Around 10K textile units in Noida, Kanpur face financial crisis

LUCKNOW: With both the textile hubs of Kanpur and Noida reporting decline in credit (loan), the textile industry has been the worst hit in Uttar Pradesh, suggests the SIDBI-CRIF report on Indian Textiles and Apparels Industry.

This is due to the suspension of manufacturing activities after the COVID-19 lockdown in March 2020 imposed to check the spread of pandemic. When the manufacturing activities were to pick up in DecemberJanuary the deadly second wave dealt a severe blow to the sector.

The textiles and apparels industry in India is one of the oldest and largest sectors of the economy.

The CRIF is an RBI approved credit bureau in India which provides information about creditworthiness or credit history of individuals and commercial establishments.

The SIDBI’s report states that the number of active loans (volume), in the sector stood at 4.26 lakh as of December 2020.

During this period, there has been a decline of 42 percent in the credit (loan) in Kanpur region which is one of the two hubs of textile industry in Uttar Pradesh.

Till December 2020, the credit outstanding portfolio in Kanpur was Rs 1,730 crore. The credit portfolio of textile industry in the entire Uttar Pradesh was Rs 4,600 crore till December 2020. At present, there are over 10,000 textile and garment units across the state with most of them concentrated in Kanpur and Noida region.

In Noida region of the state there are around 3,000 textile units. Each unit has a minimum workforce of around 100 employees.

Almost all of them are facing financial crisis in the post-pandemic scenario.

Foreign buyers are reluctant to place orders with Noida units as they are apprehensive whether they will be able to fulfil the order due to prevailing Covid-19 condition in India.

“After the grim Covid-19 picture of India was portrayed in international media, foreign buyers are no more placing orders with us. Instead, they are moving to Taiwan and Bangladesh,” said Rajiv Bansal, national secretary, IIA, and a garment exporter.