Perfect Sourcing - November 2016

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WAR AGAINST BLACK MONEY BY GOVERNMENT RECEIVES
MIXED REVIEWS
Ever since PM Narendra Modi took the decision of demonetization of Rs 500 and Rs
1000 currency notes, the apparel and textile industry is in a confused state. While some of the exporters feel that it is a wise step by the Govt of India, many small and medium companies have expressed that this is going to push industry backwards. Team Perfect Sourcing has tried to collect as many as 1000 response from all over India on the issue and received a mixed response on this move of Govt. The initial problems were paying cash to workers in factories as they do not have bank accounts. With a limit on withdrawal paying cash to workers became a big issue. Furthermore, the problems escalated as the fabric industry which is based out of Surat, Ahmedabad, Karur, Erode, etc used to deal only in cash. The fabric industry in Surat nearly closed down for many days as nobody had the cash to purchase or sell products. The industry started facing problems when the accessory, trim, fabric, yarn and cotton suppliers stopped supplying to the exporters because of cash crunch. While most of the transactions on buyers end in an export house are done by LC’s that will not be affected, however, within India a lot of vendors are dependent on cash only. The impact of the situation will be analyzed in times to come but at the moment there is a lot of chaos in the industry.