West Bengal Garment Industry & the Informatization Process

Introduction Garment manufacturing is one of the many labor-intensive sectors that have enabled developing countries to break into the global garment market. Today, developing countries produce half of the world's textile exports, especially since the final phase-out of the Multi-fiber Arrangement (MFA) on January 1, 2005(Roy, 2010). But India has only recently emerged as a major exporter of apparel on a global scale although it accounts for very little FDI, the overwhelming bulk being domestically owned and financed. The textile industry in India as a whole accounts for about 14 per cent of industrial production and more than 10 per cent of the country's total exports, reaching in 2011-12 about $31 billion (AEPC India, 2011-12). It is the largest jobs generator after agriculture, employing around 35 million people across various segments. Garment manufacturing by itself (especially hosiery based) is located in Tirupur (Coimbatore district of Tamil Nadu), Karnataka, especially Bangalore, and the National Capital Region, especially Noida, Manesar, Gurgaon, etc. But there are sizeable pockets in West Bengal, Orissa and Andhra Pradesh. In West Bengal, certain characteristics set it apart from garment manufacturing in other locations. For instance, studies on garment units in South India have found that the majority of garment workers are women (85% in Bangalore) (CIVIDEP); that the industry is focused around exports; that there is a degree of precision in the enumeration of factories. In West Bengal, very few women are involved, except in a handful of companies, the bulk of garments is produced for the domestic market, catering mainly to eastern India, and it is practically impossible to state any numbers for the garment industry, either in terms of production units or in terms of employment. Despite being labor intensive, the cost of labor is minimal in West Bengal, probably because of its informalization. There are some similarities with other regions, for instance in the age of the hosiery industry, in outsourcing, etc. But the differences are more visible. West Bengal Garment Industry The garment and hosiery industry in West Bengal is large, estimated to be employing lakhs of men and women and which is at least a century old. It has expanded in recent years in response to the changing consumption patterns, higher purchasing power, move away from traditional clothes (sarees & dhotis), brand consciousness, and especially the demands of the new high earning white collar employees according to Vijay Kariwala, Vice President, West Bengal Garment Manufacturers & Dealers Association (WBGMDA). The association itself is 50 years old, but has only about 500 companies as members, compared to its own conservative estimate of at least 50,000 units producing clothes, accessories etc. The association says that the industry is slowly being brought under the purview of taxation, though the findings of this study would suggest otherwise. Previously sales tax applied only to garment pieces costing less than Rs 200. Now all pieces costing Rs 51 or more are covered under VAT. From 2010 all branded garments were also brought under the purview of excise duty. But then the problem of enforcement will become apparent in this study. The industry is located mainly in South Bengal, in and around Kolkata and Howrah and the semi-urban and rural clusters around them. The industry is not located along thoroughfares, but is woven into the interstices of the two cities and reaching out into niches in districts bordering the cities. It does not enjoy the advantages of sharing infrastructure, which units in the southern states enjoy. It is both urban and rural, organized and unorganized, new and old. The Industry is like an iceberg--with a small visible, formal or organized portion comprising some of the big names in garments and a few registered units, and a vast submerged unregistered informal portion, which thrives on the outsourcing that marks every unit. …