Rajahmundry became the central point of wholesale cloth business since 1970. Before 1970s, all big cloth businesses were concentrated at Chennai, says Ramesh Hemchand, cloth merchant and secretary of the Rajahmundry Cloth Merchants Association.
"By 1980s, the crystallisation of cloth business was complete," he added.
Apart from this, the city has always been a popular destination for synthetic sarees.
In East Godavari district, Rajahmundry and Dwarapudi account for a synthetic fabric business of Rs 300 crore (Rs 3 billion) while the readymade garment industry which, of late, has gained popularity, records a business of Rs 100 crore (Rs 1 billion) per year.
There are about 2,000 retail cloth shops in East Godavari district and a hundred wholesale cloth merchants who trade from the coastal and Rayalaseema districts. The wholesale business itself accounts for an approximate Rs 100
According to president of Rajahmundry Cloth Merchants Association Bommana Raj Kumar, Rajahmundry churns out a business of Rs 1 crore (Rs 10 million) every day during on season, which stretches to a period of four to five months in a year. The average business turnover of Rajahmundry during off season is estimated to be about Rs 40 lakh (Rs 4 million) per day.
The main reason for the popularity of Rajahmundry as a wholesale business centre is that the clothes here are sold at cost price.
The huge volume of business is attributed to the credit facility offered by the wholesale merchants to small traders from other districts making it easy for anyone to run the business as a cottage industry with the least investment, says Ramesh Hemchand.
Ramesh says that the cloth industry caters mainly to the middle-class segment while only 10 per cent of the business caters to the affluent class.
The clothes to Rajahmundry are supplied by the mills in Surat, Mumbai, Banaras, Kanchipuram and Dharmavaram. However, since 1990s, Vijayawada, Vizag, Bhimavaram and Kakinada began emerging as centres of cloth business.