Loom­ing cri­sis

FrontLine - - INDUSTRY -

The knitwear in­dus­try in Tirup­pur has not re­cov­ered from the dou­ble whammy of de­mon­eti­sa­tion and GST im­ple­men­ta­tion. With a stack of gov­ern­ment poli­cies block­ing their way, the man­u­fac­tur­ers feel that it is a mat­ter of time be­fore many units shut shop.

THE knitwear in­dus­try in what is per­haps In­dia’s most re­silient town, Tirup­pur, is gasp­ing for sur­vival. A com­bi­na­tion of fac­tors—bad pol­icy; poor im­ple­men­ta­tion; prom­ises the Cen­tral and State gov­ern­ments have failed to de­liver on; sud­den spikes in raw ma­te­rial costs; strict en­force­ment of en­vi­ron­men­tal laws; dwin­dling ac­cess to or­gan­ised credit; com­pe­ti­tion from emerg­ing play­ers such as Bangladesh, Viet­nam and Sri Lanka; and mount­ing pro­duc­tion time de­mands of buy­ers who are fa­mil­iar with how the in­dus­try op­er­ates—is driv­ing the in­dus­try into a down­ward spi­ral.

Ex­ports from Tirup­pur, which ac­counts for about 50 per cent of the to­tal knitwear ex­ports from In­dia, were grow­ing around 10 per cent an­nu­ally un­til about last year. Each year, the town added 15,000 to 20,000 jobs in the process. But the past year wit­nessed a de­cline, of 7 per cent, for the first time since 2011: the BY R.K. RAD­HAKR­ISH­NAN value of ex­ports fell to Rs.24,000 crore in 2017-18 from Rs.26,000 crore in 2016-17. Al­though In­dia was in a ma­jor growth mode af­ter the ces­sa­tion of the Multi Fi­bre Ar­range­ment in 2004, which gov­erned the world tex­tile trade for three decades un­til 2004, it is now strug­gling to hold on to the nearly 4 per cent mar­ket share be­cause of com­pe­ti­tion and favourable poli­cies im­ple­mented in Viet­nam, Bangladesh and Tur­key.

It does not look that good this

A FAB­RIC UNIT IN TIRUP­PUR that was closed down.

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