In the last quarter of the financial year, however, the Tirupur garment sector is caught in a paradox where there is a glimmer of hope for growth, as well as uncertainty posed by myriad challenges.
In the last quarter of the financial year, however, the Tirupur garment sector is caught in a paradox where there is a glimmer of hope for growth, as well as uncertainty posed by myriad challenges.
The multi-billion dollar garment industry in Tirupur has survived another wave of Covid, without lockdowns or large-scale desertion of guest workers. Hope because the overseas market is poised for growth. But what is pulling it down is the cost of raw material and infrastructural issues. Raja Shanmugam, president, Tirupur Exporters Association (TEA), hopes that they would touch Rs 330 billion by the end of this fiscal.
Vaccinations which boosted buyer sentiment in western countries, absence of lockdowns and an anti-China outlook which brought global orders to India were the reasons for the higher growth. Exporters add yet another reason for the spike in garment sales globally — buying of casual wear at the cost of formal wear due to the work-from-home scenario.
Exporters say there are enough inquiries coming in from overseas buyers, which may turn into orders. Nevertheless, manufacturers point out challenges which might derail growth, especially for domestic players and small and medium units. Though the lifting of lockdown in western countries has not hindered sales, yarn price rise and increase in input costs are pulling down the sector.
Classic Polo managing director T R Sivaram says, a buyer who preferred luxury brands have scaled down the purchase to premium brands, those in the premium brand segment have moved down to mid-premium brands and consumers in the latter segment have slided to economy brands.
Domestic players say they are feeling the pinch of Omicron as walk-ins have reduced. Though not related to Covid, the increase in marked retail price has also affected sales. M P Muthurathinam, president of Tirupur Exporters and Manufacturers Association (TEAMA), says though value of exports has increased, volume has not grown proportionately.
Exporters say there was a lacuna on the part of the Union government in handholding the industry. Though there are ample global opportunities, Tirupur is unable to tap them because of the much-needed government assistance.
Muthurathinam points out that China and Bangladesh follow the pattern of the same industrialist owning all verticals such as yarn making, knitting, dyeing and tailoring units. In Tirupur, not many have such umbrella infrastructure. So each player fixes his margin during sale to the next vertical, effectively increasing the final price.
Source: The Times Of India
Image Source: Google Images
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