Employees handle garments on the cutting division production line at the CBC Fashions Pvt. factory in Tiruppur, Tamil Nadu. (Bloomberg)
Employees handle garments on the cutting division production line at the CBC Fashions Pvt. factory in Tiruppur, Tamil Nadu. (Bloomberg)

Elections promise no relief for Tiruppur’s stressed textile industry

Elections in the state have brought with it no hope for an industry that has taken one blow after another since demonetisation in 2016.
By Sharan Poovanna
PUBLISHED ON APR 05, 2021 08:26 PM IST

It’s about 6pm and the workers at SJ International, a textile firm that specialises in embroidery, have just completed their ‘April 1’ prayers to herald in the new financial year. There is an eerie silence in the small factory as the swanky looking machines from Japan, extending from one end of the room to the other, have been switched off since the company has just one order and the machines can only be used when 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 this establishment. 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 7000. Now the cost of embroidery is 20, but the salary of the operator has more than doubled to 15000, Kumar said, listing out one of the many challenges of this textile town.

As we walk out, we stumble upon a poll-pamphlet promising 1500 per family per month, a washing machine, one government job, a solar stove and other attractive offers if All India Anna Dravida Munnetra Kazhagam (AIADMK) comes to power. Similarly, the loudspeakers used for campaigning by the Communist Party of India candidate, who is in alliance with the Dravida Munnetra Kazhagam (DMK), can be heard for several hundred meters in the bylanes of the Appaji Nagar, where several small and medium size units operate.

Elections in the state have brought with it 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 60-70 per kg, hurting orders and margins.

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

The city of Tiruppur has thousands of small and big textile companies who 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 large hub for textiles. Coimbatore, one of the three centres (including Bombay and Ahmedabad) in India that was referred to as ‘Manchesters’ is just 40 kms away.

Though Tiruppur 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, first to Italy.

Legend has it that popular Italian brand Verona first came to this town in 1978 through Mumbai (then Bombay) to buy white T-shirts.

Today there are hundreds of internationally reputed brands whose base for production is Tirupur like Nike, Tommy Hilfiger, Adidas, Ralph Lauren, Polo, GAP and Primark among scores of others.

In 1984, Tirupur exported 104 lakh pieces of clothing, valued at 9.69 crore which has reached 22,715 crore till February 2021, data shows. Tiruppur accounts for 52% of India’s knitwear production and earns revenues of around 50,000 crore per annum just from textiles (both exports and domestic market).

The lockdowns in European countries have also impacted demand as they account for the majority of Tirupur’s exports.

The first lockdown in India also saw the departure of around 30% of the nearly 800,000 labourers to 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.

Compounding the crisis for the industry, 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.

Both the AIADMK and DMK have promised everything from monthly salaries to government jobs and all kinds of freebies but nothing for this industry, which is clearly struggling currently.

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