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Election promises bring no relief for stressed Tiruppur textile units

It is about 6pm and the workers at SJ International, a textile firm that specialises in embroidery, has just completed their ‘April 1’ pooja to herald in the new financial year
By Sharan Poovanna
PUBLISHED ON APR 06, 2021 12:40 AM IST

It is about 6pm and the workers at SJ International, a textile firm that specialises in embroidery, has just completed their ‘April 1’ pooja to herald in the new financial year.

But there is an eerie silence in the small factory as the swanky looking machines from Japan that extend from one end of the room to the other have been switched off. The company has one order and the machine, one of at least four, comes alive, embroidering over 10 pieces of clothing at one go.

“There is nothing we can say. Just take a look at the switched off machines and you will understand our position,” said Kumar, the manager of SJ International.

Orders have been hard to come by. The company only provides value added services to the larger exports business, but poor order books have cast a shadow of uncertainty in Tiruppur’s once thriving textile business.

Five years ago, the cost of embroidery on one piece was 40 and the salary of an operator was 7,000. Now the cost of embroidery is 20, but the salary of the operator has more than doubled to 15,000, Kumar said, listing out one of the many challenges of this textile town.

As we walk out, a poll-related pamphlet is on the floor near the entrance. The colourful sheet of paper lists out benefits like 1,500 per family per month, washing machine, one government job, a solar stove and other attractive offers if the vote is cast in favour of the All India Anna Dravida Munnetra Kazhagam (AIADMK) candidate.

A few hundred meters in the bylanes of Appaji Nagar where several small and medium size units operate, candidate of the Communist Party of India (Marxist), the party which is in alliance with the Dravida Munnetra Kazhagam (DMK), is campaigning.

There are over 8,350 textile units in Tiruppur which undertake works like knitting, dyeing, bleaching, printing, garment making and other ancillary units. But none of them see any hope of any relief in the upcoming elections.

Elections in the state have brought no hope for an industry that has taken one blow after another since demonetisation in 2016, introduction of goods and services tax (GST) and then the Covid-19 outbreak last year.

The latest of the challenges for the industry are the surge in yarn prices that have gone up by as much as 60 to 70 per kg, hurting orders and margins.

e are just not getting yarn as suppliers say they do not have any even if we are willing to pay the higher prices. The delays add to pressure on delivery targets, and we are forced to shell out more for freight cost,” said Ravi Kumar, an entrepreneur who runs a medium size textile unit in Tiruppur.

The city of Tiruppur has thousands of small and big textile companies which specialise in knitwear and readymade garments. The first knitwear unit in this parched district was set up in 1925 and by the 1940’s it started to turn into a textile hub. Coimbatore, one of the three centres(after Mumbai and Ahmedabad) in India that was referred to as ‘Manchester’, is just 40 kms away.

Though the city focused on the domestic industry till about the 1980’s, the fortunes of this small town took a turn for the better since then as it began exports. Today, there are hundreds of internationally reputed brands -- Nike, Tommy Hilfigure, Adidas, Ralph Lauren, Polo, GAP and Primark among scores of others -- whose base for production is Tiruppur .

In 1984, Tiruppur exported 104 lakh pieces of clothing, valued at 9.69 crore ($ 8.52 million) to 22,715 crore or around $3 billion till February 2021, data shows. The export industry saw a decline from 27,280 crore in 2019-20 to 24,500 crore from 2020 to February this year, data shows. Tiruppur accounts for 52% of India’s knitwear production and earns a revenue of around 50,000 crore per annum just from textiles (both exports and domestic market).

The lockdowns in European countries further impacted demand as they account for the majority of Tiruppur’s exports. The first lockdown in India also saw the departure of around 30% of the nearly 800,000 labour force leave for their hometowns and majority of whom are yet to return.

“We have asked the government to construct permanent housing for migrant workers so that they also have a sense of belonging here that could help us mitigate our labour crisis,” S Sakthivel of the Tiruppur Exporters Association (TEA) said. Other demands like announcing rates for product linked incentives (PLI). There is uncertainty on the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme since it is a new Financial Year. Under this scheme, duties on taxes levied at the central, state and local levels such as electricity and VAT on fuel will be refunded to exporters.

The industry or its problems found no mention even in Prime Minister Narendra Modi’s speech in Dharapuram on March 30 in the same district where the Bharatiya Janata Party (BJP) is trying to make inroads.

Both the AIADMK and DMK have promised everything from monthly salaries to government jobs and all kinds of freebies but nothing for an industry that remains ready to thrive but held back by its mounting challenges.

“What can the state government do on issues that are decided mostly by the Centre,” Dhanaraj of CR Garments, a sportswear knitting company said.

“There is no shortage of jobs in Tiruppur. In fact, we have a shortage of labour. With no support from the government, this is going to be another stressful fiscal,” Dhanraj said.

Polling across 234 assembly constituencies in 38 districts of Tamil Nadu will begin at 7 am on Tuesday. The counting of votes will be done on May 2.

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