EU unions fret over rising Indian textile exports

Loss of jobs is fast becoming a touchy topic in the EU in the wake of burgeoning unemployment. In Germany alone, close to 11 per cent of the total population is unemployed — highest in the post-World War II era.

Unions say India and China have a role here, having increased their textile exports to European markets by 13 per cent and 51 per cent in the first five months of 2005, since an international quota system ended on January 1.

“Indian and Chinese products are more advanced and they are more technology savvy,’’ said Donath.

Though Donath rules out returning to quotas, he demands that India must reciprocate by opening up its own domestic markets for niche German textile products. “Besides, these countries (India and China) must maintain a certain level of labour standards,’’ he said.

The onslaught of the textile exports is so much so that European companies are adopting various strategies to tackle the issue. Tubingen-based Euro 100 million Trigema, which is fighting a losing battle against rising textile exports, is relying heavily on its nationalist slogan ‘Buy German products to save local jobs’ to lure customers.

“Our products are of top quality and we source every raw material from Europe so that nobody loses jobs here,’’ says a Trigema spokesperson. ‘‘In fact, we have not dismissed any person from our plant due to lack of work since 1969,’’ he claimed.

Other European companies are, however, meeting the challenge head on. Seidensticker, a Euro 255 million firm, based in North Germany, has outsourced their entire factories to Vietnam, Bangladesh, Indonesia and Thailand to cut labour costs at home. It employs over 12,000 people in factories across South East Asia to make shirts for Europeans.

‘‘The jobs in the textile industry have long gone from Germany. The Europeans had 10 years to prepare for the dismantling of quotas. It is ridiculous the way Europe is trying to stop textile products coming from China to its shores,’’ said Gerd Oliver Seidensticker, managing director of Seidensticker Gmbh. ‘‘The quality of products is as high in Asia as it would be in Germany,’’ he added. The company sources its raw materials from India and plans to open a factory in China in the near future.

But for the Indian textile ministry, having set a target to increase exports from the current $37 billion to $85 billion by 2010, the quota abolition presents its biggest-ever opportunity.

“Indian textile industry is moving into a sweet spot. It occupies a unique niche in the global market since it parallels China’s strengths. Its market share to European Union will rise from 6 per cent in 2003 to 9 per cent by calender 2008,’’ said Sidhartha Bothra, a textile industry analyst with stock broking firm Motilal Oswal Securities.