Factors such as weak demand, high inventories held by traders, and increased imports from China have significantly impacted domestic production.
The textile processing industry in Ahmedabad is currently undergoing a challenging phase, leading to an extended Diwali vacation for many units, lasting approximately 12-14 days this year. In the week before Diwali, most units operated at reduced capacities of about 50 per cent. Due to low new orders, it is anticipated that many factories will resume production around November 26. Factors such as weak demand, high inventories held by traders, and increased imports from China have significantly impacted domestic production.
Last year, processing units were also closed for over 10 days after Diwali due to subdued demand. The textile industry has been facing a tough period for the past year and a half. Although there was a surge in demand for a month before Diwali, orders have once again dried up for processing units.
Since around 70 per cent of grey fabric from South India is processed in Ahmedabad, the shutdown of these looms has adversely affected processing houses in the city. Additionally, the high import of fabric from China has contributed to lower orders in the domestic market.