Dwindling demand, rise in yarn prices add to woes of textile sector in Surat

Surat’s textile sector is going through a tough phase due to dwindling demand and rising prices of yarn. The sector that accounts for 40% of the MMF fabric demand in the country and the city’s over 6.5 lakh powerloom machines manufacture around 3 crore metre of fabrics worth Rs 45 crore per day. The 450 textile processing units in the city manufacture finished fabrics, including saris and dress materials.

Weak domestic demand for man-made fabric (MMF) and with Chinese polyester clothing making inroads into India via Bangladesh and Sri Lanka, the anti dumping duty on majority of fibres, MGNREGA scheme and rising yarn prices as the big yarn spinners are yet to reduce yarn prices even when the crude oil prices are below $55 a barrel have added to the woes of the textile sector in the city.

The return of Nitish Kumar government in Bihar has initiated an exodus of migrant textile workers to their hometowns as they see hope in the MGNREGA scheme and Nitish government there. According to the Industry estimates, over 35,000 textile workers from Bihar are yet to return from their hometowns though assembly elections for which they had gone are long over.

Moreover, the recent strike by textile workers demanding wage hike, the weaving sector remained closed for 25 days. All these factors have led to closure of at least 10,000 powerloom weaving units with an installed capacity of less than 48 powerloom machines in Surat in the last eight months, rendering over 50,000 weavers jobless, said Federation of Gujarat Weavers Association (FOGWA) president Ashok Jirawala.

According to the Industry experts, knitting sector in the city established three years ago at an investment of over Rs 2,000 crore and installed capacity of 500 machines was on the verge of closure due to Chinese knitted fabric, which is available at cheaper rates.

Dinesh Zhaveri, a textile technologist said that India’s export share in the world MMF segment is around 4% compared to 30% of China. Under the government’s new import and export policy, almost all forms of exemptions have been removed, making polyester exports uncompetitive.

Textile entrepreneurs are not able to compete with China because of the fact that the Surat has only 25,000 automated powerloom machines like Rapier, Waterjet and Airjet. The traditional looms are still weaving thin fabric on shuttle looms.

Southern Gujarat Chamber of Commerce & Industry’s textile committee chairman Devkishan Manghani is of the view that the weavers need to focus on manufacturing fabric for T-shirt, trousers and shirt as well apart from only saris and dress material. For that the weaving sector need to go fully for automation and modernization to match the international standard and increase exports for fabrics.