The textile processing industry in Ahmedabad is currently facing numerous challenges, resulting in an extended Diwali vacation for many units. This year, the vacation is expected to last around 12-14 days. Prior to Diwali, most units were operating at reduced capacities of approximately 50%. However, due to low new orders, many factories are expected to resume production by November 26.
Several factors have contributed to the industry’s struggles, including weak demand, high inventories held by traders, and increased imports from China. These factors have significantly impacted domestic production. Last year, processing units were also shut for over 10 days following Diwali due to subdued demand. Naresh Sharma, former vice-president of Ahmedabad Textile Processors’ Association (ATPA), expressed that the industry has been facing a tough period for the past year and a half. Although there was a short surge in demand prior to Diwali, orders have once again dried up for processing units.
One of the major textile processing hubs in India, Narol, houses 138 units that collectively process around 2,800 million meters of fabric each year, generating approximately Rs 10,000 crore in revenue and employing around 1.5 lakh workers. Bharat Chhajer, former chairman of the Powerloom Development and Export Promotion Council (PDEXCIL), highlighted the adverse effects of the shutdown of South Indian power looms. As around 70% of grey fabric from South India is processed in Ahmedabad, the closure of these looms has significantly impacted processing houses in the city. Additionally, the high import of fabric from China has further contributed to lower orders in the domestic market.
