9.20        ndian    onom
              by late 2015. This has happened due to       cent, with some close to 50 per cent; and that
              fall in global prices.                       of leather and footwear averaged more than 25
         (v) The Indian aluminium industry will            per cent. In its take-off phase of growth, India
              continue to face difficulty unless world     has underperformed relative to the East Asian
              prices increase, because in the short run it competitors. The Indian underperformance, has
              is virtually impossible to reduce the cost   been particularly marked in the leather sector.
              of production.
                                                           Social transformation through women
          Global aluminium prices, like other metal        empowerment
     prices, are cyclical and it is difficult to forecast
     when they will begin to move upwards. But the         These industries create high number of jobs,
     trend is expected to change when world industrial     especially for women—apparel sector is the most
     growth improves. India is avoiding custom duty        labour-intensive followed by footwear. Apparels
     to reduce import of aluminium because it may          are 80-fold more labour-intensive than auto
     erode the competitiveness of downstream sectors       industry and 240-fold more jobs creating than steel
     like power, transport and construction.               industry—the comparable numbers for leather
                                                           goods are 33-fold and 100-fold, respectively. As
     APPArel AnD footWeAr sectors                          per the World Bank’s employment elasticities, it is
                                                           estimated that rapid export growth in these sectors
     Since the industrial revolution, no country has
                                                           could generate about 5 lakh additional direct jobs
     become a major economy without becoming
                                                           every year. Enhanced opportunity for women
     an industrial power. In case of India, industrial
                                                           implies that these sectors could be ‘vehicles for
     expansion had been not only stunted but               social transformation’—in Bangladesh, female
     largely capital-intensive (job creation being not     education, total fertility rates, and women’s
     compatible to investments). Sitting on the cusp       labour force participation moved positively due to
     of demographic dividend, India needs to generate      the expansion of the apparel sector.
     jobs that are formal, productive and compatible
     to investment. Besides, the economy has to search     A historic opportunity
     for alternatives for promoting growth, exports
                                                           India has an opportunity to promote the exports
     and broader social transformation. In this case
                                                           from these sectors as Chinese market shares are
     two sectors—apparel and leather & footwear,
                                                           either stabilising or falling. The space vacated
     presently, look eminently suitable candidates54.
                                                           by China is fast being taken over by Bangladesh
     Growth and exports                                    and Vietnam in case of apparels; Vietnam and
                                                           Indonesia in case of leather and footwear. At
     Almost every high growth economies in post-           present, Indian apparel and leather firms are
     war history in East Asia has been associated with     relocating to Bangladesh, Vietnam, Myanmar,
     rapid expansion in clothing and footwear exports      and even Ethiopia. The window of opportunity
     in the early stages. In the successful East Asian     is narrowing and India needs to act fast if it is to
     economies where GDP growth booms averaged             regain competitiveness and market share in these
     between 7-10 per cent, growth in the exports of       sectors.
     these two sectors was exceptional—the average
     annual growth of apparel exports was over 20 per      Challenges
       54.  Economics Survey 2016-17, Vol. 1, Ministry of  These sectors face a set of common challenges—
             inance, overnment of ndia, . elhi, pp.      . logistics, labour regulations, the policies related to