Kavi Kumar, Dr. Zareena Begum, Dr. Sukanya Das, Dr. Elumalai Kannan, and Dr. G. Badri Narayanan. While the analysis presented in the core chapters pertains to the year 2012, the data and discussion was subsequently updated to the year The research team would like to gratefully acknowledge the support and inputs received from Mr. R.S. Ahlawat, Senior Economic Adviser, Ms. Gur Pyari, Addl. Economic Adviser, and Mr. Anushman Mohanty, Deputy Economic Adviser during the course of the project. The research team would like to place on record their sincere thanks to the Chairman, Director, and staff of MSE for their help during the project. The research team would like to gratefully acknowledge the comments made by the participants of various workshops where the project findings were shared and in particular would like to thank Prof. Paul P. Appasamy, Prof. V.R. Muraleedharan, Dr. M. Madhusoothanan, Dr. Kurian Joseph, Mr. S. Karthikeyan, Dr. L. Venkatachalam, Dr. Prakash Nelliyat, and Shri Anushman Mohanty. The research team gratefully acknowledges the useful comments given by Prof. Ramprasad Sengupta and the officials of Departments of Industrial Policy and Promotion and Department of Commerce of the MoEF&CC. Chennai, India June 2017 K.S. Kavi Kumar v

5 Contents 1 Introduction... 1 K.S. Kavi Kumar 2 Global and Indian Supply Chain of Textiles Zareena Begum and Sukanya Das 3 India s Comparative Advantage in Export of Textiles and Apparel Products Elumalai Kannan 4 Global Environmental Requirements Textile Industry Zareena Begum and K.S. Kavi Kumar 5 Non-tariff Barriers in Textiles: Incidence and Perceptions K.S. Kavi Kumar, Zareena Begum and Sukanya Das 6 Exploring Linkages Between Pollution Abatement and Trade in Textile Industry G. Badri Narayanan 7 Conclusions K.S. Kavi Kumar Annexure I Annexure II References vii

6 Editor and Contributors About the Editor K.S. Kavi Kumar is Professor, Madras School of Economics (MSE), Chennai, India. He coordinated activities of the Centre of Excellence in environmental economics, supported by the Ministry of Environment and Forests, Government of India, at the MSE during He is also a Member, Expert Committee of Climate Change, Government of India; and a Member, State Environment Appraisal Committee, Tamil Nadu. Prof. Kumar is an M.Tech. from Indian Institute of Technology (IIT) Kharagpur and obtained his Ph.D. in development economics from Indira Gandhi Institute of Developmental Research (IGIDR), Mumbai, India. His areas of research interest are economics of environment, economics of climate change, and development economics. Contributors Zareena Begum Madras School of Economics, Chennai, India Sukanya Das Department of Policy Studies, TERI University, New Delhi, India Elumalai Kannan Centre for the Study of Regional Development, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India K.S. Kavi Kumar Madras School of Economics, Chennai, India G. Badri Narayanan School of Environmental and Forestry Sciences, University of Washington, Seattle, WA, USA ix

7 List of Figures Fig. 1.1 Textile industry value chain... 2 Fig. 1.2 Applied and bound tariff rates... 9 Fig. 2.1 Sources of textile imports to EU (1995, 2006 and 2012) Fig. 2.2 Sources of clothing imports to EU (1995, 2006 and 2012) Fig. 2.3 Sources of textile imports to USA (1995, 2006 and 2012) Fig. 2.4 Sources of clothing imports to USA (1995, 2006 and 2012) Fig. 2.5 Industrial upgradation by Asian Economies apparel value chain Fig. 2.6 Textile and apparel supply chain Fig. 3.1 Destination for India s textile exports (1995, 2007 and 2013) Fig. 3.2 Destination for India s clothing exports (1995, 2007 and 2013) Fig. 4.1 Environmental pollution stages of textile processing Fig. 5.1 Types of NTMs imposed by different countries on Indian textile exports Fig. 5.2 Distribution of NTM types Fig. 5.3 Value of exports of major textile commodities Fig. 5.4 Value of exports of minor textile commodities Fig. 5.5 Fig. 5.6 Fig. 5.7 Fig. 5.8 Growth rates in the value of exports of major textile commodities Growth rates in the value of exports of minor textile commodities Shares in the total value of exports of major textile commodities Shares in the total value of exports of minor textile commodities Fig. 5.9 Output trends in major textile processing sectors Fig Output trends in minor textile processing sectors Fig Employment trends in major textile processing sectors xi

8 xii List of Figures Fig Employment trends in minor textile processing sectors Fig Price indices of synthetic textiles Fig Distribution of respondents on the basis of treatment plant Fig Distribution of respondents on the basis of certification Fig Adequacy of environmental testing facilities Fig Adverse impact of environmental regulations on competitiveness... 92

9 List of Tables Table 1.1 Unorganised and organised sectors in Indian textiles and apparel: Table 1.2 Structure and production of Indian textile industry to Table 2.1 Major exporters of textiles in the world (% share) Table 2.2 Major importers of textile products in the world (% share) Table 2.3 Major exporters of clothing in the world (% share) Table 2.4 Major importers of clothing in the world Table 2.5 Growth in export of textile products (%) Table 2.6 Growth in export of clothing (%) Table 2.7 Growth in import of textile products Table 2.8 Growth in import of clothing Table 2.9 Product level specializations: comparative advantage of South Asia s leading players in the T&C sector Table 2.10 Leading apparel exporters: strengths and weaknesses/threats Table 2.11 Average capacity utilization of spinning mills Table 2.12 Value of output of units undertaking processing activity in both factory and non-factory sectors Table 3.1 Share of export of textiles and clothing in total exports in India ($ 00 million) Table 3.2 Composition of India s textile exports (%) Table 3.3 Share of export of India s top twenty textile products (%) Table 3.4 Composition of India s clothing exports (%) Table 3.5 Share of export of India s top twenty clothing products (%) Table 3.6 Comparative advantage in export of textiles (triennium ending) xiii

10 xiv List of Tables Table 3.7 Comparative advantage in export of textile fibres (triennium ending) Table 3.8 Comparative advantage in export of textile yarn/fabrics/articles (triennium ending) Table 3.9 Comparative advantage in export of clothing (triennium ending) Table 3.10 Comparative advantage in export of clothing (triennium ending) Table 4.1 Environmental standards textiles industry Table 4.2 Eco-labeling schemes of different countries for textile products Table 5.1 Examples of non-tariff measures/barriers Indian textile exports Table 6.1 Generic standards for wastewater discharge in India Table 6.2 Dye and dye intermediate industry: wastewater discharge standards Table 6.3 Textile sub-sectors and SSI: wastewater discharge standards Table 6.4 Typical characteristics of wastewater from textile processing units Table 6.5 ETPs and eco-awareness in Indian textile processing sector Table 6.6 Oeko-Tex standard classification for effluents: comparison with CPCB Table 6.7 Water quality standards: a comparison of EU and India Table 6.8 Natural dyes versus synthetic dyes: cost, fastness and applicability Table 6.9 Sector-wise cost differences between natural and synthetic dyes Table 6.10 Environmental and financial aspects of ETPs Table 6.11 Impact of pollution abatement on Indian textile sector

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