Gujarat is grappling with a financial crisis resulting in a 30-40% drop in production and many factory owners have reduced the work hours to four-five days per week, said people familiar with the matter.

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Gujrat  is the second biggest textile manufacturing hub in India after Tiruppur in Tamil Nadu and produces a wide range of fabrics and garments, including silk, cotton, and synthetic textiles. With an estimated annual turnover of ₹80,000 crore, it employs close to two million labourers, many of whom are migrants from states like Uttar Pradesh, Bihar, Odhisha, Madhya Pradesh and some south Indian states as well. However, it has been facing various challenges that have led to a decline in its growth and profitability.

Kailash Agarwal, managing director of Himani Fashions Pvt Ltd that runs two textile production facilities in Surat, said that the production has come down by more than 30% in the last few months. His company has declared five days a week of work for all employees from the month of April.

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Soon after the Covid-19 outbreak and the lockdown that followed, there was a shortage of cloth in the country. The city of Surat reaped rich benefits as a result. This was short-lived as Surat is a hub for synthetic fibres--especially sarees and related material--, the demand for which has been on a constant decline. In garments and stitched products there are quality issues and the industry is facing tough competition from markets like Mumbai, Delhi, Indore and Jaipur,” said Agarwal, who employs around 2,000 people and has an annual turnover of around ₹250 crore. He also added that the share of Surat’s textile in international market was very low due to quality issues.

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The Surat textile industry crisis will have a significant impact on the local economy and the people who depend on it. Many textile mills, if forced to shut down, will lead to job losses and a decline in the standard of living for many families. The crisis has also affected the textile traders, who have been struggling to find buyers for their products.

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According to people familiar with the matter, one of the significant factors contributing to the crisis is the rise of Chinese imports. The influx of cheaper textiles from China has made it difficult for the local manufacturers to compete. The Chinese textiles are of a lower quality, but they are significantly cheaper, making them an attractive option for many buyers. This has led to a decline in demand for locally produced textiles, which has hit the Surat textile industry hard, according to a Surat based textile mill owner.

Another factor that has contributed to the crisis is the increase in the cost of production. The cost of raw materials, such as cotton and silk, has gone up, while the cost of labor has also increased. This has led to a rise in the overall cost of production, which has made it difficult for the manufacturers to remain competitive.

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The government of Gujarat and the central government have taken various measures, such as providing financial assistance to the industry and setting up textile parks to attract investment in the sector. However, these measures have not been enough to revive the industry fully. The industry needs a comprehensive plan that addresses the various challenges it is facing.

The proposed textile park in Gujarat will take at least 3 years to come up.

According to Jirawala, who joined the ruling Gujarat BJP last year ahead of the Gujarat assembly elections, the central government’s Textile Upgradation Fund scheme capital which expired in March this year, should be renewed to give a boost to the Surat’s textile sector. He said that the industry has approached the government to clear more than 550 files of factory owners whose applications for government announced subsidies for the sector are pending.

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Discalimer: this information has been collected through secondary research and posted by third party therefor textilemarket. In is not responsible for any errors in the same. 

Softening of cotton prices in the domestic market and reduced inventories with retailers in the western countries are expected to bring stability to textile and apparel sector this year, according to textile entrepreneurs.

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 Nearly 150 entrepreneurs from Andhra Pradesh, Telangana, Gujarat, and Tamil Nadu participated in an interactive session and industrial visit organised by Indian Texpreneurs Federation (ITF) here on Saturday.

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 The ITF organised the programme in partnership with Andhra Pradesh (AP) Textile Mills Association, Telangana Spinning and Textile Mills Association, and Spinners Association (Gujarat).

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 According to Prabhu Dhamodaran, convenor of ITF, most of the participants were of the view that compared to last year, current reduction in cotton prices, lower freight charges, lesser inventories with retailers, softening of inflation in developed markets, and re-opening and pent up demand of China will bring stability to the textile and apparel sector.

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 It was decided at the meeting that the associations would share data regularly on market intelligence related to cotton, yarn, and fabrics, domestic and export market trends, benchmark numbers on productivity and cost reduction techniques, and best practices. They would also share knowledge to boost value addition as next vision for textile spinning sector and share research data on Indian and global textile and fashion trends.

