A combination of weakening demand, escalating polyester yarn costs, steeper freight rates and prolonged delivery schedules has dealt a severe blow to Panipat’s handloom and textile trade, affecting both international and domestic markets by as much as 50%.
Renowned worldwide as the ‘Textile City’, Panipat generates an estimated annual turnover of Rs 60,000 crore, with export revenues accounting for roughly Rs 20,000 crore of that figure. The city is home to some 450 industrial enterprises actively engaged in overseas trade.
Handloom and textile goods produced in Panipat find their way to markets across every continent. Local exporters dispatch a wide array of handloom and power-loom items, encompassing bath mats, floor rugs, carpets, bed linen, towels, curtains, upholstery fabric, cushions, blankets, mattresses and floor poufs to virtually every nation worldwide.
Significantly, the city’s export performance has suffered a sustained downturn over the past three to four years, with confidence within the trade steadily eroding since the outbreak of the Russia-Ukraine conflict, a situation that persists to this day.
Compounding matters further, the tariff measures introduced under US President Donald Trump dealt a heavy blow to Panipat’s manufacturers, given that America absorbed some 60% of the city’s total export volume.
Despite this, local industrialists and their overseas partners managed to keep operations afloat – until the Iran-Israel conflict inflicted fresh damage on European trading relationships.
Turmoil across the Gulf region has taken a heavy toll, disrupting not only export activity but also severely denting domestic sales.
Vinod Dhamija, Chairman of the Haryana Chamber of Commerce and Industries’ Panipat Chapter, confirmed that the city’s exports had contracted by half, whilst the domestic market had likewise suffered considerable upheaval.
He reiterated that Panipat’s export performance had been deteriorating over the preceding three to four years, with trading conditions continuing to worsen ever since the Russia-Ukraine conflict began.
The principal driver behind the sector’s difficulties, he explained, has been the sharp rise in polyester yarn prices, triggered initially by a shortfall in LPG gas supplies. Whilst supply chains have since been restored, yarn prices have remained stubbornly elevated, pushing up manufacturing costs across the board.
America’s appetite for Panipat’s goods had already been dampened by Trump-era tariffs, Dhamija noted, whilst the Iran-Israel conflict subsequently undermined demand from European buyers too.
As a direct consequence of the conflict, shipping costs have quadrupled compared with previous levels.
“Delivery timescales have similarly ballooned, now running three to four times longer than before. Containers that once reached their destination within 10-12 days are now taking between 40-45 days, causing significant delays in order fulfilment, Dhamija added.
“The blanket-manufacturing segment has also suffered considerable disruption, he said, with both export and domestic sales channels affected by the ongoing conflict,” The Tribune reported.
Ramesh Verma, President of the Handloom Exports Manufacturer Association, described current sentiment within Panipat’s industry as neither particularly encouraging nor especially bleak.
The unrest across the Gulf stemming from the Iran-Israel conflict had damaged not just export trade but domestic sales too, Verma explained, as polyester yarn prices soared to unprecedented levels. Where yarn had previously cost between Rs 100 and Rs 110 per kilogram, prices have since climbed to between Rs 200 and Rs 210 per kilogram amid the disruption.
Domestic sales have fallen by more than 35% this year alone, he added, whilst continuing uncertainty surrounding Trump’s tariff policy has further undermined export prospects.
Image courtesy: Textile Minister Visiting Panipat Factory
