It was chill of a different kind that the hosiery and blanket industry of Punjab was hoping for this winter. Sales in last two years had not been brisk owing to warmer winters. The only consolation was the Kashmir valley, which has a longer winter spell and good tourist footfall.
But Punjab’s winter-dependent industry suffered a major blow this year after months of unrest in Kashmir, following the killing of militant Burhan Wani. Now, the industry is reeling under the aftershocks of demonetisation of Rs 500 and Rs 1,000 notes. Some units in Punjab’s industrial hub, Ludhiana—which has nearly 15,000 big, medium and small hosiery and knitwear units making shawls, sweaters, jackets, gloves, caps and warmers—have cut down production or stopped it altogether owing to cash crunch. So, are the 200-odd blanket manufacturers in Amritsar.
“Our industry has suffered the most this year. Jammu and Kashmir is our biggest market for hosiery products as it has long winters and huge inflow of tourists and pilgrims at Vaishno Devi. But all orders from the Valley this year got cancelled. Our business in other parts of the country is seasonal and we are able to earn only in the winter months. There are only a handful brands that have bank accounts of workers, rest are medium and small units. Most traders from J&K, Himachal, Punjab, Haryana and Delhi came to us during weekends and made payments in cash. We are not sure if we should accept the old currency. The note ban has left us with no cash to pay the labour,” said Vinod Thapar, chairman of Knitwear Club, Ludhiana.
Gurdit Singh, owner, Oster Woollen Mills, Ludhiana, said they stopped the production last week. “The hosiery industry was already hit by relatively warmer winters in the last two years. The return of unsold stock from wholesalers and retailers was also high. This year, we hardly got any orders from Kashmir due to the unrest. After the note ban, there is no fresh demand from retailers and wholesalers, who in turn say there are fewer customers. There is no point in producing when there is no demand,” he said.
Owners of blanket units in Amritsar say traders from Bihar, Uttar Pradesh, Madhya Pradesh and Bengal are cancelling orders. “We supply tweed for Kashmiri ‘phiran’. But this year, we were not able to get orders from the Valley as the tourist inflow was hit. Wholesalers and retailers order stocks and it takes 20 days to reach states such as Bihar, Bengal and Madhya Pradesh. After scrapping of old notes, they are calling us to say they do not want the stocks. This season is a total washout for us. We will suffer losses to the tune of crores,” says Sudershan Wadhwa, general secretary of Shastri Market Association in Amritsar, an umbrella body for textile units in the city.
The ripple effect is also being felt by spinning mills, wholesalers and retailers. But the worst affected, say the manufacturers, are labourers from UP and Bihar. “The textile industry is country’s second biggest employer after agriculture. Nearly 99% of our workers are migrants from UP and Bihar. Since some units have stopped production, labourers are feeling insecure and it may worsen the problem as we fear mass migration. Since units are not able to pay the labour in cash, the workers are queuing up outside banks to withdraw cash and not reporting at work,” says Thapar.
But Ashok Jain, who owns Mini King Fashion, welcomed the government’s move. “Our production is 80% of the normal. But once the currency crunch ends, even old stocks will get cleared,” he said. Ajit Lakra, president of Ludhiana knitwear and textile industry, feels demonetisation will lead to some course correction by the industry. “Textile units have started opening accounts of workers. The loss is short-term and sales may pick up eventually,” he said.