Torn To Shreds

Tirupur’s knitwear industry is yet to bounce back fully.

- Ilangovan Rajasekaran

THE TIRUPUR KNITWEAR APPAREL INDUSTRY in TamilNadu, one of the country’s leading textile clusters, is still smarting under the impact of demonetisation.

The industry records an annual turnover of Rs.35,000 crore and accounts for 90 per cent of the country’s knitted garment exports. Its estimated domestic annual turnover is Rs.12,000 crore, industry sources said.

“All looked rosy until the night demonetisation was announced. This midnight blow was hard,” said a domestic apparel manufacturer. For a year now, the cash dependent industry has been facing a liquidity crunch following demonetisation, which has forced many medium and small units to down their shutters and left a few lakh labourers in the lurch.

After a brief assessment of the various factors that impact the industry, it is not far-fetched to claim that the industry in Tirupur is facing an uncertain future. The industry reportedly employs about three lakh people in about 6,000 units in the manufacturing cluster of big and small units spread across Tirupur, Avinashi and Palladam.

“Demonetisation has triggered a liquidity crunch in this labour-intensive industry. We need not wait for the financial year ending to analyse our performance. The prediction studies point to a disappointing performance by the industry in the days to come,” said an exporter.

Of the estimated three lakh workers, 30 to 40 per cent are migrant labourers from the north and north-eastern parts of the country. As the industry is not able to disburse wages, the usual practice being weekly payments, and routine daily incentives in cash, many have abandoned their jobs and gone back home. “Many units are suffering from a labour shortage since those who have gone to their native places for Deepavali holidays have not returned so far. Usually, they would return within a fortnight after the festival,” said a trade union activist.