UPSC Mains 2017 GS Paper 3 Q2: model answer
Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports rather than capital-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports.
What the question wants
Explain why manufacturing did not deliver labour-intensive exports, and suggest ways to make exports more labour-intensive.
How to structure it
Reasons, then remedies.
- The puzzle
- Reasons
- Measures
How to think it through
India's exports skew to capital- and skill-intensive goods: refined petroleum, pharma, engineering, gems. Labour-intensive sectors (apparel, leather, footwear, toys) lost share to Bangladesh, Vietnam. Reasons: labour law rigidity, small firms, poor scale, high logistics cost, inverted duty, rupee, FTA access (EU duty for Bangladesh LDC), small-scale reservation history. Measures: apparel parks (PM MITRA), labour codes, FTAs (UK 2025, EU 2026), logistics, RoDTEP.
Model answer
Bangladesh, with about one-eighth of India's population, exports roughly as much apparel as India. That one comparison sums up the failure.
Why it happened
- Export basket skews to capital- and skill-intensive goods: refined petroleum, pharma, engineering.
- Firm size: most garment and leather units are tiny; they cannot meet big orders.
- Labour rules and the old small-scale reservation kept firms small.
- High logistics costs and slow ports.
- Inverted duty structure raised input costs.
- Market access: Bangladesh enjoyed duty-free entry to the EU as an LDC; India did not.
- Capital is cheap relative to labour for large firms, so they automate.
Measures
- PM MITRA mega textile parks with plug-and-play facilities.
- Labour Codes with higher thresholds and fixed-term hiring.
- FTAs: the UK deal (2025) and the EU deal concluded in 2026 open apparel and leather markets.
- RoDTEP refunds and fixing inverted duties.
- Cluster development, skilling of women workers, hostels near factories.
- PLI for textiles extended to apparel.
Labour-intensive exports need large factories employing thousands, and India must make it safe to build them.
Draw: A bar chart: apparel exports of India, Bangladesh and Vietnam.
Keywords, cases and data to drop in
labour-intensive exports, apparel, leather, Bangladesh, Vietnam, small-scale reservation, inverted duty, PM MITRA, Labour Codes, RoDTEP, India–UK CETA, India–EU FTA.
Where most answers lose marks
- Giving only reasons. The second part asks for measures.
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Question text as printed in the official UPSC Civil Services (Main) question paper. The model answer is original Battle IAS work; use it to learn structure, not to memorise.
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