Punjab’s hosiery industry has become the latest victim of demonetization. The cash crunch has led to a massive fall in the demand for woolen apparels, compelling manufacturers to resort to heavy discounts in a bid to clear the built-up inventory. Woolen garment makers are offering lucrative discounts starting from 20 to 50 per cent in December even on fresh products in the wake of lower offtake. They are forced to offer heavy discounts in order to meet their fixed expenses including payment of workers’ wages. Their stocks have built up because of low demand, caused by demonetization. Hopes that the hosiery industry would generate good sales this season have been dashed.

Normally discounts are offered in January or February. Retail sales of woolen items including pullovers and sweaters have been hit hard. With the industry facing a cash crunch, production of summer garments has also suffered. For the last two years the hosiery and blanket industry in Ludhiana faced dull sales owing to warm winters.

Now the industry is reeling under the aftershock of demonetization. After the note ban, there has been no fresh demand from retailers and wholesalers, who in turn say there are fewer customers. So units in Ludhiana feel there is no point in producing when there is no demand. They expect to suffer losses to the tune of crores.