Discalimer: this information has been collected through secondary research and posted by third party therefor textilemarket. In is not responsible for any errors in the same.    '   

To achieve the $200 billion target, India must expand its presence in the global market. By forging strategic partnerships, participating in international trade fairs and exhibitions, and effectively leveraging e-commerce platforms, Indian textile manufacturers can showcase their products to a broader audience. In addition, collaborations with international fashion brands and designers can help penetrate high-end markets, allowing Indian textiles to gain recognition and value globally.

India’s textile industry possesses immense potential to achieve the target of $200 billion, fueling economic growth, generating employment opportunities, and showcasing the nation’s cultural heritage to the world. By harnessing its rich textile heritage, empowering skilled artisans, implementing supportive policies, strengthening market access, adopting sustainable practices, and embracing technology, India can overcome the challenges and lead the global  The collective efforts of the government, industry stakeholders, and artisans will pave the way for a thriving and prosperous Indian textile industry, one that continues to be a symbol of excellence, craftsmanship, and innovation.

Technology integration is critical for India’s textile industry to leapfrog into the future. Automation, digitalization, and the Internet of Things (IoT) can significantly enhance efficiency, productivity, and quality control. Investments in state-of-the-art machinery, digitized supply chain management, and advanced textile processing techniques will enable India to compete on a global basis and fulfil the changing expectations of the sector.

 The beleaguered textile sector in Pakistan is grasping at straws seeking policy supports from the prime minister. The move has got experts hot and bothered about the scenario in India as well.

In its submission to the prime minister, the Pakistan Textile Mills Association has stated that international demand has weakened with the clouds of a worldwide recession looming close and, without price competitiveness, it is not possible for the industry to retain its market share.

The reduced purchasing power in key export markets, like the US, due to recession is expected to weigh on the order book of Indian exporters too, and could, in turn, hamper the near-term earnings for Indian textile companies.

India's $200 billion textile and apparel industry is facing a crisis as consumers in the United States, Europe and other big markets have cut spending on clothing following a surge in inflation after the war in Ukraine, industry officials said.

While the overall economy is relatively strong and is outperforming major economies, the textile sector is a notable exception and orders suggest the downturn will continue well into 2023, raising the risk of layoffs in an industry that employs more than 45 million people.

Exports, which constitute about 22% of the industry, have fallen for five months in a row - declining over 15% year-on-year in November to $3.1 billion. Domestic sales are sluggish despite strong growth in the overall economy because of high costs and cheap imported garments, manufacturers say.

After bumper sales earlier this year, local textile factories are now cutting production - contributing to a 4.3% contraction in manufacturing output in July-September quarter that has raised concerns among policymakers.

The shock comes as Prime Minister Narendra Modi's government struggles to create employment for millions of youngsters entering the job market each year.

After 18 months of robust growth through mid-2022, global retail sales of clothing have been dragged down by high inflation and depressed consumer sentiment, and prospects for 2023 look gloomy, a McKinsey report said last month.

In India, the manufacturing sector, contributing 16% of GDP, has been hit by rising raw material costs and weak demand, despite bright growth elsewhere. Manufacturing showed no signs of growth in the first half of the current April-March fiscal year while the overall economy, helped by agriculture and services, expanded 6.3%.

Textile manufacturers, along with makers of footwear, furniture, electronic and electricals, have been hit as companies battle to pass on rising input costs, while consumers have cut expenditure on these products as they spend more on food and fuel.

The beleaguered textile sector in Pakistan is grasping at straws seeking policy supports from the prime minister. The move has got experts hot and bothered about the scenario in India as well.

In its submission to the prime minister, the Pakistan Textile Mills Association has stated that international demand has weakened with the clouds of a worldwide recession looming close and, without price competitiveness, it is not possible for the industry to retain its market share.

The reduced purchasing power in key export markets, like the US, due to recession is expected to weigh on the order book of Indian exporters too, and could, in turn, hamper the near-term earnings for Indian textile companies.

Discalimer: this information has been collected through secondary research and posted by third party therefor textilemarket. In is not responsible for any errors in the same.