LS polls: Slowing exports, labour crunch pinch textile hub Tiruppur

When Business Standard reached Tiruppur, the city appeared to be least active compared to last year. A major reason is the decline seen in knitwear exports during the last financial year

The banks of the sacred river Noyyal, in and around Kodumanal, lay parched, yearning for rain. Even the trees in the Erode forest division bore a yellowish hue.

Some 26 km east of Tiruppur, India’s knitwear capital, this arid landscape is a stark contrast to the vibrant past of this region. Beneath Kodumanal lies the remnants of a once-thriving ancient civilization -- a testament to Tamil pride in its two-millennium-old trade links with Rome and the world beyond.

While Tiruppur, which accounts for 55 per cent of India's current textile exports, is a bustling hub of activity, Kodumanal is a poignant reminder of its glorious past. Historians believe that Kodumanal’s trade links with Rome date back to the era of Julius Caesar, with some Roman garments believed to have been exported from here.

In the midst of the remains of what was once a busy industrial-cum-trade hub, long before the Dutch and Vasco da Gama dreamt of discovering the Indian sea route, the words of Jyothi Mani, a local resident in her late 50s, echo political undercurrents that run deep in this historic land. “Our major issue is the availability of water. We can only engage in coconut farming and cattle breeding because of that,” says Mani, seen at an excavation site. She reminisces about the site’s vibrant excavation activities starting from 1985-86, which have been neglected in recent years.

Reiterating Mani’s views, Ningathottam Subramaniam, a 71-year-old farmer who is a staunch believer in Dravidian politics, says: “Tamil Nadu politics is all about the DMK (Dravida Munnetra Kazhagam) and the AIADMK (All India Anna Dravida Munnetra Kazhagam). People’s issues should be addressed. We are not getting enough water in the region.” 

Tiruppur, too, appears to be less active than in past years, a significant reason being the decline in knitwear exports during 2023-24. The city witnessed an overall 18.2 per cent contraction in knitwear exports from April to February in FY24, with only February showing some growth.

With primordial Omkara sound playing in the background, K M Subramanian has been busy working at the office of his company K M Knitwear. “The war in Ukraine, the financial crisis in Europe and the US, and global business not coming back to normalcy after the Covid pandemic were the major reasons for the decline in exports,” says Subramanian, also president of the Tiruppur Exporters’ Association (TEA).

In the Lok Sabha polls, the main battle in Tiruppur, is between the Communist Party of India’s (CPI) sitting MP K Subbarayan, the AIADMK’s P Arunachalam, and the BJP's A P Muruganandam. The constituency will vote on April 19 in the first phase of polling.

“There are two major economic lifelines of Tiruppur -- textile and agriculture. Infrastructure needs to be improved for the betterment of the textile industry, and water availability should be ensured. I will be working for that,” says CPI stalwart Subbarayan. For textiles, he advocates, the Central government should take steps to make cotton prices stable and promises that the INDIA bloc will make efforts towards that upon coming to power.

During the 2019 elections, the CPI won 45.6 per cent votes, while the AIADMK got only 37 per cent. “Dravidian parties are stronger in the region. The BJP through K Annamalai is trying to make inroads. Though it is able to attract the urban population and upper caste people, support of the poor and lower castes is strong with the Dravidian parties," says an industry leader.

According to TEA, the major issue for the textile sector is labour shortage. “We are running at least 30 per cent short of labour with other states offering huge sops and creating clusters like Tiruppur. We want the new government (at the Centre) to speed up the free trade agreement plans with the United Kingdom. The city also needs a metro connectivity with Coimbatore,” says Subramanian.

Tiruppur's textile industry has 600,000 inland employees and 200,000 migrants. Hence, any issue that affects the Tiruppur cluster affects four Lok Sabha constituencies, too -- Tiruppur, Erode, Pollachi, and Nilgiris – with several employees belonging to these areas.

“Cotton prices have gone up, resulting in product prices moving up by 50 per cent. Some brands in Europe have turned bankrupt, which is also affecting orders. Because of the non-availability of skilled labour, we are running at 60-70 per cent capacity. There should be proper hostels and housing facilities for migrant workers," says R Senthil Kumar of Premier Agencies, a Tiruppur-based MSME. The net average salary of employees in the cluster is around Rs 20,000. TEA is demanding better roads and infrastructure, as industries are spending an average of Rs 100 per employee per day for transport, too.

The major brands that source from Tiruppur include European majors, including Primark, Walmart, Marks & Spencer, Hennes & Mauritz AB (H&M), Tommy Hilfiger, and Target.

In 2022-23, Tiruppur contributed to around Rs 34,350 crore or 56 per cent of India’s total knitwear exports of Rs 61,764 crore. In 2023-24, until February, it was seen at Rs 28,091 crore or 55 per cent of India’s Rs 51,072 crore exports.

“The number has come down in volume terms, too. That is a concern,” notes Senthil Kumar. In addition to exports, domestic market sales from Tiruppur come to the tune of Rs 27,000 crore.

At Khaderpet, the largest wholesale market in Tiruppur, K Babu, who runs a wholesale shop, says: “Since GST got introduced, around 800 to 900 amendments were made. However, it is still hurting small traders like us in the region.” Karan Singh from K R Garments, on the other hand, blames the Lok Sabha polls for the decline in his sales. “We expect domestic sales to pick up after the polls,” he says.

Reminiscing the vibrant history of this region, an industry leader says Kodumanal is proof of why before learning “A for Apple”, kids in Tiruppur learn “T for textiles”. With a 55 per cent export share and a history that dates back to Caesar, it is rightly so.