Foreign news on July 25, it is a hot summer for Surat. Surat, which has the largest textile community in India, has not seen any signs of recovery in demand for textiles since Diwali last year. Industry insiders said the situation is so severe that about 5,000 traders with businesses in leased premises are finding it difficult to even renew their lease agreements.
Gautam Dhamsania of the Gujarat Textile Association (SAG) said: “Demand for textiles from European countries and the United States has reduced to about half of the average demand for this time of the year. Ongoing The Russia-Ukraine conflict has affected demand in European countries, while the economic recession is the reason for the decline in demand in the United States.”
Not only that, Dr. Ashwin Thakkar, Chairman and Vice Chairman of the Indian Textile Association Attributing the sluggish performance of the textile industry to “changes in consumption patterns post-COVID-19.” Consumer spending on daily necessities such as healthcare and travel has increased, which has suppressed demand for textiles.
The epidemic has also changed the cost calculation model of the industry. Labor shortage increases overall production costs. Bhavin Parikh, managing director of Ahmedabad-based Global Textile (India) Company, also expressed similar views on changes in consumer consumption patterns. Global Textile is a medium-sized textile mill in Gujarat with an estimated annual sales of Rs 383 crore.
“Inflation in most developed countries has also reduced consumers’ spending power. Income and inflation rates are not synchronized. In addition, cotton prices rose uncontrollably last year. The increase is one of the reasons why the cotton industry is in trouble.”
Furthermore, Parikh insisted that the price increase “is quite rapid and no one can reasonably pass it on. So producers You end up with inventories of high-priced items.” While synthetic fiber manufacturers are also facing problems, cotton textile traders are bearing the brunt. Parikh lamented: “If cotton prices are controlled, the situation may be different.”
Aggravating the crisis in the Indian textile industry is the high cost of Indian textile production, Vietnam , Java, Bangladesh and other countries are posing challenges to India’s textile production costs, because the labor costs in these countries are significantly lower than those in India. Jayantbhai HPatel, vice chairman of the Indian Textile Association, said: “Fabrics from these countries are 10-12 rupees cheaper per meter than Indian fabrics.”
Dhamsania of the Gujarat Textile Association said: “In recent years, fabrics from these countries are cheaper than Indian fabrics.” Indian yarn exports fell by about 30% this week. Yarn spinning mills in Gujarat and North India are currently operating at full capacity. But the situation is expected to worsen in the coming weeks as textile mills in southern India are no longer able to operate at full capacity.”
In view of the looming crisis, Dhamsania suggested that the government should take emergency measures. “The Ministry of Textiles needs to study import and export policies so that Indian companies can have a level playing field. Also we need to develop new cotton seeds as soon as possible.
“We have The output is only 60% of the global average output. If we can produce high-quality seeds, we will increase yields and double cotton production and farmer incomes. These measures will ensure our industry is positioned to compete with global players. ”
