Noida’s garment sector in crisis, exports dip by 25% in 2020-21

The rising prices of raw materials and packaging items have hit the garment industry in Noida, with officials saying the export business dipped from ₹20,000 crore in 2019-20 to ₹15,000 crore in 2020-21. The industry has also witnessed mass unemployment as 20% of the people employed in this sector have lost their jobs, said officials aware of the matter.

Lalit Thukral, president of the Noida Apparel Export Cluster (NAEC), said the Covid-19 pandemic made the situation worse for the readymade garment manufacturing sector in Noida. Garment production, both for domestic market and export, was halted for four months between March and June 2020.

“When the situation improved to some extent, the garment sector in Noida didn’t make enough business like it did before the pre-covid era. As a result, during the 2020-21 fiscal, apparel exports suffered a loss of more than 25% as compared to the export figures in the previous financial year,” he said.

He further said the steep rise in the price of yarn and cotton, which are part of most apparels, has made things worse. “It has been observed that yarn’s price per kg increased by more than 22% for 30s combed (combed cotton is a softer version of regular cotton and more expensive), 21.3% for 34s combed and 21.9% for 40s combed during the second half of 2020-21 fiscal. Besides, duty concession to competitive countries like Bangladesh, Vietnam, etc. because of their Free Trade Agreement with importing countries make the situation precarious for the exporters from Noida,” he said.

Manoj Sahu, an exporter, said the major reason for the increase in yarn and cotton prices is due to the massive surge in the export of the raw materials. “The rise in the price of raw material has forced garment exporters to shut down their companies, resulting in large-scale unemployment and subsequently India losing export to other countries. The government should immediately call a meeting of all the stakeholders to resolve this issue and stabilize the raw material prices,” he said.

He further said that the withdrawal of duty-free import of trimmings and embellishments on February 1 this year has also adversely affected the apparel export business in Noida.

Meanwhile, concerned about the possibility of a lockdown due to a surge in Covid-19 cases, the Apparel Export Promotion Council (AEPC) has urged the government to exempt factories from lockdown. A Sakhtivel, AEPC chairman, said that to ensure uninterrupted manufacturing at factories, the council has written letters to Union ministers of health, home, textiles and commerce and industry, besides chief ministers of some states. “The industry supports over 13 million workers directly and many more indirectly in rural areas and largely comprises micro, small and medium enterprises. It will be severely impacted if the lockdown is imposed again,” said Sakhtivel.

When the situation improved to some extent, the garment sector in Noida didn’t make enough business like it did before the pre-covid era. LALIT THUKRAL, president, Noida Apparel Export Cluster