Though the central government claimed that India has survived the global financial crisis, a senior bureaucrat in the Ministry of Commerce has come out with a startling figure, which suggests that the Indian textile industry will lose half a million jobs by April 2009 due to the global financial crisis.

Commerce Secretary G.K. Pillai told reporters in New Delhi that according to the estimates of the textile ministry, there will be job losses of about 500000 in the next five months. Pillai also said that the sector was facing a severe crunch because of deepening problems in the world economy, but stressed that New Delhi was cobbling together a package for the "distressed export sector". The United States and the European Union account for 65 percent of India's total garments exports.

The textile sector accounts for 20 percent of India's industrial production and more than 30 percent of the country's export earnings, according to government figures. Pillai said the overall export growth rate was likely to slide to 10 percent in the financial year ending March 31, 2009.

The Federation of Chambers of Commerce and Industries in a recent study said the sector's growth slipped from eight percent in 2005 to 0.8 percent during April-August this year and warned of massive layoffs in the coming months.

The Confederation of Indian Industries (CII) trade lobby also said that India's garment exports too dipped by up to 35 percent during July-September in the current financial year.