Ludhiana’s textiles sector is bearing the brunt of GST. The textile sector in the northern state of Punjab comprises a fair share of micro, small and medium enterprises. While big industrial players continue to be unaffected, micro and small enterprises are feeling the pinch as they are not able to survive the competition because of pending tax credits.
The entire value chain system is reeling under the impact of the GST regime. It is feared, exports of garments from Ludhiana’s micro, small and medium enterprises can drop by 30 to 40 per cent. Garment exporters are faced with canceled orders due to delays in production and drop in orders from local or multinational brands. Leading brands have cut down their orders.
Before GST it was demonetization. Due to the cash crunch it became difficult for garment units in Ludhiana to buy raw material, pay bills and make payments to laborers. Apart from the labor crisis, supply of raw material from vendors was hit due to the cash problem.
Ludhiana is a leading producer of woolen and acrylic knitwear although it also uses extensively cotton and other blended fibers to produce a wide range of fabrics, hosiery, knitwear and readymade garments.