A strong rupee has badly hit the Tirupur knit garment manufacturers in Tamil Nadu.
'There is a lot of euphoria in the country after a trade agreement is signed. But it is an illusion for us. What is more important is making it real.'
The Madras High Court order for closure of over 700 dyeing and knitting units in Tirupur may trigger huge loan defaults. Repayment of loans worth about Rs 20,000 crore would be hit if operations came to a halt, said Tirupur Exporters Association President A Sakthivel.
'A change we have seen after the Russia-Ukraine war is the energy crisis in Europe.' 'Earlier, in Europe, people used to change their clothes after 5 washes, now they are using it till 15-20 washes.' 'They used to change their entire wardrobe after 2 months or so, but because of the economic conditions, it has changed.' 'It has affected exports as 40% of our exports is to Europe, 30% to the US and 10% to the UK.' 'The war has to end for better days to come.'
India's largest garment hub Tirupur continues to reel from the effects of the pandemic, with almost 10 per cent of its orders for the upcoming season getting diverted to Bangladesh, Vietnam, Cambodia and China. The sector had seen a drop of about 9 per cent in exports during the first wave, but the impact is likely to be more this time, according to industry experts. Being one of the epicentres of Covid cases in the state, a majority of manufacturing units in the textile belt were closed for almost six weeks during the second wave.
The Rupee appreciation has had an adverse affect not only on exports, but also on the employment front, as nearly 7,000 have already lost or left their jobs, as there were no fresh orders from buyers from July last.
Most industry players in Tirupur feel that though the idea of GST is good, the problems are largely due to its poor implementation. Refund delays, withdrawal of incentive schemes make Made-in-Tirupur products costlier by 10-15 per cent, say entrepreneurs.
Banks may reduce their interest rates.
'We have 750 districts across the country, and each district can create one cluster like Tirupur on any product of their choice.' 'This way, we can even have $3 trillion in exports.'
After dipping by as much as 17 per cent in April, readymade garment (RMG) exports of all textile categories in India are showing signs of recovery in May. Exporters in Tiruppur are indicating a rise in rupee terms during the month, while it may take at least a month for volumes to be back in positive terrain. Among the global majors that are placing orders in the textile hub include Walmart, H&M (Hennes & Mauritz AB), Tommy Hilfiger and Target.
Backed by the China-plus-one policy, India's textile and apparel exports have seen a 53 per cent growth during the April-November period of the current fiscal year at around $26 billion. This compares to the figure of $17 billion during the same period in FY21. According to Wazir Textile Index, all major companies including Welspun, Vardhman, Trident, KPR Mills, Indo Count, RSWM, Filatex, Nahar Spg and Indorama have posted higher sales during the first half of the current fiscal year compared to the pre-pandemic year.
In a release on Thursday, A Sakthivel, president, TEA said, "It was a disappointment that there was no announcement on the reduction of interest rate given to the MSME Export Sector, which is urgently needed to have a competitive edge for sustaining in the global market."
MotherCare, the baby and maternity clothes retailer that annually sourced garments worth Rs 100 crore from a single exporter in Tirupur, filed for bankruptcy in the UK and will close all its 79 shops in that country. It was the latest world-famous brand to pull down Tirupur's fortunes.
Business Standard checks out trade hubs across the country to assess the impact of demonetisation. The first of a six-part series takes a look at Tirupur.
With China and Bangladesh losing their edge, textile exports from Tirupur are rising once again, turning the city into a job magnet.
The exporters are optimistic that the industry will grow by 8-10 per cent and it can improve further if the government helps the industry.
In the last five years of NDA rule, 2018-2019 was the worst for exporters.
'The approach today is, instead of giving loans to 100 MSMEs, let us give one loan to a big-ticket corporate.' 'And so many of these big fish deceived the banks and the banks are in the doldrums now with high NPAs.'
'By the time the goods that were sent from December onwards reached stores in Europe, they became dead inventory as the stores there were closed by then.' 'Those that were in the warehouse there also became dead inventory. Those that reached the ports there also became dead inventory.' 'And what Tirupur produced in March is still here, and they have also become dead inventory.'
Bharatiya Janata Party's prime ministerial candidate, Narendra Modi, last month urged small traders to compete with foreign retail chains through e-commerce.
India-made garments have the largest pie in US imports in H1
India Inc on Tuesday expressed disappointment over the Reserve Bank increasing the key rate by 0.25 per cent and hoped that banks would refrain from hiking lending rates as such a move will scuttle economic recovery.
While okra was being sold for Rs 100-120 a kg and cauliflower for Rs 120-140 a kg in Mumbai and its suburbs, all other vegetable prices have increased by almost 100 per cent since July 20.
'Fear psychosis has gripped the entire world.' 'Nobody is going to enter shops freely in the next 5, 6 months.' 'Secondly, the priority has changed.' 'Now that they have seen the bottom of the economy, people will prefer to save for tomorrow.'
Three way split of AIADMK has slowed decision-making, prompting industry to look outside the state, says T E Narasimhan.
While the COVID-19 pandemic has completely halted production and new orders, exporters say that payments have also been delayed for the shipments sent before the lockdown. Exporters say some customers are not taking delivery of the shipments because they have shut shop. Ready-made garment players had been hoping for a revival in demand in China but with the virus spreading to Europe, the US and other major markets, there are no orders coming from the major retailers.
The actual expenditure will only be marginally higher and hence, the multiplier effect will be muted.
'The ban on Chinese imports is a suicidal step.' 'This will result not only in economic depression, but in a chaotic situation.'
The move to allow women to work the night shift, by amending the Factories Act, has been opposed in Delhi by the Mahila Congress, the Indian National Congress's women's wing, and the All India Trade Union Congress.
The government hopes that the PLI schemes would provide 200,000-300,000 direct employment over five years, according to sources in the know.
'India has an advantage because we produce more cotton and we have more workforce.'
Reports from Ludhiana, Coimbatore, Moradabad, Tirupur, Indore, Surat, Delhi, Mumbai, Kolkata, Chennai and Hyderabad, suggest the impact of demonetisation is worsening.
The trio, 'twin shocks' of demonetisation and GST, 'twin balance sheet' problem that has been weakening India's banking system and the 'twin deficit' problem will continue to challenge economic management and performance in the year ahead, says Shankar Acharya.
Cottage industries across India have suffered heavily because of the note ban. In the second of a six-part series, Sanjay Jog travels to Bhiwandi to examine how the power loom industry here is coping five weeks on.
Cottage industries across India have suffered heavily because of the note ban. In the second of a six-part series, Sanjay Jog travels to Bhiwandi to examine how the power loom industry here is coping five weeks on.
Post Jayalalithaa's death, the Tamil Nadu government is in confused state.
Brands such as Gap, Primark and C&A which source some of their garments from Tamil Nadu say they do regular audits to ensure their suppliers comply with their codes of conduct.
In the second of a six-part series, Sanjay Jog of Business Standard walks across the streets of Indore to find out how it has been hit by demonetisation.
I-T lens on current account deposits over Rs 12.5 lakh. All the news and more post demonetisation.
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