Polyester fabric production in Surat has fallen by almost half from last year. One reason is GST, since its imposition growth polyester fabric production decreased 40 per cent a year. Also the higher cost of raw material, including yarn, is posing a major threat to the manmade fabric sector. Import of cheap fabrics from China, Bangladesh and other Asian countries has contributed to the decline in production.

Due to the drastic cuts in subsidies under the Amended Technology Upgradation Fund (ATUF) scheme, investments have decreased. About seven projects have been scrapped due to the reduction in subsidy under the ATUF. The restoration of the 30 per cent subsidy under the ATUF is necessary to encourage and maintain modernisation in the manmade fabric sector.

Surat is the country’s largest manmade fabric hub. It is facing issues. Prior to implementation of GST, there were 6.50 lakh power loom machines in Surat. Now the total number of weaving machines has been reduced to just 5.50 lakhs. Some 20 textile dyeing and processing mills in Surat have shut shop. One reason is falling demand for polyester. Daily production has gone down to three crore meters a day from 4.5 crore meters a day.