Apparel exporters in Tiruppur, Noida, to shut down for 10-15 days a month

As orders dry up, exporters in Tiruppur and Noida have decided to shut down for a few days every month but haven't decided to lay off yet

Apparel exporters in Tiruppur and Noida have opted to close their manufacturing operations for 10-15 days every month to save operational costs amid a shortage of overseas orders, a report by The Economic Times (ET) said.
 

However, the apparel exporting units have not yet decided to lay off any employees, executives told ET.

Around 80 per cent of units in Noida have a month's orders in hand, while orders in Tiruppur have decreased 40-50 per cent Year-on-Year (YoY). 
 

According to Tiruppur's exporters, no major orders have been placed by global brands for this year's Christmas season. "We are now waiting for spring-summer orders for next year, which are placed in September," said Raja Shanmugam, owner of Warsaw International, a knitwear company.

The slowdown in key markets such as the US and the European Union (EU) has impacted knitwear exports from the Tiruppur cluster, Asia's largest textile export hub, which accounts for more than half of India's knitwear exports. The Tiruppur cluster has 30,000 units, including ancillary units as well.

"Because the order position is poor, the units will be shut down for 10-15 days every month. This will assist the units in controlling operational expenses even though the profit margins will also be affected. The situation is expected to improve in September, when global orders may start coming in," said Shanmugam, a former head of the Tiruppur Exporters Association.

According to preliminary estimates, knitwear exports from Tiruppur grew 2.5 per cent YoY to Rs 34,350 crore in 2022-23.

The growth rate was not only lower than the historical tendency, except during the Covid-19 pandemic, but also lower than the country's overall knitwear export growth of 3.76 per cent. "It will be lower in 2023-24 than in 2022-23," Shanmugam told ET.

Meanwhile, in the Noida apparel export cluster, nearly 70 per cent of the units have only a month's orders in hand. 

Lalit Thukral, president of the Noida Apparel Export Cluster, said that only the large units have good orders in hand, but the medium and smaller units have very few orders. 

These units are operating at 30-40 per cent capacity, he said.

Despite a lack of orders, the clothing exporting facilities in Tiruppur and Noida have not decided to lay off any employees. "When the order situation improves, it will be difficult for us to find skilled workers. We have already seen a large exodus of migrant workers during Covid-19," said Thukral.