Prior to GST, there were 6.50 lakh power loom machines in Surat. Post-GST, the total number of weaving machines has been reduced to 5.50 lakh. Polyester fabric production has fallen by almost half in the country’s largest manmade fabric hub. The high cost of raw material, including yarn, is posing a major challenge to the manmade fabric sector. Also, the import of cheap fabrics from China, Bangladesh and other Asian countries has cast a dark shadow on the sector. The quantum of investment in manmade fabrics has significantly reduced under the Amended Technology Upgradation Fund (ATUF) scheme due to the drastic cut in subsidy provided. About seven approved projects have come to a standstill. To compete with global competition, shuttle-less looms are a must to maintain quality in weaving. However, restoration of 30 per cent subsidy under the ATUF is the need of the hour to maintain modernisation in the manmade fabric sector.

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. Production costs have also increased by 15 per cent to 25 per cent due to a rise in labor and raw material charges. Surat has some 325 mills.