Surat’s weaving industry is facing mounting financial pressure as yarn prices have increased 40%–45% since June, while demand for finished fabrics remains weak. The combination of rising raw material costs, unsold inventory and delayed payments has forced several small weaving units to reduce production and observe weekly holidays to limit losses.
Industry representatives have warned that if the situation continues, factories may begin their Diwali vacation nearly 15 days ahead of schedule, with some units potentially remaining closed for a month or longer.
Mahendra Ramoliya, an industrialist and director at Surat’s Sachin GIDC industrial estate, stated that the increase in yarn prices following the outbreak of conflict in the Middle East had disrupted the textile value chain.
He added that manufacturers were struggling to absorb higher production costs amid insufficient demand for finished fabrics.
While yarn prices have risen sharply, grey fabric and finished textiles have failed to command remunerative prices in domestic markets, including during the festive season. As a result, inventories are accumulating at factories, payment cycles are slowing and working capital is coming under pressure.
Ramoliya further noted that the government should monitor yarn prices and address what industry representatives describe as artificial price increases by spinners.
He also called for domestic weavers to receive yarn at internationally competitive Free On Board (FOB) rates.
According to industry representatives, more competitive raw material prices could help reduce production costs and ease financial pressure on weaving units. They have urged the government to intervene before the situation leads to further production cuts and prolonged factory closures.
A prolonged shutdown could affect fabric supplies, trading activity and the livelihoods of workers and businesses dependent on Surat’s textile manufacturing network. With Diwali approaching, weavers are seeking urgent measures to address rising input costs and weak demand.
