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India: Tirupur units short staffed, exporters worry about order deadlines

Diwali vacations have hit productivity at Tirupur knitwear units. When workers take leave at a stretch, utilities lie idle. Exporters are worried delivery delays will lead to order cancellation, which will have a cascading effect on working capital, leading in turn to severe financial stress. They feel this situation will be an advantage to competing countries. Exporters fear if this happens, buyers will turn to Bangladesh, Vietnam, Ethiopia, Myanmar and once this happens bringing them back will not be very easy.

Tirupur’s exports of readymade garments fell by 12.12 per cent from April to August compared to the corresponding time period last year. GST, reduction in duty drawback, and remission of state levies were responsible for the export trends.

Meanwhile the rupee falling to an all-time low might help exporters’ cause as it will narrow the price difference between Made-in-India textiles and competing nations, including Vietnam, Cambodia and Bangladesh, and help exporters compete with these countries. The development comes at a time when exporters are going to finalise agreements for the next set of orders.

The gap between Tirupur and competing countries would be reduced by around two or three per cent. Currently, the gap ranges between ten per cent and 15 per cent.