Textile industry loses Rs 200 cr in strike

Production at the knitwear hub of Tirupur in Tamil Nadu came to a halt on Friday due to a nationwide strike called by the textile industry in support of its demand for restriction on export of raw materials, including cotton and cotton yarn.

According to industry representatives, the textile units in the country will lose around Rs 200 crore units, while the Tirupur units will lose around Rs 40 crore due to Friday’s strike. They added that the recent price rise had led to 15-20 per cent drop in production and job loss of 25,000 people.

Tirupur Exporters Association (TEA) president A Sakthivel said around 3,000 units, largely small and medium enterprises (SMEs), were participating in the strike, while around 50,000 people had gone on a fast.

Tirupur accounts for over 70 per cent of cotton knitwear exports from the country, worth around $2 billion. The industry was estimated to grow 12 per cent every year, but the recent price rise in raw materials has come as a major obstacle. The industry provides direct and indirect employment to around 600,000 people in this town.

“The estimated loss to the industry due to the one-day strike is around Rs 40 crore, while the loss for the textile industry in India is estimated to be around Rs 200 crore,” said Sakthivel, who is also the president of the Federation of Indian Export Organisations.

The Rs 55,000-crore textile industry in the country, including powerloom, handloom, made-ups and apparel markers, had called for a nationwide strike to draw the government’s attention to increasing yarn prices and to demand a ban on cotton exports.

Yarn prices have gone up by around 79 per cent to Rs 250 per kg from Rs 139 per kg during the same period last year. As a result, fabric prices have also shot up by 38 per cent to 90 per cent, leading to higher prices for apparel products. “We are not able to pass on the increase to the customers due to competition from China, Bangladesh and other countries,” he said.

Sakthivel added that margins had come down by 15-20 per cent. “If we have to compensate for the raw material price increase, we have to raise our product price by 45 per cent, which customers are not willing to pay.”

“Production at Tirupur dropped 15-20 per cent due to the frequent rise in yarn prices in the last six months. Around 25,000 people lost their jobs,” said Sakthivel. Yarn prices rose because of “uncontrolled exports, without considering the domestic consumption needs”, he added.