Due to the ongoing war in the Middle East, the textile industry in Surat, is facing one of its worst crises as in just 60 days, the Surat industry has suffered an anticipated loss of around Rs 3,000 crore.
Yarn production is directly dependent on crude oil and the sharp rise in crude oil prices has pushed up yarn rates, increasing production costs for textile units.
At the same time, weak demand in the market has forced the industry to operate at only 50% capacity.
Textile industrialists are now demanding an immediate relief package from the government to save the sector from further losses.
According to Ashok Jirawala, President of Federation of Gujarat Weavers Association (FOGWA), when raw material becomes expensive, the cost of manufacturing fabric increases, but there are no buyers for finished fabric in the market.
“Due to this contradictory situation, industrialists are incurring losses worth crores of rupees every day,” he added.
“According to experts, due to the difference between production cost and selling price, an estimated daily turnover of Rs 50 to 60 crores is being affected,” the Bhaskar reported.
This economic blow is not limited to traders alone, but its impact is also being felt on bank installments and the interest cycle.
The biggest challenge for industrialists is to retain their workers. If work is stopped, skilled labourers might migrate back to their hometowns, and if work continues, the expenses of interest and electricity bills cannot be met.
A sharp decline in exports has been recorded globally, but since India’s domestic market is vast, there is still some demand. However, this demand is not enough to make a profit for the industry; it is only useful for survival.
Industry representatives have clearly told the Gujarat state government that if immediate help is not provided, the situation will worsen in the coming days.
If the war prolongs, it will be a worrying situation for Surat. Experts are warning that if the tension in the Middle East does not subside and crude oil prices do not stabilise, the textile industry could plunge deeper into crisis in the next quarter.
Image courtesy: Ifab Media
