Tirupur garment industry in doldrums

The economic slowdown has hit hard Tirupur, the knitwear hub of India resulting in a drastic slowdown in business.

The textile business, already reeling under severe loss post demonetisation and implementation of GST has further been affected due to the recent economic recession.

“Until a few years, these units used to work overtime and even nonstop to meet the demand for Deepavali festival. However, the apparel production, which began to gradually drop year on year, has come to a drastic decline for this festival. Nevertheless, large volume of manufactured apparels lie stagnant and orders too have not been encouraging,” said MP Muthurathinam, president of Tirupur Exporters and Manufacturers Association (TEAMA).  

Production has come down by almost 50 per cent due to sluggish demand in both domestic and export market. In the last financial year between April 2018- March 2019, Tirupur exported Rs 26,000 crore worth apparels and business went upto Rs 20,000 crore in the domestic market across India. “This year, the industry is struggling due to a host of issues and it may be impossible to reach out this trade volume. Many of the apparel production units have begun to declare forced holidays despite the oncoming festival season. From 26 working days a month, currently it has become 16 days a month due to lack of orders,” he added.

To sum up the crisis, Muthurathinam said, “Once every other textile unit would have hung a ‘workers wanted’ board, but those very same units are now greeted with boards announcing ‘go down for rent’ in their premises.

The textile industry in Tirupur is in the doldrums. Weighed down by demonetisation and GST, the once bubbling knitwear business is now struggling to survive. Adding to its woes is the import of cheaper apparels from China and Bangladesh. 

Production has drastically come down due to poor demand for all knitwear items, pushing thousands of workers to other profession.

Besides the local factors, the growing competitiveness from emerging rival nations has made this crisis worsen for the textile units in Tirupur.  “India has been competing with tariff advantaged nations like Bangladesh, Vietnam, Cambodia, Ethiopia, Myanmar and Sri Lanka in the global apparel trade. Due to intense competition in the world textile trade, manufacturers in India are operating in wafer-thin margins,” said Raja M Shanmugham, president of  the Tirupur Exporters Association.

India has already been relegated to the sixth rank in the global readymade garment manufacturing exports with a global market share of 3.9 per cent while Bangladesh and Vietnam are enjoying second and third positions with the market share of 7.9 per cent and 5.2 per cent respectively, he added.

Industrialists shared a common opinion that the textile industry is facing threat due to import of cheaper apparels from China and Bangladesh. 

“The entire apparel industry may get extinct if the duty free import of clothes from Bangladesh is not stopped. Garments from China are imported into India through Bangladesh without tax. Those apparels are much cheaper and has attractive designs, but does not have quality,” GS Babuji, general secretary of the Seconds Collar Shirts and Inner Wears Small Scale Manufacturers Association (SISMA).

Tirupur, which contributes for manufacturing of more than 50 per cent of knitwear garments in India,  employs six lakh workers directly and two lakh workers indirectly, mainly semi-literate women workers hailing from rural areas.

With thousands losing jobs already, the existing workforce too have no guarantee over continuing in the job due to prevailing challenging situation. 

Even many of the employers have turned into employees unable to run the business hit hard by the downturn. Take for instance, R Saravanan, a native of Madurai, who came down to Tirupur in search of job two decades ago.

In his twenties then, Saravanan joined a textile firm and learnt the tricks of the trade to start a textile printing unit by himself within five years. “I made good profit as the textile business was in its peak,” he said. His downfall came two years ago post-demonetisation and GST.

“Orders for textile printing almost stopped and payments got either delayed or defaulted forcing me to sell my house and car to pay bank dues. My life had come back to the scratch, from where I started. I am now working in a textile unit for a weekly salary. And the existing scenario looks like it may be difficult to even hold on to this job,” he said.