Gujarat’s textile industry, encompassing both man-made and cotton fabric production, is currently facing numerous challenges. The recent surge in crude oil prices has struck another blow to this labor-intensive sector, affecting the cost of manufacturing polyester and nylon fabrics directly as they are derived from crude oil. The cost of man-made fabric production has risen by 20% in the past three months due to various factors, including increased packaging expenses, power costs, wage revisions, and crude oil price fluctuations, according to Narain Agarwal, former chairman of the Synthetic Rayon and Textile Export Promotion Council (SRTEPC).
However, the weakened consumer purchasing power has hindered sales, leaving man-made fabric manufacturers with the difficult decision of absorbing these additional costs amid subdued demand. Agarwal also highlighted the detrimental impact of Chinese textile producers flooding the Indian market with cheaper products. Additionally, textile processing units are grappling with rising expenses for dyes and intermediates, further adding to the costs of cotton textile manufacturing.
The denim manufacturing industry, heavily reliant on polyester yarn manufacturers for around 30% of yarn consumption, is particularly struggling. With the increasing prices of polyester yarn due to rising oil prices, manufacturers are compelled to absorb some of these costs due to weak demand, explained Kumar Agarwal, a denim manufacturer based in Ahmedabad.
