People with knowledge of the situation indicated that Surat’s textile sector is experiencing a financial crisis that has led to a 30–40 per cent decline in production and that many factory owners have cut back on work hours to four to five days per week.
After Tiruppur in Tamil Nadu, Surat is the second-largest textile manufacturing centre in India and produces a variety of fabrics and apparel, including silk, cotton, and synthetic textiles.
It employs up to two million people, many of them are migrants from states like Uttar Pradesh, Bihar, Odisha, Madhya Pradesh, and several south Indian states as well, and has an estimated annual revenue of Rs. 80,000 crore.
However, it has been dealing with a number of issues that have reduced its growth and profitability.
“The situation is worse than in the times of demonetisation. From a production demand of 4.5 crore metres of cloth a few years ago, it has come down to 2.5 crore meters per day presently. The production is down by 1 crore metres per day as there is unsold stock of about 1 crore metres per day,” said Ashok Jirawala, president of the Federation of Gujarat Weavers Association (FOGWA).
People with knowledge of the situation claim that the growth in Chinese imports is one of the key elements causing the problem. For local manufacturers, it has become challenging to compete with the influx of cheaper textiles from China. Although the Chinese textiles are of poorer quality, they are substantially less expensive, which attracts many consumers. According to a textile mill owner in Surat, this has caused a drop in the market for locally made textiles, which has negatively impacted the Surat textile sector.
The rise in production costs is another element that has fueled the crisis. Raw materials like cotton and silk are now more expensive, and labour is now more expensive as well. As a result, the entire cost of production has increased, making it challenging for the manufacturers to maintain their competitiveness.
The government of Gujarat and the Central Government have taken various measures, such as providing financial assistance to the industry and setting up textile parks to attract investment in the sector.
